Engineer to investor

So, let’s go back in time. Imagine a young Raj, chubby cheeks and lots of hair (use your imagination). There I was in my final year of studying engineering. I have always loved technology, and as a kid, I imagined building electronic toys.

By the time you get to your final year of engineering, you’ve been brainwashed to think in mathematics and you can kinda get things working in the lab. I say “kinda” because it doesn’t always go to plan. But it is much better than the early years when you’re pretty much blowing up microchips every time you build a circuit.

The Engineering 2 building was where my career path was going to shift away from engineering. I just didn’t know it at the time.

That building had classrooms and all sorts of laboratories. The electronics labs were on the lowest level, a place where I spent a lot of time demolishing semiconductors. I had a thing I called the “blast shield”, basically Tupperware that I covered my circuit with the first time I turned it on. If nothing popped, I could safely remove the blast shield.

One day, we “found” an aeronautical engineering workshop, which had a full-size fighter jet parked in it. The jet was unattended, so we gave ourselves permission to climb in.

All I can say is it’s not business class in a fighter jet. Tight-fitting seat with lots of buttons and switches. We found the ejection seat handle, but wisely decided not to pull it. After all, the jet was inside a building. We also found the “parking” brake. We definitely pulled that (until we saw hydraulic fluid spilling out of the landing gear).

Engineering 2 was a nerdy, fun place.

The 20-minute lecture

One day, I was sitting in class in Engineering 2. The subject was Control Systems, and the professor was an expert in his field. He had studied at MIT and had a PhD and an MBA. He went through that lecture a bit quicker than usual, and with 20 minutes to go, he stopped talking about control systems and started talking about managing money.

He told the class that in a few months, we would be working as engineers and earning good salaries. There would be temptations, such as buying fancy cars and expensive homes. He went on to explain how we should manage our money and told us how he managed his money. He spoke about saving first and spending later. He also spoke about balance sheets and income statements. But one idea really stood out for me - delayed gratification. Don’t buy things just because you want them now. Resist a small reward now for a bigger one later. That’s what investing is.

The whole money management lecture lasted 20 minutes, and I was hooked. From that day forward, I embraced those lessons and I still do.

Learning the hard way

I went home that day and told my dad what I had learned. I asked him to fund an investment, and he said yes. In the days that followed, I found a financial adviser who would make that investment in the stock market.

About a year or so later, that investment was slightly down in value. I thought it was a waste and that I should have kept the money in a bank account instead. I didn’t understand how the markets worked. Anyway, I started working as an engineer and I started saving in a bank account.

While this wasn’t the best way to invest, I was off to the races. I had a growing savings buffer, which felt like a fortune at the time (it wasn’t). Over the years, I made a few bad personal investments.

I bought a property. The market was doing well when I purchased it, and initially its value went up. Then the economy took a dip. I hung on for years waiting for it to turn, all the while paying HOA fees. It didn’t turn. Eventually I sold it at a loss. The most painful part was that early on I had turned down an offer that would have made me a profit. Bad investment.

I also invested in not one but three private business opportunities. Two of them tanked, and number 3 is still in question. Bad investments.

The main lesson is that I was trying and I was learning, and that process of getting it wrong and figuring it out got me on the path to learning how investing really works. Even though I made a few bad investments and held too much cash in savings, I was building my financial discipline and habits that would pay off later.

Realising all the mistakes I had made, I passed the professor’s financial management advice on to other people. Most ignored it, but a handful embraced it like I did. Every one of them did extremely well.

Conclusion 

So, let me wrap it up with some practical tips:

1. It is never too late to start investing. In most situations, you can start today.

2. Speak to a financial adviser and get advice, so you can avoid the mistakes I made.

3. Start small and build up. Keep doing that for a few years and suddenly, it won’t be small.

This hasn’t been our usual newsletter where I talk about stocks and extraordinary companies. (How I got there is another story, and actually a good one.) But this story is the one that had the most impact on me. It changed my career path from engineer to investor and helped me build the financial discipline that I benefit from today.

The best part is it is easy and you can do it too (without changing career).

Give it a go.

Disclaimer: These are my personal views about my own portfolio, for educational purposes only. Nothing here is financial advice or a recommendation to buy, sell or hold any security. I may own shares in the companies discussed. Do your own research and consult a qualified financial adviser before making investment decisions.