Rich Engineer, Poor Engineer

This blog is about mindset change and the proving the power of knowledge. Filipinos value education and we learn a lot of things in school. But one of the things we don't usually learn about is financial intelligence. Robert Kiyosaki, in his book "Rich Dad, Poor Dad", said that people are not poor because they have poor parents or because they weren't lucky enough to have good jobs or because the economy is poor. They are poor for the simple reason that they don't know how to become RICH.

They follow a rat race wherein when their income increases, their expenses also increases. This is illustrated below:


For most people, as their income increases, they buy better clothes, eat at costlier restaurants, buy newer cellphones. As their savings increases, they buy more expensive things. They later buy a car or even buy a house. Along the way, their incur liabilities which we loosely define as expenses bought about by expenses. As they buy a car, they usually acquire a loan they have to pay on a monthly basis. Besides the interest payments, there are other expenses that comes with owning a car, primary of this is the cost of fuel. Added to this is the parking fee and the cost of maintaining the car (oil change, tires, battery, etc). This requires them to work harder to earn more. But they never really get rich no matter how high their income becomes because their expenses also increases. Rich people are different. As their income increases, they use it to acquire ASSETS.


Instead of just using their income in their expenses, they use it to buy assets. We also loosely define 'assets' as acquisitions that generate income. For example, Roel earned enough to be able to buy a condo unit. Normally, this is considered an expense. However, instead of using it himself, he rents it out. This rent then augments his monthly income, enabling him to save more and buy another condo unit. Which he also rents out. If he continues this cycle, it will just be a matter of time when his income from his 'assets' will exceed his regular income. He doesn't have to work again. Bacause of his financial intelligence, instead of working to earn money, he makes his money works for him.

This is how realtors become rich.

How do scientists and engineers become rich?



Unlike realtors and businessmen, scientists and engineers doesn't have money or properties to invest. What they do have is knowledge, science and technology. It is what they invest in terms of time, effort and even money. How do they become rich?

They must use the same financial intelligence formula: they must convert part of their expenses into assets. Instead of just using money to generate science and technology, they must use science to generate money. The most commonly know way is to acquire a patent and earn from royalty payments or licensing agreements. Another way is become technopreneurs and commercialize the technology themselves. Another way, that is not so obvious is found in the portion of this blog on 'Tapping Filipino Scientists and Engineers' and the 'Alternative Technology Catch-Up Strategy'. Why don't they use their knowledge in developing other products or services besides what they are researching on? Besides contributing to economic development, it is also a chance for them to earn extra income.