In Part I, we have talked about the benefits, uncertainties, and cost/effort. Let’s put that all together and see what it all means and the steps you can take to help yourself make an informed decision.
To get most out of this post, make sure you read Part I first!
30,000 Ft View
Before we start, you really have to understand your “whys” and figure out what motivates you. Ask yourself these questions:
- What motivated you to be in this industry?
- What gets you excited about your work?
- Do you see yourself hanging out with architects/engineers/contractors in the next 3 to 5 years? What about the next 5 to 10 years or the rest of your life?
- Besides yourself, who else can you think of that will benefit if you pass the exam?
The idea is to figure out if you are really in this industry for the long haul.
You might say that you are taking the exam because:
- Everyone else is doing it.
- I want a raise & bonus.
There's nothing wrong with that either but you should still try to think deeper and figure out what else is there. In the next couple of months, when you are stuck or are't in the mood to study, knowing your “whys” will ultimately help push you forward.
Well, that’s something to think about. Now, let’s dig in and dissect the whole decision making thing logically.
Decision Making Process (10 Steps)
I broke it down to 10 steps that you can follow easily. It may take you between 15 minutes to 30 minutes to complete the entire exercise.
Here is an overview:
- Define your decision.
- Write down your objective.
- List the pros and cons.
- Assign a rating for each pros and cons & add up the scores.
- Estimate the monetary cost and gain.
- Estimate to make sure you have enough time to study.
- If you have a partner/husband/wife/girlfriend/boyfriend, ask about his/her opinions (because this will affect them for the next few months).
- Summarize your findings.
- Pray/meditate and sleep on it for a few days.
- Make your decision.
Now it helps to write everything down so go ahead and grab a couple of sheets of paper or calc pads. By getting your thoughts down on paper, sometimes you may gain new insights that you haven’t thought about.
Step 1: Define Your Decision
You should clearly define what decision you are trying to make. In this case it’s pretty obvious – “whether to take the SE exam in [month & year] or not.”
Step 2: Write Down Your Objective
This will require a little more thinking. What is the real underlying goal that you ultimately want to achieve? Think back on your “whys” that we talked about earlier. Here are some ideas:
- Career advancement
- Self education
- Respect from your peers
It is very useful if you can identify your true objective. One thing you can also try is to picture your life 5 to 10 years from now if you have your SE. What will be different and what will stay the same?
Step 3: List the Pros & Cons
In this step, create a table with four columns and write down all of the pros & cons that you can think of in columns 1 and 3 (see below) – you can start with some of the things I listed in Part I.
Columns 2 and 4 are for Step 4 of the Decision Making Process so leave them empty for now.
Note that some issues could actually be both a pro and a con. For example, getting a pay raise is a pro but not getting one would be a con. In that case, you should write both of them down as separate items.
Here is a sample of a Pros/Cons table:
|I will have more authority among my peers & clients|
|I will become more confident with my work|
|I will appreciate other engineers more which will increase my likeability|
|By studying, I will become more proficient in engineering and will become more knowledgeable|
|I have the potential to become a project manager for school & hospital jobs (in California)|
|My credential will be more attractive to employers|
|If I start my own firm, having a SE title will be important to new clients|
|I get a pay raise||I don’t get a pay raise|
|I get a bonus||I don’t get a bonus|
|People around me will start treating me with more respect because they appreciate the difficultly of obtaining a SE||People around me have no clue what I just accomplished|
|Cost of registration & exam (this is reimbursable by the company I work for)|
|Cost of reference books (I was able to borrow all of them except for the PCI design handbook which I didn’t bring to the exam)|
|Cost of study materials (about $400 including notebooks, highlighter, tabs and whatnot)|
|Cost of calculator (I already have a HP33s)|
|I could’ve spent the 200+ hours doing something else|
Step 4: Assign a Rating for Each Pros and Cons & Add Up the Scores
Now, give each pro and con a rating of 1, 2, 3 or –1, –2, –3 depending on how strongly you feel about it (3 and –3 means you feel very strongly about it).
For example, I feel pretty strong about being more proficient in engineering. Studying is going to help me with that so I am giving that a score of 3.
Another example: The “bonus”, which is both a pro and a con; if I do get one, I will be pretty happy about it (I gave it a score of 1). However, if I don’t get a bonus, I think I will feel somewhat under-appreciated by the company I work for; therefore I gave it a (-2).
Sum up the scores for both columns when you are done.
|I will have more authority among my peers & clients||+1|
|I will become more confident with my work||+1|
|I will appreciate other engineers more which will increase my likeability||+1|
|By studying, I will become more proficient in engineering and will become more knowledgeable||+3|
|I have the potential to become a project manager for school & hospital jobs (in California)||+2|
|My credential will be more attractive to employers||+2|
|If I start my own firm, having a SE title will be important to new clients||+2|
|I get a pay raise||+1||I don’t get a pay raise||-1|
|I get a bonus||+1||I don’t get a bonus||-2|
|People around me will start treating me with more respect because they appreciate the difficultly of obtaining a SE||+1||People around me have no clue what I just accomplished||-1|
|Cost of registration & exam (this is reimbursable by the company I work for)||0|
|Cost of reference books (I was able to borrow all of them except for the PCI design handbook which I didn’t bring to the exam)||0|
|Cost of study materials (about $400 including notebooks, highlighter, tabs and whatnot)||-1|
|Cost of calculator (I already have a HP33s)||0|
|I could’ve spent the 200+ hours doing something else||-3|
Based on this analysis, my total is 15 – 8 = +7 which suggests that I should probably go ahead and take the exam since the benefits outweigh the costs. Let’s move on to the next step and consider more factors.
Step 5: Estimate the monetary cost and gain
If you have some savings then the monetary cost associated with the “cons” listed above is probably not an issue for you. In that case, you can go ahead and skip this step. Otherwise, we’ll do a quick estimate to see if you’ll come out ahead or not (in terms of money).
This is based on a lot of assumptions and estimations so don’t take it too seriously. Also, it only factors in things that directly relates to $$ since it’s very difficult to assign a dollar amount to intangible attributes like “confidence”.
I created a little spreadsheet to do the calculations (who doesn't love spreadsheets!?) It consists of 8 parts which I’ll explain below and you can follow step-by-step.
The numbers in blue means that they are variables which you can play with. Anything in black are either texts or derived numbers which is best not to change them unless you know what you want.
Part A: Base Pay
This is pretty easy. What is your annual salary?
For this example, since I've worked in the industry for 6+ years, I just grabbed the median from Salary.com for an Engineer II in Los Angeles, CA.
Although the description for Engineer III states that it’s an engineer with 4-6 years of experience, the pie chart shows otherwise…
Looks like about 60% of the data (green) is from engineers with 5-10 years of experience, and about 20% of the data (purple and teal) is from engineers with 10 to 15+ years of experience.
Therefore, it's safe to say that the data for Engineer III is skewed towards the old-timers and I am actually more of an Engineer II.
Part B: Pay Raise
In this part, I am assuming that you’ll get a 5% raise if you pass your SE. Conservatively I am using just the amount from one year (realistically if you do get a raise, it’ll be multiple years). Multiplying this number by the “chance of happening”, you’ll get an expected value.
I can hear you asking: “Where did you get the 5% raise and the 30% chance of happening?”
Honestly, I kind of just made them up and there is no real scientific data to support them.
But seriously though, it’s an educated guess based on my 6+ years of experience working in the structural field and seeing how my peers and other SEs get rewarded from the companies they work for.
From what I can see, most people don’t get raises right away but some do (hence the 30%). It also depends a lot on the market/economic conditions (obviously no body is going to give you a raise if the company is not making money…)
I used 5% raise because it’s a number that beats the highest inflation rate in the past decade.
You'll have to adjust these variables accordingly based on your best guesstimate. OK moving on.
Part C: Bonus
The methodology here is pretty much the same as Part B – educated guess based on my own observation and experience.
No “duration” here since I assume it’s unlikely that you’ll get more than one bonus for passing your SE.
Part D: Tax
Assume no deduction/credit or whatever, federal tax is about 18% (using this calculator). California tax is about 6% (quick check). Medicare is 1.45% and social security is 6.2% (source).
Adding it all up, the tax is about 31.7%. I just round it down to 30% because there’s probably some retirement contributions such as 401K that will reduce the taxable income. I won't go into details but you get the idea – this is just a quick estimate so…close enough.
Part E: Opportunity Cost
Once in awhile your day job would require you to work some overtime but you will not be able to do it because you are committed to study! In that case, you lose out a little bit of income potential (assuming your employer pays you hourly overtime beyond your regular 40 hr week salary – skip this part if they don't).
The author of the Structural Engineering Reference Manual suggests that it would take about 300 hours of studying which is what I used in this example. I highlighted this part in the spreadsheet because this number would be drastically different if you are a repeat taker (see note below).
Note: If you are taking the exam a second time or third time (or more), you can treat this in two different ways (assuming you are still going to spend 150 hours studying):
- Consider the previous hours of studying a sunk cost and just forget about them. If so, you’ll just put 150 here.
- Consider the total hours of studying including the times you spent previously. In this case, you’ll enter 150 + [whatever hours you’ve spent studying previously].
In this example, I am saying that I’ll spend about 5% of the 300 hours working overtime – this is just based on my working experience.
The hourly rate is calculated by dividing the annual salary by 2080 (total number of working hours in a year). You can adjust this as needed.
There you have it, a rough estimate of the earning potential that you might miss out based on overtime. Like I've mentioned before, this only includes things that are fairly objective. There will be other opportunity costs that are subjective (such as time not spent with loved ones…etc) but since we've already considered them in other steps, we can omit them here.
Part F: Reimbursable Cost
This is the cost of the exam registration fee and exam fee. A lot of times if you ask for it, your company will reimburse this cost for at least once.
Part G: Other Cost
This part is self-explanatory…basically anything else you can think of that would cost you $$.
Part H: Total
And the verdict is…+$427. Which means you’ll come out ahead financially if you pass.
You probably noticed that a few cells are highlighted in yellow. As I have briefly explained earlier, these cells represent items that might be drastically different if you take the exam more than once. Just for fun, let’s modify some of the numbers assuming taking the exam twice:
- Hours of studying: 300 –> 450 (say you'll study 150 hours the second time)
- Cost of registration & cost of exam fees (chance of getting reimbursed): 100% –> 50% (the employer only pays once)
- Misc traveling cost: $50 –> $100
-$466! In this case, you'll be losing money even if you pass…
Well, either way, please remember that this is only a small part of the decision making process – use it only as a guideline.
Step 6: Estimate to make sure you'll have enough time to study
Generally, if you haven’t missed the registration deadline, you'll probably have enough time to study. For example,
- Spring exam: Registration deadline is usually in early November (11/1) and the exam is in mid April (4/11). This results in 161 days.
- Fall exam: Registration deadline is around May (5/1) and the exam is in late October (10/24). Results in 176 days.
(Check out the exam schedule for more info)
Assuming you are going to take a total of two weeks off from studying for whatever reason (vacations, wedding, sick…etc), you are left with 161-14 = 147 days which is 21 weeks which then equals to 21 Saturdays, 21 Sundays, and 105 weekdays.
So if you are dedicated to study 1 hour a day during the week and 5 hours a day on Saturday & Sunday, you get:
- Weekdays: 1 hr/day x 105 days = 105 hr.
- Saturday: 5 hr/day x 21 days = 105 hr.
- Sunday: 5 hr/day x 21 days = 105 hr.
- Total: 315 hours.
Is that something doable for you?
I am actually writing a post about how to study for the exam – the post will have a detailed schedule that divides up the 300 hours of studying. Stay tuned for that one if you are interested!
Step 7: If you have a husband/wife/girlfriend/boyfriend/partner, ask about his/her opinions (because this will affect them for the next few months)
This step may be a no-brainer for most people but for some, occasionally we take our significant others for granted that we forget to ask him/her for his/her opinions.
Think about it, spending at least one hour a day studying for the next 21-23 weeks (see Step 6) means you won’t have time to hangout with them and you’ll barely have enough time to do the house chores!
Ask your wife (or husband…etc) to see how she feels about her life being slightly different for the next 3-5 months and talk about how different it might be. You may be surprised about how supportive she actually is or how much she’s against the whole thing…you’ll never know if you don’t talk about it with her.
Step 8: Summarize your findings
OK summing it up from all of the exercises:
- Objective: to gain respect in the industry (Step 2)
- Pros & con score = +7 (Step 3 & Step 4)
- Monetary cost & gain = +$427 (Step 5)
- Time to study = 315 hours in 23 weeks which is doable (Step 6)
- Wife is supportive and 100% on-board (Step 7)
All signs indicate that I should take the exam! What about you? Write down your summary on a piece of paper.
Step 9: Meditate/pray and sleep on it for a few days
Once you have done the first 8 steps – take a break and stop thinking about it for a few days! (But don't miss the registration deadline I suppose…)
Clear your mind and do something else. You’ll be surprised about when you usually get new ideas.
Step 10: Make your decision!
After a few days of “not-thinking-about-whether-to-take-the-exam-or-not”, it’s time to make the final decision. Update your notes based on any new findings or new insights and review your summary page one last time.
Then, go ahead – make a decision and just go with it!
Stop second-guessing yourself. There’s really no right or wrong choice here. Either choice you make, you are going to learn something from it and that’s the whole point.
If you decide to take the exam, next thing(s) you have to do:
- Buy the books (see Part I)
- Finish up and pay the registration/application
- Setup a studying schedule
- Start studying!!
Thank you for reading this long post. I hope I've helped you make up your mind about whether to take the exam or not.
What do you think? Was this helpful? Anything else you wanted to know that I didn't cover? Let me know!