Stashing it away - Embedded.com

Stashing it away

You can’t take it with you.

But you’re surely going to need a lot of it before long.

“It” is money, of course. The grease of business, the stuff that puts food in your kids’ mouths, pays for their education and your mortgage.

My parent’s generation, the so-called “Greatest Generation,” grew up through the Depression. They hoarded cash and assets for retirement; even in their 30s the distant golden years always carried much mindshare.

My generation was, and is, a bit more sanguine about retirement. We tend to assume things will work out somehow. Some did salt the dough away even from an early age; others started to panic in their 40s and 50s.

Younger folks seem even less concerned about stashing bucks into investments. Satisfying goodie lust consumes much of the paycheck so there’s little to save. I do think the younger generation has more expenses than ever. Many 20- and 30-something engineers carry significant college debt. The University of Maryland during my heyday cost a mere $400/semester, a sum that one could reasonably earn with a part-time job. I had no loans after school in those easier times.

One of the great surprises of life is the invitation to join AARP (the American Association of Retired People) that arrives via the snail mail a week after your 50th birthday. My wife surreptitiously signed me up, and I hate to admit that I do peruse the magazine now and then. This month an article (“Start Late, Retire Rich”) describes an approach to building up a nest egg in middle-age. Correspondent Harriet is 52 and hasn’t saved a penny, yet if she and her husband put just $10 per day each into a mutual fund, perhaps by cutting out the venti Frappunccino and breakfast pastries, they’d have almost $300k by age 70.

$300k isn’t going to pay for many years of retirement, and a single expensive illness could make poor Harriet and her husband destitute. It’s hard to see how Social Security will ever cover more than a fraction of living expenses.

My advice to young engineers is to stash some money away, every month, without fail. Stuff just $2000 a year, or $167/month in an 8% investment and you’ll be worth over a half million at retirement. If you’re careful with debt, especially credit cards and home equity loans, you’ll eventually pay off the house and have that significant asset as well.

Want to be a millionaire? Put $300/month away and 40 years later you’ll be a mini-Gates.

Compound interest, if exploited early in one’s career, is a magical power. That $300/month would be worth only $144k in 40 years at 0%.

But the trick is to start early. Make a commitment to pay yourself first.

There will always be a swath of bills in the mailbox and dozens of waving hands demanding a cut of your salary. Who is more important to you – the electric company or your future? 500 channels of cable TV or many years of true leisure.

Only you can decide.

What do you think? How’s your retirement savings going?

Jack G. Ganssle is a lecturer and consultant on embedded development issues. He conducts seminars on embedded systems and helps companies with their embedded challenges. Contact him at . His website is .


There is an excellent book titled “The Richest Man in Babylon” which delvesdeeply into exactly this subject. I was fortunate enough to be given thisbook while in College (1979) and the benefits have been HUGE!

I am glad to see you publishing this information and know that at least afew of your readers will take advantage of it.

– Peter House


I just read your article and identified with much of what you said. Itoo just turned fifty and have been bombarded by the AARP reminding meof my aged condition. It seems strange that I could have achieved thismilestone and not noticed that I'm getting “old.” Sure my body has seensome miles. When I fall skiing I notice that the bruises and strainsnow last longer than what I expect. However on the inside I'm still oneof the young lions, actively pursuing my career. Doing what anytechnologist must do; I stay current. I read. I still take risks.

However my technology career is about to take a major change. I'veworked for one of the large Fortune 500 companies for 27 years (HP.) Istarted my career designing and building emulators (ICE) in the earlydawning years of the microprocessor. I've had several “mini” careersduring my tenure as a wage slave and truthfully I've had a lot of fun.The company has offered an early retirement package that is too good topass up. I am about to leave the folds and start a new phase of mylife.

This has been made possible not by cunning play in the markets orentrepreneurial vision. Like many, I lost a paper fortune in theDOT.COM bust. The ability for me to “retire” has been made possible bythe plodding saving and planning that we started when I first gotmarried. Credit must be given to my wife who helped establish a budget.Intellectually I knew that saving regularly was needed for our financialsecurity. However the discipline needed to continually “pay yourself”is a hard row to hoe. You must be prepared to deny the urges ofconsumerism. We've been fortunate in that I've had a “good” job thatpermitted a lifestyle for us to remain mostly debt free. The only debtwe carried was our house and we paid it off many years ago. We plannedfor our children's college education and that too was funded by doggedlysaving a small pittance from the day they were born.

So now what? I have some open-source projects that I'd like to getstarted. Consulting? Wallmart Greeter? I do woodwork as a hobby andit has the possibility to become a revenue generator. Electronics andcomputer science both started as hobbies and became my career. Thefuture holds many opportunities. A book I recently read paints aninteresting picture for the future. The book, _The_World_Is_Flat_, byThomas Friedman discusses a future that is filled with hope and despair.Stiff competition should be nothing new to most engineers, but theprospect of working in a truly global economy has limitlesspossibilities. Now if the world can just manage to hold together untilwe become to interdependent too fight each other, I'll be one happyretiree.

– John Mauzey

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