Fresh College Grad

You suggest foregoing the 401(k) match (100% return on first 4%?) and the stock purchase plan (a 17% return every 3 months) to pay

I'll second this. It took me 7 years to pay off my student loans, in that time my 401k also was being funded. Maybe avoid the IRAs until debt is paid off, but do NOT leave free money on table. OP is not in a dire financial situation, so removing debt should not be only "top" priority.

I just analyzed PFE (Pfizer) for the last five years and found; Over 261 weeks, there was only one instance where the stock dropped more than 15% (-16.7%) and another instance of worse than -10% (-12.6% to be exact). Given the time it can take for ESPP shares to hit the account, selling as soon as it hits is warranted, but the chance of loss is slim. Given the purchase price is discounted off the two end points of the three month period, I looked at that, too, and found an average benefit from that impact of an additional 4.1% on average. 42 13 week periods offered a boost of 10%+ in addition to the 15% discount. This from a stock that's been on a down trend for the 5 year period studied.

So I agree with you about the advice to sell quickly, but the risk is minimal compared to the gains. JOE

I concur. An MBA is a very good idea if you want to advance in a technical field, as does the OP. Technical educations do not leave much room for learning how to run the business. You need that to advance.

I'm not a manager and never want to be. But my own MBA definitely contributed to my being in my present position, after an undergraduate degree in a health field (BSN). I regard my MBA as a business degree for non-business majors. And, no, I didn't go attend one of the top 15. None of those would have contributed more to my own goals than the one I got. Other people have different goals.

So you advise to get an MBA to someone who has bachelors in EE degree?

Get MBA as a masters?

If you're in the early years of your career, IMO you're better off spending time getting technical certifications, if applicable. An MBA in a technical field is more valuable if you have technical credentials to back it up.

I am not familiar with other educational opportunities in your field, so cannot compare the value of an MBA to degree options. But an MBA on top of a technical degree (and EXPERIENCE) definitely will help open doors for advancement. That will contribute to personal financial growth. (Said while looking over shoulder at approaching moderator.)

I write this only from personal experience. I not an expert on the subject by any means.

As we said in our undergrad EE program, "friends don't let friends switch to business."

But, this MSCompE will consur that if you're looking to get into the less technical side and more business and management side of things, an MBA is probably the way to go. But... you'll be paying for your MBA if your employer doesn't, and they ain't cheap. If you do something with it though, or leverage the contacts you make in the program to do something with it, then of course it will pay back.

On the technical side, if you are accepted into an MS/Ph.D. program in engineering on the other hand, any US citizen with an EE undergrad and a willingness to go to grad school full time will end up making a stipend (albeit not a ton), going to school tuition free. And, nothing says you can't change your mind about he Ph.D. after securing your masters.

Whatever you do don't wait to get started. It gets harder and harder to go back the longer you're out. Trust me on this.

-- Todd H.

======================================= MODERATOR'S COMMENT: Posters to this thread should relate comments to financial planning.

I just analyzed PFE (Pfizer) for the last five years and found;

I keep thinking about all those people who were employed by Enron, who had their pensions in the company stock.

Diversification *is* important, although most of us hopefully don't work for the next Enron or Worldcom.

I'm curious... in what ways does it get harder?

Can you be kind enough to be specific?

Thanks!

ways does it get harder?

I looked into grad school and chose against it for this reason. Engineering requires lots of discussion of math theory in undergrad... because that is how the people with Master and PhD's get their degrees and thereofre teach courses. If one is not familiar with the Calculus being shown, you will probably get lost and struggle. I could go from a Physics course to a material course to an advanced Math course as senior and my head would be spinning from all the math concepts being thrown about as if this was second nature to the professors. And that was my 3 classes before lunch. After lunch woould be 2-3 more classes with more calculus.

I took my first calculus class in HS at age of 17. I finished taking my last calculus course as a Junior in 1993. To recall these things 15 years later is not easy if I were to enroll in grad school tommorrow. I passed all the entrance tests, I have been accepted to a top 10 engineering program, but I chose not to go for the reason that I am too far removed from remembering these topics.

If it's an MBA which is requiring only general Math, then I think the issue is grayer... but for technical degrees and technical certifications, the tests are biased towards some of what is taught at university level (as opposed to what is done in industry).

Or maybe I am just not smart enough to remember all those things and keep it straight. The mind is the first thing to go, isn't it?

I'd dare reply that given the rules, "15% discount to the lower of the two prices at the start or end of the three month period" that even an Enron employee would have been way ahead. As the stock rocketed up, the quarterly gains were easily 50%, and even presuming a complete loss by the worst possible timing, i.e. stock hits account, is worth zero next day, the multiple instances of 50% gain on the money have the investor way ahead. (I know, what if you don't go back at all, this is your first time? That employee just lost 10% of a quarter's pay. 2.5% of an annual income lost is little compared to losing your job, or to the potential gains).

JOE

If they sold regularly...

-- Todd H.

I dunno... I can't remember if that's right or not. ;-)

You know all that math that you have handy right now at the tip of your mind? In 5 years, it may be hard to imagine this, but you WILL forget how to, for example, multiply a matrix.

Also, you get used to a certain income level, more entrenched in your work and such that it's all harder to walk away from. Also, there's a possibility you'll meet someone you wanna spend a lot of time with, who may have their own priorities for your time, more responsibilities, you might buy a house that needs to be maintained, all things tat take time away from that advanced degree.

Also, there is a bias among college professors who advise research against the person with too much corporate experience. They fancy them as having become unwilling to work their butt off in publications and research the way students that haven't been exposed to the corporate environment perhaps have. And there is some truth to that, since if you get too much corporate exposure, you may feel the academic research stuff is a bit... well, not terribly practical or realistic.

THat was my experience anyway. So much varies on the advisor and realm of research and your personal interests.

But going back to school becomes harder with each passing year for a variety of reasons. Basically, you get used to not having to do homework deadlines and tests all the time, and you forget some of the foundational math tools that almost never get exercised in the real world (depending on the job).

Best Regards,

-- Todd H.

I think professional certifications are worth more than the advanced degrees.

For example if someone was a licensed engineer/architect (PE or similar), I would guess that they wopuld earn equal to or more than someone with a masters degree in engineering or architecture.

If someone has an accounting degree my assumption is they would make more as a CPA than they would with an MBA.

A lawyer makes very little until they pass the bar. A doctor makes not as much until they pass their residency.

My wife increased her salary $10,000 by passing a test to give herself a human resource license (PHR). She is now taking more tests to allow herself to adminster health care plans and life insurance plans as a consultant. These certifications cost ~$200-500 each, maybe a little more, and the bang for the buck is MUCH higher than if she went for a Masters in HR management, Behavioral Management or an MBA.

The point- Continuing Education is cost effective IF you stay out of the University world to do it. Advanced degrees cost ~10k minimum, certifications and continuing Ed classes would be much cheaper.

I also work in a training organization for a living, so take my advice with a grain of salt. Continuing Education is what pays my salary!

Ahh.... I see now..... point taken

So if a person wants a more advanced degree they better go for it RIGHT out of undergrad school. Do you concur?

Just curios.....as I'm in that position right now

======================================= MODERATOR'S COMMENT: Posters to this thread should relate comments to financial planning.

As someone in a clinical field, I can say that you forget details outside your scope of practice. A nursing licensure exam covers topics of pediatrics, geriatrics, ob/gyn, etc. But if all you practice is adult medicine, the rest of the stuff gets hazy. If I had to take a licensure exam again, I'd be seriously stressed, as would the vast majority of practicing nurses. I'd do quite well in my area of practice. The rest would be a challenge.

It is easier to get a second degree soon after the first degree than it is to take time off.

It may not be cost effective to get the second degree. The important issue (as mentioned in other posts) is risk/reward.

If it takes you 3 years (of full time schooling) to obtain a second degree, how much will this 3 years cost you?

Lost wages tuition expenses

What will it gain you 3 years later? cost of debt? increased salary? improved starting position?

No one is going to hire a new college grad with an BS in anything and an MBA and make them a CEO (for a large corporation). The 3 years experience may be as important to advance career as the MBA. Depends on situation.

Nice job of tying thread into financial planning. Thanks.

-HW "Skip" Weldon Columbia, SC