Financial Freedom
for Engineers

I was a licensed engineer from 2007 to 2019. I figured out early that it wasn’t for me. I didn’t like who I worked for, and the work didn’t feel rewarding. I hear the same story from a lot of the engineers, programmers, doctors, lawyers and accountants in our community. Most of them don’t hate their jobs. They just can’t picture doing it for another 25 years.

How I got out

I bought my first rental in 2009, and that was the point where I realized there was a way to build income outside my paycheck. From 2007 to 2012 I saved $40,000 to $60,000 a year and put almost all of it into turnkey rentals, which was what I knew at the time.

In 2014 I cashed out my Roth IRAs and 401(k)s entirely, and almost everyone told me not to. That was my call for my situation. It cost me taxes and penalties, and I’m not suggesting anyone else do it. Today there are ways to invest retirement money in private deals without cashing out, like a self-directed IRA or a solo 401(k).

In 2016 I started joining higher-level mastermind groups, and that’s where I saw what more affluent investors were doing: private placements, syndications and funds rather than managing rentals themselves. Even then it took me until 2019 to leave the golden handcuffs behind. The investment income built up slowly and then it was enough.

Why engineers have an edge, and where they get stuck

Engineers are good at this. You can read a spreadsheet, test an assumption, and spot a model that doesn’t add up. That’s most of what due diligence is.

The weak spot is analysis paralysis. I’ve met engineers who spent three years researching their first passive investment and never made one. You can’t remove every risk in a private deal. At some point you’re deciding whether you trust the operator and the structure, not trying to model every outcome.

The other common pattern is concentration. A lot of engineers have most of their net worth in a 401(k), company stock or RSUs, and a house. That means their job, their savings and their stock are all tied to the same company and the same market.

Savings rate comes first

Before any investment strategy, the biggest lever for a high earner is how much you keep. A senior engineer making $180,000 who saves $50,000 a year is in a very different spot from one making $250,000 who saves $15,000. Most of the people I know who reached financial independence early had a period of five to ten years where they saved far more than their peers.

The tax side of a W-2 income

High W-2 earners pay a lot of tax and have few ways to lower it. Real estate is one of the few places with real tax advantages, mainly depreciation, but it’s important to understand the limits.

If you’re a passive investor in a syndication, the depreciation shows up as a loss on your K-1. For most W-2 employees those losses are passive, so they can offset passive income from other investments but generally not your salary. Unused losses carry forward and can be used when you sell. There are exceptions. One example is a spouse who qualifies as a real estate professional. Another is a short-term rental you materially take part in yourself. Each one has strict rules. How much any of this helps depends on your situation, so work through it with a CPA who knows real estate.

Your network is your net worth

The biggest change for me wasn’t a specific investment. It was the people. In the office I was around coworkers who thought a 401(k) and a paid-off house was the whole plan. Once I spent time with investors who were a few steps ahead, what I thought was possible changed fast, and they helped me avoid mistakes I would have made on my own.

That’s why we built The Wealth Elevator community. It’s a place for high-income professionals and accredited investors to learn from each other, compare notes on operators and talk through decisions with people who’ve made them.

A lot of engineers are introverts, me included. Our free Networking Guide covers how to network with other investors without feeling salesy.