Importance of job/college major to FIRE

[I'm a red panda]

I just got a promotion at work.

My salary now, 13 years after I graduated, plus a Master's degree, is at the level it was projected to be upon graduation if I stuck with the major I started college with.

Well, that took awhile.


(I started college, on full scholarship, as a Petroleum Engineering major. I despised it, and I had really wanted to be a teacher anyway. I was just trying to make my parents happy.  I have 0 regrets switching to education. Although I'm not a teacher...)

[Dicey]

Oh come on, don't leave us hanging like that!

[I'm a red panda]

Oh come on, don't leave us hanging like that!

You want to know what I'm making now?  Or what my job is?

[LessIsLess]

There are teachers on this forum who have fired early in life.  In fact, there are people who have fired as students (created a company or product while still in school.) 

[I'm a red panda]

There are teachers on this forum who have fired early in life.  In fact, there are people who have fired as students (created a company or product while still in school.)

The teachers I can think of who are most well known on this forum FIREd early as real estate investors.  Not solely as teachers.  More power to them if others did it on an actual teacher salary. That is seriously impressive.

And if you created a company or product, your title would be "entrepreneur" or "business owner", not just student.

I'm FI. I don't really have interest in RE.  It is possible to be FI a lot of ways, but one of the best ways is high income, low spending.  I would have been FI way sooner on a petroleum engineering salary, that's for sure.  My first job out of college made $28k instead of $80K-90K my friends made.  College major/career field is important here.  It isn't a barrier.

[Goldielocks]

I don't think it is the specific college or major per se that impacts FIRE potential  (as you note, you can have success on your own).

It is two things: 
1)  Not going into school debt that the following 3-5 years of employment can not easily repay, and
2)  once working, having income >> expenses. 
3)  Working for at least 15+ years before FIRE  (yes, 7-8 years is possible, but not where most of us are comfortable)

I would guess that nearly anyone that follows these rules of thumb can be well on their way to FIRE.   
 For example, people in Trades manage it all the time, while never earning more than $60k per year consistently. Their key is that they start working by age 20, and pay for education very quickly. 

[I'm a red panda]

I don't think it is the specific college or major per se that impacts FIRE potential  (as you note, you can have success on your own).

It is two things: 
1)  Not going into school debt that the following 3-5 years of employment can not easily repay, and
2)  once working, having income >> expenses. 
3)  Working for at least 15+ years before FIRE  (yes, 7-8 years is possible, but not where most of us are comfortable)

I would guess that nearly anyone that follows these rules of thumb can be well on their way to FIRE.   
 For example, people in Trades manage it all the time, while never earning more than $60k per year consistently. Their key is that they start working by age 20, and pay for education very quickly.

I got FI in 12 years with an education degree (never had any school debt, always had income greater than expenses). It took me 13 years to reach the STARTING salary of the job I would have had with the other major.   The no debt upon graduation was really the kicker.

I'm not arguing that you HAVE to go to college.  I just thought it was interesting that today when my raise took place I FINALLY met the starting salary many of my cohorts from my first semester of engineering school hit.

[tipster350]

It can have an impact. Shortly after graduating I realized that my chosen major and field was completely wrong for me. I floundered around for a number of years at a low wage trying to find another career path and get on a career ladder.

When one is living close to the bone it is a lot harder to reach FI.

There is a lot more fat to skim on a middle class salary.

[Laura33]

Ditto Goldielocks.  I would also add #4:  choosing a field that you are reasonably competent in and can "enjoy"(tolerate) for that @15-yr period.  "I could have made $80K right out of school" isn't a fair comparison if you'd have been so miserable that you crapped out after two years.

Spoken as an English major who graduated college with $7500 debt and all of the qualifications for a $20K/yr generic office job.  Then I added 3 more years in law school and $2K more debt and landed a job that paid almost 3x what I could have made right out of college (and which today would pay multiples of *that* multiple).  But I still tell people to steer clear of my path unless they really want to be a lawyer and have a good idea what they're getting into.

[Goldielocks]

Obviously FIRE for the fine arts major may involve less spending per year than FIRE for the lawyer...  !!!  I forgot to mention in particular that although I think FIRE is possible, the final spending amount may be different depending on your salary during your career....

[Zikoris]

We're a mildly interesting case study in this. He has a fine arts degree and I have zero credentials whatsoever. We do similar jobs (receptionist vs administrative assistant), make similar salaries, and will retire at the same time with similar stashes. It's looking like the total time to FIRE will be 10 years from start to finish (23/25 to 33/35). So his degree doesn't seem to have helped him, but it hasn't hurt him either, and he had fun. His parents paid for it, so it would be very different story if he'd graduated with debt.

[Paul der Krake]

My industry doesn't give two shits whether you have a degree, but almost everyone does.

[clarkfan1979]

I think projected salary for first year out of college for specific majors is very short sighted.

A really good friend graduated from a 4 year art school with a degree in graphic design. First job out of college in 2003 was an hourly job that paid about 30K/year. Two years later they bumped him up to 50K/year, but now on salary, so not that much of an hourly increase. 

For the next 8 years he went from 50K to 80K for an ad agency. He got fired from his 80K job and got a new job making 140K working for another ad agency. He also flips houses on the side and probably averages another 50K/year. He is really good with design and the houses look awesome finished.

Don't go to art school because you will never make any money.

[SwordGuy]

There are teachers on this forum who have fired early in life.  In fact, there are people who have fired as students (created a company or product while still in school.)

The teachers I can think of who are most well known on this forum FIREd early as real estate investors.  Not solely as teachers.  More power to them if others did it on an actual teacher salary. That is seriously impressive.

You realize that the money that they invested in real estate CAME FROM their teacher's salaries? 

Real estate did not just magically appear with their name on the title.

So, yes, they did retire as teachers.

[undercover]

Thread title should be "importance of income"? Obviously degrees are irrelevant to many people making above six figures.

Income/savings rate are the only metrics that matter, but of course more income makes having a higher savings rate easier.

[I'm a red panda]

Thread title should be "importance of income"? Obviously degrees are irrelevant to many people making above six figures.

Income/savings rate are the only metrics that matter, but of course more income makes having a higher savings rate easier.

My point was switching my college major changed my income potential drastically.  So for ME it made a big difference.  At my savings rate, if I started work at nearly $90k (like every single person in my cohort who graduated as a petroleum engineer), I would have had a damn good headstart to FIRE than starting work at $30k.  Of course it was the job that makes a difference, but if you can tell me where a teacher can find a $90k job right out of college, that would be awesome.  $30k was pretty good for a teacher when I graduated.

[I'm a red panda]

There are teachers on this forum who have fired early in life.  In fact, there are people who have fired as students (created a company or product while still in school.)

The teachers I can think of who are most well known on this forum FIREd early as real estate investors.  Not solely as teachers.  More power to them if others did it on an actual teacher salary. That is seriously impressive.

You realize that the money that they invested in real estate CAME FROM their teacher's salaries? 

Real estate did not just magically appear with their name on the title.

So, yes, they did retire as teachers.

But it wasn't passive investing. It was basically a part-time job for them, if I remember the situation correctly.  To me, that isn't "just" being a teacher anymore than going and working at Starbucks would be. They were moonlighting in a different industry.

I'm not going to discount what they did. That was major hustle, combined with some really good timing they were able to take advantage of.  But it wasn't just teachers with a super low spending rate.

[Goldielocks]

Hi,  I took a moment to pull the salary grids locally.  Salaries are definitely related to regional markets, so these are for BC only.  Very few petroleum engineers here (they move to Alberta).

Benefits
Please note that the teachers' grid does not include the pension benefits.  Although teachers need to contribute a hefty mandatory personal contribution, there is a much larger government pension contributions worth a lot after vesting in 2 years.   For Engineers, the company pensions range from zero (for small shops, about 15% of the total population gets nothing), to 6% matching at larger firms..  Engineers Vacation is 10 to 20 days, with 17 days being the average, plus the federal 10 days holidy..

There are a lot of differences between teachers and engineers, of course, from work duties, to workplace culture, etc.  I will leave the "christmas, spring break and summers off" argument for other threads.  Most engineers take training to beef up specific skills that are equivalent to a 2 year teaching post-grad diploma, etc. so the right comparison is between teachers with a masters or extra diploma and the base engineers.  A huge difference used to be the difficulty for teachers to be hired full time at the start of their careers which was a negative money impact to the teachers in their lifetimes.  (but that has changed)

2016
Teachers: (note, teachers that get hired FT are at cat 5 or higher_)

Starting $48-52k (approx)
10 year $84k
Average  $84k   (teachers max out early, just adding extra degrees to get more money after that, most 20 year teachers I know make $90k).

https://bctf.ca/uploadedfiles/SalaryGrids/SD37.pdf
Engineers:

Starting at $60k
10 year salary at $80k ($89k for the indemand discplines or governement utllities)
Average salary (all engineers) at $94k

https://www.egbc.ca/getmedia/4cb4aeec-8894-4dd8-84a8-6366edd7f9e9/APEGBC-Compensation-Survey-2016_WEB_FINAL.pdf.aspx

[Valhalla]

Thread title should be "importance of income"? Obviously degrees are irrelevant to many people making above six figures.

Income/savings rate are the only metrics that matter, but of course more income makes having a higher savings rate easier.

Interesting opinion.  I make over six figures but it was my combined degrees that got me here (BS and masters).  IMO the major of study can be a key pivot point for wealth. 

[I'm a red panda]

I will note, teacher pay has gone up a lot since I graduated school in 2004. Seems it is more likely to start in the $40k range now, but it also seems a lot harder to find a job.
Most of my friends got jobs in the $25k-33k range depending on where they went.

But my Pet E friends all got jobs in the $80-90k range.  My freshman summer internship paid the annual equivalent of $95k for summer work.

I don't know anyone who didn't find a job right out of college, obviously that has changed too.  My Pet E friends all stayed employed through the recession, many of the teacher friends did not.  Small sample though, as "Jes's friends" isn't exactly statistically signifigant.

No idea how pay compared to the non-petroleum engineering friends. I've never seen their payscales. The Society of Petroleum Engineers published data on our local graduates, which is how I know what people made. Teacher pay is public knowledge, so we just talked about it.

[meatface]

I'm going slightly off-topic regarding teachers and FIRE:

A great way to FIRE early as a teacher is to become a teacher (or admin) at international schools (such as the ones that diplomats' kids go to) for a good 10-15 years. You get paid a respectable salary, and oftentimes many of your major expenses are covered. The teacher friends I know in Africa are swimming in cash because basically all their costs are covered, and the costs that aren't covered as super low. For example, full-time, in-home nanny care and housekeeping is like $100/month total. And this is considered a good salary that the workers are happy with.

So in terms of actual numbers, a couple could earn $50k EACH (or more) and save damn near all of it. How many teachers couples in the US do you know saving nearly $100k per year? ;)

[meatface]

Thread title should be "importance of income"? Obviously degrees are irrelevant to many people making above six figures.

Income/savings rate are the only metrics that matter, but of course more income makes having a higher savings rate easier.

Interesting opinion.  I make over six figures but it was my combined degrees that got me here (BS and masters).  IMO the major of study can be a key pivot point for wealth.

I agree. I don't see how major doesn't have a big influence. It depends on the situation, of course, but here is a common example.

Persons A and B both go to some decent private university (Santa Clara university in silicon valley, for example) and come out with the same, large debt. Let's say $200k.
Person A majored in Computer Science, did summer internships to get experience, and exits college with a job paying around $80k with prospects for rapid salary growth.
Person B majored in Sociology, did summer internships to get experience, and exited college with a job paying around $40k with unlikely prospects for rapid salary growth.

Assuming they are both Mustachian, I don't see how Person A doesn't get to FIRE significantly faster.

[I'm a red panda]

I'm going slightly off-topic regarding teachers and FIRE:

A great way to FIRE early as a teacher is to become a teacher (or admin) at international schools (such as the ones that diplomats' kids go to) for a good 10-15 years. You get paid a respectable salary, and oftentimes many of your major expenses are covered. The teacher friends I know in Africa are swimming in cash because basically all their costs are covered, and the costs that aren't covered as super low. For example, full-time, in-home nanny care and housekeeping is like $100/month total. And this is considered a good salary that the workers are happy with.

So in terms of actual numbers, a couple could earn $50k EACH (or more) and save damn near all of it. How many teachers couples in the US do you know saving nearly $100k per year? ;)

Well if we are going to Africa to work, the Americans I know working on oil rigs there are millionaires many times over in a short time.  (Of course the one I know who spent significant time in Nigeria also was held hostage a number of times- but he was paid a fuckton of money when he lived there.)

[undercover]

Thread title should be "importance of income"? Obviously degrees are irrelevant to many people making above six figures.

Income/savings rate are the only metrics that matter, but of course more income makes having a higher savings rate easier.

My point was switching my college major changed my income potential drastically.  So for ME it made a big difference.  At my savings rate, if I started work at nearly $90k (like every single person in my cohort who graduated as a petroleum engineer), I would have had a damn good headstart to FIRE than starting work at $30k.  Of course it was the job that makes a difference, but if you can tell me where a teacher can find a $90k job right out of college, that would be awesome.  $30k was pretty good for a teacher when I graduated.

Sorry, I interpreted your title to read: "going to college and getting a degree for high paying job is the only way to FIRE". I see that's not what you really meant.

Also, the comments about being a teacher and also being a real estate investor tycoon and whatever else on the side is irrelevant. An engineer could also buy real estate on the side just as well as any other person in whatever profession. Buying real estate obviously has nothing to do with being a teacher and vice-versa. I guess the general gist though is that it's never too late to increase your income in other ways.

I guess if FIRE was one's goal at age 18 then they would probably pick the highest paying career path they could find. If you could go back, would you get the engineering degree? In general, why do you think people go for lower-paying degrees when, in general, most smart people can accomplish pretty much the same things career-wise?

Thread title should be "importance of income"? Obviously degrees are irrelevant to many people making above six figures.

Income/savings rate are the only metrics that matter, but of course more income makes having a higher savings rate easier.

Interesting opinion.  I make over six figures but it was my combined degrees that got me here (BS and masters).  IMO the major of study can be a key pivot point for wealth.

I agree. I don't see how major doesn't have a big influence. It depends on the situation, of course, but here is a common example.

Of course it does. I wasn't asserting that all or no one making over six figured possess degrees - I was just simply saying that it's not really about the degree, it's just about savings rate (which of course is somewhat influenced by your income), period. A degree historically has been a pretty set way to almost guarantee a high income, but obviously times have changed.

[I'm a red panda]

If you could go back, would you get the engineering degree? In general, why do you think people go for lower-paying degrees when, in general, most smart people can accomplish pretty much the same things career-wise?

No way. Because I really don't care that much about money.  Of course it is easy to not really care about money when you've always had enough.

[MrsPete]

The teachers I can think of who are most well known on this forum FIREd early as real estate investors.  Not solely as teachers.  More power to them if others did it on an actual teacher salary. That is seriously impressive.

If you're married, teacher is an excellent counterpart to a high-salary job. 

My husband and I are a teacher and an engineer.  It's an excellent combination ... the jobs are rather opposite in terms of compensation, which provides a well-rounded compensation package for the couple.  Also, people attracted to these jobs tend to have specific personality types, and those types tend to be attracted to one another; a surprising number of my teacher friends are married to engineers. 

[Laura33]

Thread title should be "importance of income"? Obviously degrees are irrelevant to many people making above six figures.

Income/savings rate are the only metrics that matter, but of course more income makes having a higher savings rate easier.

Interesting opinion.  I make over six figures but it was my combined degrees that got me here (BS and masters).  IMO the major of study can be a key pivot point for wealth.

I agree. I don't see how major doesn't have a big influence. It depends on the situation, of course, but here is a common example.

Persons A and B both go to some decent private university (Santa Clara university in silicon valley, for example) and come out with the same, large debt. Let's say $200k.
Person A majored in Computer Science, did summer internships to get experience, and exits college with a job paying around $80k with prospects for rapid salary growth.
Person B majored in Sociology, did summer internships to get experience, and exited college with a job paying around $40k with unlikely prospects for rapid salary growth.

Assuming they are both Mustachian, I don't see how Person A doesn't get to FIRE significantly faster.

See this:  https://fivethirtyeight.com/features/students-at-most-colleges-dont-pick-useless-majors/. 

Tl;dr:  most kids who go to lower-ranked schools are majoring in areas that will likely make them immediately employable; most of the people majoring in "useless" majors are at the higher-ranked schools and will likely go to grad school (and the highly-ranked law schools/MBAs/etc. really love the highly-selective liberal arts degrees -- to them, that background is a feature, not a bug).  So your Person B is more likely to major in Sociology, do summer internships to get experience, take a $40K job for 2 years, then go back for an MBA and come out making $150K+.   

The important thing is to have a plan and keep long-term career options in mind.  If you decide to be an English major like me and don't want any kind of post-grad education, you're likely to wind up in that $40K/yr job.  OTOH, an English major at a HSS followed by an MBA or law school can bring in a buttload of money.

[A Definite Beta Guy]

That still leaves 12% of students majoring in psychology and social sciences at less selective colleges. Add on another 10% of students majoring in visual arts or communications and you have 1/5 of students with majors that might induce some head-scratching.

I do agree that the most important thing to worry about is your career pipeline. My career is meh, despite a business major, because I did practically nothing in college and graduated in the midst of the Great Recession.

[Goldielocks]

Thread title should be "importance of income"? Obviously degrees are irrelevant to many people making above six figures.

Income/savings rate are the only metrics that matter, but of course more income makes having a higher savings rate easier.

Interesting opinion.  I make over six figures but it was my combined degrees that got me here (BS and masters).  IMO the major of study can be a key pivot point for wealth.

I agree. I don't see how major doesn't have a big influence. It depends on the situation, of course, but here is a common example.

Persons A and B both go to some decent private university (Santa Clara university in silicon valley, for example) and come out with the same, large debt. Let's say $200k.
Person A majored in Computer Science, did summer internships to get experience, and exits college with a job paying around $80k with prospects for rapid salary growth.
Person B majored in Sociology, did summer internships to get experience, and exited college with a job paying around $40k with unlikely prospects for rapid salary growth.

Assuming they are both Mustachian, I don't see how Person A doesn't get to FIRE significantly faster.

Easy answer -- it is an age-old story... 

Person A with the big salary leases a fancy car within 1-2 year of graduation, goes out to dinner a lot, buys a lot of Tech toys..  when they have kids, one parent stays home while the other works, then when kids are 6 to 8 years old, they buy a second home or cottage..for family times....then a few years later,  they get a Tesla on financing "for $500 plus the net difference in fuel costs"  AKA "$700 per month"....   essentially they spend their money every single year.   

Person B works with government agencies that help those hard on their luck.  Although person B does tend to give more money and charity away (because they are in an environment of need), they also have no internal desire for a flashy car, AND a large home, AND eating out, etc.   When they have kids, it is two parents working and grandma taking care of the kids or another reasonable solution... Within 10 years,  Person B's family end up making the same as Person A's family because of two incomes, and while they have huge child care costs, they also don't overspend on many of the "big three" areas of house, car, and food.  Person B then saves 30% of the family income after the kids are in elementary school and the child care costs drop.

????

In other words, many people adjust their spending to their income level.  If you are around people that spend more, you will spend more than if you are around people that spend less.   

-------------
Obviously someone like OP, who has a strong FIRE plan, what they spend is much less related to what they make, and the income difference is a very big deal.   Not may people fall into this category where expenses are untied to their income level.

[2Birds1Stone]

No college major here, guess we are doomed :/

[retired?]

It is averages vs. individuals, and definitely a low earning bs/ba can go on to graduate school in something more lucrative.

I'd suspect that if you take a mustachian person who is inclined to follow an engineering route, that, on average, they'd reach FIRE before sociology, psych, anthropology.

When you think about it, aside from engineering/science (and to a lesser extent undergrad business degrees), the other majors don't really say much about what the person will actually do.  Also, long-term pay depends just as much on personality as "book smarts".  I know a lot of people who make good $$, but wouldn't have seem that impressive at 22.......of course, high pay alone <> FIRE.

Rather than people like me surmising, take a poll among the people here who are already FIREd.  Engineering, math, science, business/econ, soft science, liberal arts.  While anyone can do it, I'd bet the actual stats reflect 'early career pay'.

[Larsg]

(I started college, on full scholarship, as a Petroleum Engineering major. I despised it, and I had really wanted to be a teacher anyway. I was just trying to make my parents happy.  I have 0 regrets switching to education. Although I'm not a teacher...)
[/quote]

I think it only matters if you are are pursuing something highly technical or something you are passionate about. Other than that, college is more likely social engineering for earnings management - i.e. delaying the entry of entire generations to allow the job market to expand and absorb all the additional people. For example, I majored in English Literature from a state college I paid for myself - although all of the professors were Ivy League Grads - but went on to learn business from Mr Big Corp(s) where it really did not matter what you majored in or what school you went to. In the end, I make in excess of 200K per year and that is with one major downshift. Had I stayed on the wheel, I would be above 300-400K by now but decided I wanted more life in my life and will be retiring soon. In Mr Big Corps, after a while, becomes all the same, where one day drags on after another, where it feels as if no one is really making that much of a difference. I think the big players that really run the world figured this out a long time ago and have orchestrated things for people to do, relative to the country they come from, the overall supply and demand of that region, and the need to keep society under control as much as possible. For our children, we don't care if they go to college or not. We are teaching them young how to invest, how to care about the planet far more than any stuff or external costumes that advertising has brainwashed the masses into thinking they need, and to start their own companies that contribute to the future of humanity in a positive way. We will support college only if they decide they want to learn about technology in order to do the above, or they want to strive to find the cure for something.  Otherwise, there is no reason to join the masses in delayed adolescence so that my kids can experience the life that I did, not knowing any better.

[Larsg]

It also matters what you "go for." Around campuses there are always a lot of myths passed around from student to student that are filled with fear and "can't do's." Like you MUSTS major in Tech or Business or fill in the blank her to make XX amount, or be successful. While it's true that some majors more than others command higher starting salaries, it's important to remember that that same big company has many functions and specialties that can pay almost as equally well but most student don't have a lot of knowledge about this nor do counselors. Interesting companies also like interesting people. It's important that students do their own research, find or create your own internship(s) so that you can sample different environments over the summer months. When I was in college, we were in a recession and there were few internships to be found so I created my own. We did not have the internet yet - yes I'm that old, so I researched local businesses in the library and started calling those I thought iwould be interesting to work for and talked my way into an internship. It was a local business magazine where I got to combine business and editing all in one. This experience greatly shaped what I "went for" upon graduation and the trajectory my life took. I was lucky that I did not get sucked up into the myths like "you must x, y, z, in order to a, b, c. All my college friends who did that are still the miserable accountants they always thought they had to be.

College is a great place to explore. It's expensive, even at a budget school but in the end, what you make of it is up to you - the mix of experiences you seek to find, keeping your mind open, and knowing that it's only a beginning for life long learning. For me, learning on the job and being willing to keep learning new functions, explore different markets, products, and environments has been key.