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March 4, 2010

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Financial Lessons From Engineering

by Fin Engr
share save 120 16 Financial Lessons From Engineering

A1AB1D0F EA65 4A54 90ED D98997531122Img100 Financial Lessons From EngineeringAfter reading an article on a newly-published engineering book, I decided it was finally time to do a post in appreciation of my profession.

The nine-page article focused on Henry Petroski’s newest book

The Essential Engineer: Why Science Alone Will Not Solve Our Global Problems

Dr. Petroski has written over a dozen books on the topic of engineering, and his first,

To Engineer Is Human: The Role of Failure in Successful Design

was also my first introduction to his work.

Earlier today I was reading another book review over at Free From Broke, and was thinking of the similarities drawn between the book’s focus – leadership, and our focus here – personal finance. Much to the same regard, I wanted to highlight excerpts from Dr. Petroski’s article and apply them to personal finance. I’ve gone ahead and highlighted key points in bold.



The electrification of America, for example, has clearly been the success that it is because of a collection of what might be called sub-achievements…The whole is clearly greater than the sum of the parts.

Financial Translation: Each day you make progress towards your financial goals is a small, “sub-achievement”. While those accomplishments by themselves may seem insignificant, the end result will be greater than you can expect.

Not all engineered systems, especially those complicated by challenging ulterior social and economic motives, necessarily evolve for the better. The best of engineering looks at the lifetime of the structureNo engineered structure is designed to be built and then neglected or ignored.

Financial Translation: In route to your financial goals, regular maintenance will be required to make sure you are still on the right track. This is why there are suggestions like re-balance your portfolio once a year, check your credit report annually, or refinance your home.

The word ‘achievements’ suggests completeness, a goal reached, a task finished…But engineering feats and exploits are really never-ending. Even the greatest achievements comprise indistinct milestones passed on the road to the future.

Financial Translation: Like a race where the finish line keeps moving further away, the more you learn about personal finance – the more you learn is out there. Maybe that’s why so many shy away from the challenge?

Engineering, as engineers especially know all too well, is a continuing process. It is a journey with frequent stops, much backtracking, and many re-directions, but never a truly final destination.

Financial Translation: Like learning to drive manual for the first time, it will be jerky. Don’t get discouraged with the previous quote. With time, the difficulties will subside and you’ll be on your way to your goals. Remember you WILL make financial mistakes along the way, but never stop working towards those goals.

Although engineers always seek to make everything better, they cannot make anything perfect. This basic characteristic…is what drives change and makes achievement a process rather than simply a goal.

Financial Translation: Similar to above, your system will never be perfect, and as such, you’ll continue to tweak and improve upon it. That drive will fuel the desire to continue pursuing financial education.

All achievements, engineering and otherwise, are relative to their time and circumstances…these accomplishments have set down ever-evolving standards against which achievements of the next century will be measured…The tools they use may be different, but the goal they strive for is the same: improvement.

Financial Translation: Financial literacy and education are of utmost importance if we want to emerge from our indebted lifestyles. I’m noticing a shift in viewpoints of older generations and my own. We all strive for rich & successful lives. While that goal has not changed, the means by which we define and achieve it are.

20 Comments Post a comment
  1. Mar 4 2010

    Financial literacy and education….I’m all for that. Good post.
    .-= Ken´s last blog ..College Preparation Tips =-.

    Reply
    • Fin Engr
      Mar 4 2010

      @ Ken.

      Thanks – it’s something I feel strongly about. I’ll be stopping by your own site shortly.

      Reply
  2. Mar 5 2010

    I absolutely agree 100%. Financial literacy and education is 100% a MUST! It’s like getting a “D’ in Chemistry. How the heck is one supposed to be a great Scientist with a “D” in Chemistry??
    .-= Financial Samurai´s last blog ..Sometimes Saving Money Is About Principle =-.

    Reply
    • Fin Engr
      Mar 7 2010

      @ FS.

      Got a question for you to think about. Was thinking of our governmental officials.
      First, I never like the idea of it being a full-time gig – I like local govt where they have lives/jobs outside of their political work and it’s more for civic duty then.

      Back to the question. Recently I was thinking how many of those politicians had debts in their younger years. Of course, they could have “come from money”, but does it make sense to put people in charge of billion dollar programs when they can’t manage their own finances? **Maybe that’s part of the problem, the one’s from money always spend with no regard to where its coming from or how much is left.

      Seems like personal fiscal responsibility should be a sought after trait.

      Reply
  3. Mar 5 2010

    I think much of what you can apply to personal finance can be applied to many other aspects in life. When you get down to it, I think life has some pretty basic rules that can be applied to everything but people tend to not see it.

    Reply
    • Fin Engr
      Mar 7 2010

      @ Craig.

      Yes, this is very true. I’ve been thinking about this a fair amount. I’d considered doing posts on things like how traveling can reveal your investment style or how I use endurance training to help condition my mind/attitude.

      So much of life is entwined with itself, that taking basic principles, as you note, can get you through much of it.

      Reply
  4. Mar 5 2010

    Financial Literacy and education… check out http://www.jumpstart.org/

    Someone is trying!
    .-= LeanLifeCoach´s last blog ..Combating the Closing Techniques – The Assumptive Close =-.

    Reply
    • Fin Engr
      Mar 7 2010

      @ LLC.

      Thanks for the link. Definitely they are trying, 15 yr anniversary!! That’s great. Wow… Only THREE states require a separate financial education course.

      Reply
  5. Simple in France
    Mar 8 2010

    Well, I just read a post related to engineering (outside my realm of expertise) and enjoyed it. That’s good writing.

    Reply
    • Fin Engr
      Mar 8 2010

      :) Thanks Simple in France!

      I’ve been noticing the visitors I have from other countries…realizing how universal the topic of money is.

      No matter where we are, everyone wants to be able to provide for themselves & their family… and have a little fun along the way!

      Reply
  6. Mar 10 2010

    Yes, I agree agree agree!
    Too bad we don’t have financial literacy and education taught to us in school…
    though hopefully that will be soon changing!
    .-= youngandthrifty´s last blog ..youngandthrifty Net Worth Update: March 2010 =-.

    Reply
    • Fin Engr
      Mar 10 2010

      @ Young & Thrifty:

      Thanks for stopping in! Always excited to get “out-of-town” visitors :)

      As we’ve read about the US, UK, Dubai, and Greece – financial matters are of INTERNATIONAL concern.

      Alas, I’m not optimistic :/ We’ll probably instate financial education about the same time we switch to the metric system.

      Reply
  7. Mar 13 2010

    Engineering can solve many of today’s problems. It is the will to implement these ideas where the failure lies. An example of a problem we have is oil. There have been problem with the oil supply for years. We have lacked the will to do little about the problem. 40 years after the first oil embargo the first electric car is finally coming out of Detroit. Compressed natural gas vehicles are rare and if you have one try filling it! There are people who think that solar energy is the answer to the problem. Most people would be very surprised to find out the area of a baseball diamond in solar panels will only produce the energy of about 5 gallons of gasoline a day.
    I remember President Eisenhower telling we the people of the USA to become more technologically literate. While we have come a long way ole Ike would be disappointed.
    .-= Daddy Paul´s last blog ..Health Savings accounts fund your future =-.

    Reply
    • Fin Engr
      Mar 13 2010

      @ Daddy Paul. Thanks for commenting, confused as to the tone.

      Starting in reverse order…

      Can’t comment on Ike given my age, but can add that I agree there has been an intellectual pacification of America. Why stress your brain when you can make millions doing something only a trained monkey could do? We aggrandize these professions that add little value to our cultural betterment.

      Frustrating how often solar is touted as the solution when efficiency is horrible right now. Since 2000, its increased from about 20% to 35% (if I remember the numbers correctly). People also don’t realize that it is a source to point technology and storage of the energy is a whole different beast.

      My last point (your first point) is where I am confused as to the tone and where we also disagree. Implementation isn’t as simple as waving our hands. A classic ethics example is the Challenger, were the engineers notified their superiors of the faulty components but were over-ruled by management.

      An easier example is roads. Between asphalt and concrete, concrete beats out asphalt on performance and longevity. But because of the higher initial costs, many local governments opt for asphalt knowing they will have to replace potholes and what not in the near future.

      There are always societal, economical, and political factors that contribute to the ultimate decision.

      Reply
  8. Mar 29 2010

    Good post.

    I’m an engineer that’s interested in finance as well. I think I’ll link to this post in my upcoming Friday link post in the Yakezie section.

    Keep it up!
    .-= Matt @ Dividend Monk´s last blog ..How to Read My Stock Analysis Reports =-.

    Reply
    • Fin Engr
      Mar 29 2010

      @ Matt.

      Whoa! Welcome to the club, what field? Ha – the benefit/curse of “special interest”. I’ll definitely be checking out your site to help support my own :)

      Whatever one’s field, there’s always lessons to be drawn into other aspects of our lives.

      Reply
  9. Mar 30 2010

    I studied electrical engineering. I find that engineering of any type is a good base for financial knowledge because both are intensely analytical, mathematical, and detail-oriented fields.

    Reply
  10. Jun 13 2010

    Engineering certainly has many parallels with the world as a whole…. When all the pieces of the puzzle comes together you complete the puzzle :)…. Just have to hope you don’t lose some pieces!

    Reply
    • Fin Engr
      Jun 14 2010

      @ Forest:

      HA – loosing some, all, or ANY of the pieces can be troublesome. Much of what I talked about with MBA Briefs, there are are endless parallels to personal finance – if you’re just willing to look for them!

      Reply
  11. Fin Engr
    Mar 7 2010

    @ David.

    Thanks. Check out Craig’s comment – sure you would agree.

    It’s funny with projects. Seems like everyday there’s another “fire” to put out, but like you said, as long as you come in under budget and ahead of schedule – that’s all you can really hope to achieve.

    Reply

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