1. www.izmirekonomi.edu.tr Introduction ECON 320 Engineering Economics

2. www.izmirekonomi.edu.tr Are You Rich Yet? Barron’s, September 20, 1999 A Weekly Financial Magazine

3. www.izmirekonomi.edu.tr Beer & Pretzels Rich Investment assets of $2.02 million Don’t count your house(s) About 5% of U.S. individual taxpayers Annual investment income: $101,141

4. www.izmirekonomi.edu.tr Filet Mignon & Champagne Rich A portfolio of $4.55 million 1% of U.S. individual taxpayers An annual investment income of $227,546

5. www.izmirekonomi.edu.tr Yacht & Limousine Rich A portfolio of $19.33 million Annual investment income of $966,621 Who’s Who Y&L Rich: Jack Welch of GE, Mike Armstrong of AT&T

6. www.izmirekonomi.edu.tr Really Really Rich A portfolio of $37.86 million An annual investment income of $1.9 million Only 110,672 U.S. taxpayers reported income above $1 million (1996)

7. www.izmirekonomi.edu.tr Damn Filthy Rich A portfolio of $1 billion 267 individuals in U.S. (1999) Bill Gate: $85 billion Mike Dell: $20 billion Jerry Yang: $3.8 billion Don Trump:$1.6 billion

8. www.izmirekonomi.edu.tr Wealth Revolution Source: Barron’s Online, September 18, 2000

9. www.izmirekonomi.edu.tr Your Goal -Beer & Pretzels Rich at the age of 65 Your current age: 20 years old Amount of savings desired: $2 million Interest earned on your savings: 10% Required monthly savings: $987

10. www.izmirekonomi.edu.tr Monthly Savings Required (to save $2M at age 65) Starting Age Required Monthly Savings at Varying Interest Rates 5%7%10%12%15% 20$987$527$190$93$31 30$1,760$1,110$527$311$136 40$3,358$2,469$1,507$1,064$617 50$7,483$6,310$4,825$4,003$2,998

11. www.izmirekonomi.edu.tr Returns from Various Investment Classes Average Annual Return 1970-1997 Best YearWorst year U.S. Stocks13.0%37.6% (1995) -26.5% (1974) International Stocks 12.7%39.4% (1993) -26.2% (1974) Cash Equivalent 6.8%14.1% (1981) 3.0% (1991) Real Estate8.8%20.5% (1979) -5.6% (1991) U.S. Bonds9.3%33.5% (1982) -5.6% (1994)

12. www.izmirekonomi.edu.tr What’s the Engineering Degree Worth in 2004? Source: CNN Money, September 21, 2004 MajorsAverage Starting Salary Chemical Engineering$52,539 Computer Engineering$51,297 Mechanical Engineering$48,578 Industrial Engineering$46,036 Information Science$42,375 Civil Engineering$42,056 For any engineering graduate, it is not difficult to set aside $100 each month from his or her salary.

13. www.izmirekonomi.edu.tr Conclusion? Start saving Early!