When you hear someone asking, “Why are so many college dropouts successful in their life?” Bill Gates, Steve Jobs, and Mark Zuckerberg probably all come to your mind. The problem is that the question makes an erroneous assumption: there are “many” of them. The not-so-obvious truth for many is that these extremely successful dropouts are just drops in the ocean. No pun intended.
The majority of people who didn’t bother to acquire any marketable skill, let alone a college degree ended up in lower-paying, dead-end jobs. Not to belittle people who actually work their butts off in low-skilled jobs, but that’s the sad reality.
Of course, anything is possible in America. It’s just that being complacent with your education may ruin your chances of getting ahead. In this game we call life, investing in yourself is enormously important to improve your odds of winning.
The traditional advice that your grandma gave you: earn good grades, finish college, get a high-paying job, and save for the rainy day, is still the best strategy for most people in any economy. Heeding the advice could spell the difference between earning a great income or settling for a minimum wage.
Meet Miss P.R.P., a 26-year-old software engineer who did everything your grandma asked you to do, and then some. And as a result, she is reaping all the rewards— a high-paying job, free lunches and dinners, unlimited vacation, and other sought-after perks (besides the standard ones) that make any spoiled tech worker, including yours truly, drool.
Miss P.R.P. completed her degree in Computer Science at Texas A&M University, where she co-authored a wellness Android application, designed for health-conscious individuals. That alone is enough to land a high-paying job, but she didn’t stop there. She went on to complete her master’s degree at Rutgers in 2015 where she also mentored middle school students to write code.
She now works at LinkedIn, the career-focused social media site based in Silicon Valley that Microsoft purchased for $26.6 billion more than a year ago. There she writes Java code on top of Kafka, Samza, and Hadoop— fun sounding technologies that make it possible for you to communicate with your connections at the popular website.
Besides having a passion for working with technology, she is also an avid personal finance enthusiast. She is also an MB50 reader and member of the Facebook group. But what really makes her special to my loyal readers, besides her obvious smarts and awesome technical skills, is her ability to grow her net worth.
The traditional advice that your grandma gave you: earn good grades, finish college, get a high paying job, and save for the rainy day, is still the best strategy for most people in any economy.
Her net worth is around 10 times what I’ve expected a 20-something would have in the bank. With her frugal lifestyle (she buys her used iPhone from Craigslist), in my humble estimation, she’s on track to become a millionaire in eight or nine years!
To put this in perspective, the median amount a 20-something worker has saved for retirement is only $16,000– according to a 2015 Transamerica study.
My 26-year-old coworker who drives a brand-new Camaro and eats out every day, for example, readily admits that he just recently achieved zero net worth after being saddled with student loan debt for many years.
Like me, her parents are first-generation immigrants. They came here from Mumbai, India to seek the American Dream. I love to learn about their stories as well.
Let’s hear what she has to say.
An interview with a future Millionaire Before 50
What brought your parents to the U.S.? Were they software engineers too?
“My dad was a hardware engineer and my mom worked at a bank in India. In the mid-’90s, my dad got a job offer in the bay area and we moved here over 20 years ago. He started working in software then. It must have been really stressful for my parents when the tech bubble burst. My sister was still a toddler and my mom was staying home with her so we depended on my dad’s income. He switched jobs multiple times around 2000 trying to find a stable company who’d sponsor his immigration.”
Why did you choose Computer Science as a major?
“I had the typical Asian parents who wanted me to be a doctor or engineer. I also liked math and I was good at it. When I was picking majors my dad was a software engineer and my mom worked in medical billing and his job also paid a lot more so I majored in computer engineering. I later switched to computer science and added a math major too. My sister’s a computer science major in college now.”
(Note: I have a degree in Computer Engineering myself and taught Computer Science subjects in the ’90s)
Silicon Valley is known to be a very expensive place to live in. It’s actually ranked as the most expensive place to live in America. How do you manage to control your living expenses?
“I live in a really affordable place. Most of my friends got one or two-bed apartments at complexes that increase their rent to the market rate every time they renew their lease. I rent an independently owned three-bed apartment, which I’m sharing with two other roommates. Our apartment manager raises rent by a nominal amount each time we renew so now our rent is below market rate by around $800 per month. I don’t spend much on food either because I get free food at work.”
Free food, get out of here… Is that breakfast or lunch?
“They serve all three meals except dinner on Friday. It’s fairly standard for tech companies around here to offer free food and other benefits like unlimited vacation, long parental leaves, and good 401K matches. Once you have a job with nice benefits, it’s hard to contemplate being without them. My 2017 resolution was to change companies and I was definitely less keen on places that didn’t have as nice benefits as my previous job.”
You have an excellent net worth compared to your peers. How did you grow your net worth?
“I spend a decent amount and don’t keep a budget, but still save a lot of money. I max out a Roth 401K and ESPP (employee stock purchase plan), plus save more in a brokerage account. I’ve learned a ton about personal finance in the past year from following blogs like yours, thank you for making it!”
I noticed that you don’t have student loans like most people your age. Could you tell me how you or your parents managed to do that?
“I was a national merit scholar and got a full scholarship so my parents paid room and board for my bachelor’s. My parents also saved in a 529 plan which paid the first semester of out-of-state tuition for my master’s. And I used the money I earned as a teacher’s assistant, intern, etc. to finance the rest. I later become in-state so I never needed student loans.”
Now let’s see what else we can learn from the interview outside grandma’s advice.
- Don’t just follow your passion, choose a career that you love AND that pays well. I think it’s wise of her to follow the career path of her dad because it pays more.
- Start investing early while you are young. Your savings will have more time to compound. You’ll become financially independent much sooner.
- It pays to be frugal. If you continue to live like a college student, you’ll have more money to invest. Lifestyle over-inflation is the ultimate net worth killer.
- You don’t always need to borrow for college. It pays to have excellent academic credentials. Make sure you apply for scholarships, internships, etc. to help pay for tuition and other expenses.
- You’ll save a ton of money by attending in-state public schools. Parents, if you’re paying for it– you get to choose. Don’t drive your kids out of state!
- Parents should start saving in a tax-advantaged college savings plan like a 529 or Canadian RESP. They should start while time is still on their side.
Thanks for sharing your life with us, Miss P.R.P!