Sep 282014
 

14-09-Roger-dubuis-excalibur-quatuorWhen most people think about a luxury watch maybe a very snazzy $50,000 Rolex or Omega comes to mind. There are also watches covered in gold and diamond that sell for $200,000 or more. But for an even higher level of refined taste in wearable fashion there are names such as Richard Mille, Greubel Forsey, and Roger Dubuis. These brands have watches that can cost over a million dollars U.S. each.

Watch making isn’t just about sitting around all day making faces :D It’s also serious business ;)

The watch maker Roger Dubuis is located in Geneva, Switzerland (of quartz it is :D ) And it’s behind the Excalibur Quatuor, (right) which costs $1,100,000 8-O

14-09-Roger-dubuis-excalibur-quatuor-break-downThis luxury watch represents the pinnacle of modern science and innovation. The Roger Dubuis Excalibur Quatuor is the product of more than 5 years of research, development, and testing.

Expensive watches made by other watchmakers usually have only one sprung balance, but the Excalibur Quatuor has four that all work in tandem for unprecedented calibration accuracy :)

The Excalibur Quatuor watch is made from nearly 600 distinct parts (left), including 5 differentials, and it has a 40-hour power reserve function that is patented by the Roger Dubuis. All of this analogue technology is housed in a silicon body that is four times stronger than steel, yet weighs much less.

The entire process of putting the watch together from start to finish takes about 2,400 hours. Since each watch sells for $1.1 million, this means the company is getting paid $458 per hour of work, not too shabby :)

Moral of the story: Watch makers make a very decent living :) And they get to make their own hours :D

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Random Useless Fact:

From the edge of space Vancouver and Seattle doesn’t look very far apart. And Bellingham looks like it’s just an extension of Vancouver (click image to enlarge)

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Sep 222014
 

Have you ever wondered which university degrees provide the best opportunities for financial success? Well a study by the wealth consultancy WealthInsight may have the answer. A ranking was produced by gathering together the academic histories of millionaires around the world. The top field of study is Engineering.

  • 1. Engineering
  • 2. MBA
  • 3. Economics
  • 4. Law
  • 5. (Bachelor’s) Business Administration (BBA)
  • 6. Commerce
  • 7. Accounting
  • 8. Computer Science
  • 9. Finance
  • 10. Politics

Note: This list contains both graduate and undergraduate degrees.

I happen to work with some engineers and I can say most of them are in fact doing quite well financially. Petroleum engineers can easily make six-figures a year straight out of university if they’re willing to work in the oil fields. Software, materials, and industrial engineers, all make above average incomes too.

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The personal finance blogging community also shows categorical evidence that engineers are indeed a financially savvy bunch ;) Tim from Canadian Dream is in his 30s and reveals he makes six-figures a year working as an engineer for a crown corporation. 34 year old Frugal Trader from Million Dollar Journey recently reached a household net worth of a million dollars. Both him and his wife are full time engineers. And Phil, one of the most knowledgeable commentators who read my blog, met his wife in their engineering class at university. He retired in his 40s after reaching millionaire status and is now doing lots of volunteering work.

Of course at the end of the day it takes more than just a degree to become a millionaire. Having certain soft skills and personality traits are important as well. This means we should be efficient, personable, seize opportunities when they arise, and know when to take risks (both professionally and financially.) The point of a degree, above anything else, is about showing an ability and willingness to learn.

Here are what random denizens of the internet had to say about the wealth study.

“Most millionaires I know drive around in old Ford trucks and have jeans with holes in them; not sitting in a park wearing a tux with a top hat.”

“The only real way to become truly wealthy is to engage in something with substantial risk, though often you can substitute some of that risk by exploiting people. And even so, your chances are pretty good that you will lose your pants instead.”

“One of my best friends growing up got kicked out of high school during his junior year. He worked as a plumber’s helper and now owns three plumbing companies and retired eight years ago at age 45.”

Although there are many ways to become a millionaire and retire early, earning a degree in engineering, MBA, or economics seems to be a popular way to do it! However I have tried to go down that path and failed miserably, so it’s not the right strategy for everyone.

 

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Random Useless Fact:

Dilemma is a difficult choice between just 2 options. Trilemma, quadrilemma, and so forth exist for more options.

May 212014
 

Talking heads often say that young adults are struggling more than older generations in this economy. But a recent BMO report suggests that millennials are doing just fine compared to what their parents went through at their age. The study compares the financial situations of young adults today (age 25 – 34) to that of young adults from 3 decades ago.

Millennials looking for jobs today have a 93% chance of finding one (not bad,) compared to only 90% for those in the mid-1980s due to a higher unemployment rate back then. So don’t feel discouraged if you can’t find a job right away :) Just remember that your parents probably had it worse.

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The median income of people between 25 to 34 rose from $33,900 in 1984-1988, to $34,700 in 2011, after adjusting for inflation. This means we can buy 2% more goods and services than our parents could in 1984 haha :) #feelingrich. Median net worth of households of generation Y was $52,000 in 2012, almost double that in 1984 ($28,752 in 2012 constant dollars.) Wow.

I understand where the older generation comes from when they say “Kids these days. They don’t know how good they have it.” The recession they experienced in the 80s must have been pretty bad :( But then again, maybe it’s not a fair comparison because the world was such a different place back then :?

While many baby boomers prospered financially in the past thirty years, one could say that their children are starting new careers and families on an equal, if not firmer, footing in most regions.”
~Sal Guatieri, BMO economist.

As a millennial I realize that on average we do have more debts today than our parents did 30 years ago. And the costs of education and real estate have outpaced inflation so certain things are definitely less affordable to us. But we have better job opportunities than our parents did. We are better educated. We have higher incomes and more purchasing power. We have almost twice as much wealth (net worth) than they had. We even have access to new innovations like the internet and smart phones, which make our lives so much easier. So I’m just glad things aren’t worse for us right now :D

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Random Useless Fact: Sometimes evolution can backfire.

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May 122014
 

I read an article recently which suggests that single women make more money than single men in the U.S.

According to a study by Reach Advisors, in most major American cities the median income for single, childless women between 22 and 30 is 8% higher than that of their male counterparts :)

Research has shown that young women tend to be more educated than men, and are more likely to get degrees in the knowledge-based fields. Last year women earned the majority of Bachelor’s and Master’s degrees, and the same results are expected for this year. Young women also appear to be more career driven. About 67% of females between 18 and 34 rank their professionals goals as top priority, compared with only 59% for young men.

Looks like all the efforts by society to encourage gender equality, elevate female status and their economic independence is really paying off :) It’s no surprise that more and more women are becoming the primary breadwinner for their households. It looks like young men like myself should be careful lest we get left behind in the job market, lol.

But earlier this year the U.S. president came out with the following statement.

Today, women make up about half our workforce. But they still make 77 cents for every dollar a man earns. That is wrong, and in 2014, it’s an embarrassment.
~Barack Obama

Hm, this seems to contradict the other study. Nevertheless, assuming this was true, why aren’t there more female employees working on Wall St and other knowledge-based industries?

14-05-womenpagap wage gap

Continue reading »

Jan 152014
 

The Canada Pension Plan is a retirement plan that all working Canadians must pay into. It’s similar to Social Security in the U.S.

Right now roughly 5% of my gross salary up to ~$50K goes to pay for my CPP premium, and my employer matches this amount. If I work all the way to 65 years old and retire then I would receive about $12,000 a year of CPP benefits in today’s dollars because the payout is indexed to inflation. CPP benefits are not income tested, so how much income I make in retirement from other sources does not affect my CPP payments :) This is different than Old Age Security (OAS)

With an aging population in Canada, many are concerned about poverty in the senior community. A few provinces are starting to talk about expanding the CPP. They want current workers to pay more into the CPP system so when they retire they will receive more benefits. I think a lot of Canadians can benefit by increasing their pension plan. But I’m not sure expanding the CPP is the right way to do it.

For example, if I want to retire at age 45 then I have to wait another 15 years before I can apply for CPP benefits. The earliest someone can receive CPP payments is at age 60 so it’s not up to the individual when they want to retire. The other issue is since employers have to match their worker’s contributions, higher CPP premiums will mean a higher payroll tax for businesses.

Perhaps the best solution is a voluntary government pension system on top of the current system without increasing CPP. I suppose we shall see what happens in time.