Total Savings/Net Worth Forum

[Anonymous User]

Checking in after 7 years of practice. 2016 grad. Here is where I started, and where I am currently:


2016 at graduation:
$0 savings/investments
$0 retirement
$0 home equity
$245K in student debt
Total net worth: -$245K

End of 2023:
$400K savings/investments
$300K retirement
$300K home equity
$0 student debt
Total net worth: approx. $1mm

One of the biggest realizations for me through all of this is how silly excessive budgeting/penny pinching is once you get your debt down to a reasonable level and build a nest egg up. My net worth can literally swing up or down $10-$20K in a day depending on how the markets are acting. Whether or not I get takeout for lunch five days this week has absolutely no material effect on my finances, but some of my colleagues at a similar level are still brownbagging three days a week “to save money.” Heck, whether or not I spend $15k on a vacation really doesn’t impact my financial projections much either. Get your money growing for you as soon as you can and your mindset will shift from budgeting your expenses to forecasting when you will have financial freedom.

[nealric]

Checking in after 7 years of practice. 2016 grad. Here is where I started, and where I am currently:


2016 at graduation:
$0 savings/investments
$0 retirement
$0 home equity
$245K in student debt
Total net worth: -$245K

End of 2023:
$400K savings/investments
$300K retirement
$300K home equity
$0 student debt
Total net worth: approx. $1mm

One of the biggest realizations for me through all of this is how silly excessive budgeting/penny pinching is once you get your debt down to a reasonable level and build a nest egg up. My net worth can literally swing up or down $10-$20K in a day depending on how the markets are acting. Whether or not I get takeout for lunch five days this week has absolutely no material effect on my finances, but some of my colleagues at a similar level are still brownbagging three days a week “to save money.” Heck, whether or not I spend $15k on a vacation really doesn’t impact my financial projections much either. Get your money growing for you as soon as you can and your mindset will shift from budgeting your expenses to forecasting when you will have financial freedom.

One thing worth keeping in mind is the importance of compounding. Over the course of 30 years, spending $15k less per year and putting them in the market may result in $3MM of difference in your portfolio (assuming a 10% annual return).

That said, I agree that if you are making biglaw level salary, brownbagging it is probably not moving the needle much. The key is that the primary risk for a law student is not spending too much, but not securing good employment as a lawyer. Even if you eat nothing but ramen during law school, you won't build much wealth if you don't sustain high income.

Personally, I just set a savings target and don't stress too much about individual expenses. That said, I've still never spent more than $5k on a vacation. But everyone has their priorities.

[Anonymous User]

Personally, I just set a savings target and don't stress too much about individual expenses. That said, I've still never spent more than $5k on a vacation. But everyone has their priorities.

But isn't that kind of the point? Some juniors spend twice that on clothing every two months; others spend twice that just on airfare for their vacations.

I get the need not to obsess with penny-pinching, but that presumes somewhat restrained spending across the board. If I like a good super lavish vacation every year (or go to Michelin-star restaurants with wine pairings and upcharges every month), I may need to eat ramen the rest of the time to offset those expenses.

[Anonymous User]

2015 grad, all biglaw. I don't "invest" in anything other than the S&P and crypto basically. Here is where I stand:

2015 Graduation:
$0 savings/investments
$0 retirement
$0 home equity
$250K in student debt
Total net worth: -$250K

End of 2023:
$1.2mm savings/investments (only S&P 500 or cash)
$500k Crypto
$250K 401K
$300K home equity
$0 student debt
Total net worth: approx. $2.25mm

The crypto amount does make everything else a bit hard to get excited about. I have made a couple hundred grand in the last couple months. I also put in most of my basis right before the prior peak, so I was down over 80% for a while (probably up 150% at this point). I don't really "count" on that money.

[Anonymous User]

2016 at graduation:
$0 savings/investments
$40k retirement
$0 home equity
$45K in student debt
Total net worth: -$5K

End of 2023:
$775K savings/investments
$25k Crypto
$295K retirement
$400K home equity
$0 student debt
Total net worth: approx. $1.495mm

I worked for several years before law school so had some retirement money and also had a good scholarship at law school. Otherwise most of the savings and investments have kicked in over the last several years. Agree with other 2016 grad, not much of a penny pincher anymore cause the markets change so much and still doing well. Also, was doing FIRE light as I was considering retiring early, but then had a kid so will keep working for at least another 16-17 years anyways.