Financial Lessons From Engineering
The nine-page article focused on Henry Petroski’s newest book
Dr. Petroski has written over a dozen books on the topic of engineering, and his first,
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 structure…No 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.