Why do people keep saying "160K"?

Discuss various money matters here. Loans (federal and private), scholarships, lottery winnings, or other school finance related information and queries.
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McNabb
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Why do people keep saying "160K"?

Postby McNabb » Thu Feb 04, 2010 6:03 pm

Hey I'm a long time lurker, and now that I've been accepted into several top 10 schools I've got to ask something that has been bothering me about the posts on here. Why does everyone keep saying "160K" when they factor in the salary that they will have to pay off loans etc. with? Once taxes are taken out 95-100K is what we are really looking at if we are headed to big law. This is especially true for the most popular markets on here (NYC , DC, Cali etc.). I haven't entirely decided where I want to work (though NYC is most definitely out). However, the tax rate thing is starting to be an issue since I will probably have a reasonable amount of debt. Honestly, the huge cost of these schools isn't really mitigated by a 90-100K salary, unless maybe you are thinking of somewhere with a low col. Am I missing something with this casual talk of 160K and ease of paying off loans that often leads to everyone saying "take the higher ranked school"--even in the top 14?

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Mr. Matlock
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Re: Why do people keep saying "160K"?

Postby Mr. Matlock » Thu Feb 04, 2010 6:08 pm

McNabb wrote:Hey I'm a long time lurker, and now that I've been accepted into several top 10 schools I've got to ask something that has been bothering me about the posts on here. Why does everyone keep saying "160K" when they factor in the salary that they will have to pay off loans etc. with? Once taxes are taken out 95-100K is what we are really looking at if we are headed to big law. This is especially true for the most popular markets on here (NYC , DC, Cali etc.). I haven't entirely decided where I want to work (though NYC is most definitely out). However, the tax rate thing is starting to be an issue since I will probably have a reasonable amount of debt. Honestly, the huge cost of these schools isn't really mitigated by a 90-100K salary, unless maybe you are thinking of somewhere with a low col. Am I missing something with this casual talk of 160K and ease of paying off loans that often leads to everyone saying "take the higher ranked school"--even in the top 14?

If you can't figure out how to pay off your debt with $90,000 (STARTING) take home, you have bigger issues to worry about besides law school.

DukeHopeful
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Re: Why do people keep saying "160K"?

Postby DukeHopeful » Thu Feb 04, 2010 6:12 pm

And isn't educational loan interest sometimes tax deductible? I'm really less than 50% sure on this, so somebody else might be able to elaborate more on it? If that's the case though, I would think that the first year you start, which is the only year you make $160K if you're in lockstep salary (barring ITE situations), you'd save quite a bit of the $25K you pay as tax-deductible interest.

But really, if you can't afford $25K a year in loan payments on $100K take home pay, your financial management needs work.

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Dick Whitman
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Re: Why do people keep saying "160K"?

Postby Dick Whitman » Thu Feb 04, 2010 6:14 pm

DukeHopeful wrote:And isn't educational loan interest sometimes tax deductible? I'm really less than 50% sure on this, so somebody else might be able to elaborate more on it? If that's the case though, I would think that the first year you start, which is the only year you make $160K if you're in lockstep salary (barring ITE situations), you'd save quite a bit of the $25K you pay as tax-deductible interest.

But really, if you can't afford $25K a year in loan payments on $100K take home pay, your financial management needs work.


Not if you're making $160k.

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McNabb
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Re: Why do people keep saying "160K"?

Postby McNabb » Thu Feb 04, 2010 6:20 pm

Mr. Matlock wrote:
McNabb wrote:Hey I'm a long time lurker, and now that I've been accepted into several top 10 schools I've got to ask something that has been bothering me about the posts on here. Why does everyone keep saying "160K" when they factor in the salary that they will have to pay off loans etc. with? Once taxes are taken out 95-100K is what we are really looking at if we are headed to big law. This is especially true for the most popular markets on here (NYC , DC, Cali etc.). I haven't entirely decided where I want to work (though NYC is most definitely out). However, the tax rate thing is starting to be an issue since I will probably have a reasonable amount of debt. Honestly, the huge cost of these schools isn't really mitigated by a 90-100K salary, unless maybe you are thinking of somewhere with a low col. Am I missing something with this casual talk of 160K and ease of paying off loans that often leads to everyone saying "take the higher ranked school"--even in the top 14?

If you can't figure out how to pay off your debt with $90,000 (STARTING) take home, you have bigger issues to worry about besides law school.


Are you serous---with 180K plus in loan debt that is accruing interest while paying rent, a car note, bills, food etc. ? I guess the idea of debt just doesn't bother most people on here.

Renzo
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Re: Why do people keep saying "160K"?

Postby Renzo » Thu Feb 04, 2010 6:27 pm

McNabb wrote:
Mr. Matlock wrote:
McNabb wrote:Hey I'm a long time lurker, and now that I've been accepted into several top 10 schools I've got to ask something that has been bothering me about the posts on here. Why does everyone keep saying "160K" when they factor in the salary that they will have to pay off loans etc. with? Once taxes are taken out 95-100K is what we are really looking at if we are headed to big law. This is especially true for the most popular markets on here (NYC , DC, Cali etc.). I haven't entirely decided where I want to work (though NYC is most definitely out). However, the tax rate thing is starting to be an issue since I will probably have a reasonable amount of debt. Honestly, the huge cost of these schools isn't really mitigated by a 90-100K salary, unless maybe you are thinking of somewhere with a low col. Am I missing something with this casual talk of 160K and ease of paying off loans that often leads to everyone saying "take the higher ranked school"--even in the top 14?

If you can't figure out how to pay off your debt with $90,000 (STARTING) take home, you have bigger issues to worry about besides law school.


Are you serous---with 180K plus in loan debt that is accruing interest while paying rent, a car note, bills, food etc. ? I guess the idea of debt just doesn't bother most people on here.

Are you kidding me? What kind of insanely privileged life have you lead? In my former career I brought home about 40k after taxes. If you adjust that to NYC cost of living dollars from my hometown it would be about 75k/yr. I has a condo I loved in a neighborhood I liked, a car (two, actually, but one was a rustbucket), a big tv, and I took vacations. I am currently living in NYC on much, much less than 90k after taxes, so if you offered to triple my student budget then take 20% back in loan payments, it wouldn't worry me.

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beesknees
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Re: Why do people keep saying "160K"?

Postby beesknees » Thu Feb 04, 2010 6:28 pm

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Last edited by beesknees on Sun Dec 05, 2010 12:58 am, edited 1 time in total.

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McNabb
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Re: Why do people keep saying "160K"?

Postby McNabb » Thu Feb 04, 2010 6:30 pm

Are you serous---with 180K plus in loan debt that is accruing interest while paying rent, a car note, bills, food etc. ? I guess the idea of debt just doesn't bother most people on here.[/quote]
Are you kidding me? What kind of insanely privileged life have you lead? In my former career I brought home about 40k after taxes. If you adjust that to NYC cost of living dollars from my hometown it would be about 75k/yr. I has a condo I loved in a neighborhood I liked, a car (two, actually, but one was a rustbucket), a big tv, and I took vacations. I am currently living in NYC on much, much less than 90k after taxes, so if you offered to triple my student budget then take 20% back in loan payments, it wouldn't worry me.[/quote]

Actually I'm from a low income single parent background---west side of Philly. But the idea of that kind of debt just seems tough to swallow. I've worked a 30K a year job for a while and been fine, but that's without 100K plus debt.

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beesknees
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Re: Why do people keep saying "160K"?

Postby beesknees » Thu Feb 04, 2010 6:35 pm

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Last edited by beesknees on Sun Dec 05, 2010 12:58 am, edited 1 time in total.

Renzo
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Re: Why do people keep saying "160K"?

Postby Renzo » Thu Feb 04, 2010 6:51 pm

McNabb wrote:Are you serous---with 180K plus in loan debt that is accruing interest while paying rent, a car note, bills, food etc. ? I guess the idea of debt just doesn't bother most people on here.

Are you kidding me? What kind of insanely privileged life have you lead? In my former career I brought home about 40k after taxes. If you adjust that to NYC cost of living dollars from my hometown it would be about 75k/yr. I has a condo I loved in a neighborhood I liked, a car (two, actually, but one was a rustbucket), a big tv, and I took vacations. I am currently living in NYC on much, much less than 90k after taxes, so if you offered to triple my student budget then take 20% back in loan payments, it wouldn't worry me.[/quote]

Actually I'm from a low income single parent background---west side of Philly. But the idea of that kind of debt just seems tough to swallow. I've worked a 30K a year job for a while and been fine, but that's without 100K plus debt.[/quote]
Ok, if you're scared the debt is too high as opposed to the salary being too low, that's completely understandable. It scares me a little, but I have confidence in my ability to really bust my ass and make sure I get a job that will allow me to pay it back (with the assistance of a very prestigious JD). I think you're right to worry about it, and decide if it's really for you, but I wouldn't let it automatically scare you out of a T10 school. Your odds are really good from one of those schools, and provided you get a job the debt will be manageable.

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englawyer
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Re: Why do people keep saying "160K"?

Postby englawyer » Thu Feb 04, 2010 7:08 pm

McNabb...just go for it.

debt-aversion is actually one of the primary class dividers. rich people take on debt and look long term, but poor people are always worried about how to make rent next month. you want to be rich right?? You have been admitted to several top schools I believe, so you have a very good chance at one of the big jobs.


think of this as a typical budget:

100k take-home

4k/mo budget (comfortable living for pretty much any city): 48k/yr

thats 52k/yr for loans. you can pay off 180k within 3-4 years if you really wanted to.

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im_blue
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Re: Why do people keep saying "160K"?

Postby im_blue » Thu Feb 04, 2010 7:29 pm

McNabb wrote:
Mr. Matlock wrote:
McNabb wrote:Hey I'm a long time lurker, and now that I've been accepted into several top 10 schools I've got to ask something that has been bothering me about the posts on here. Why does everyone keep saying "160K" when they factor in the salary that they will have to pay off loans etc. with? Once taxes are taken out 95-100K is what we are really looking at if we are headed to big law. This is especially true for the most popular markets on here (NYC , DC, Cali etc.). I haven't entirely decided where I want to work (though NYC is most definitely out). However, the tax rate thing is starting to be an issue since I will probably have a reasonable amount of debt. Honestly, the huge cost of these schools isn't really mitigated by a 90-100K salary, unless maybe you are thinking of somewhere with a low col. Am I missing something with this casual talk of 160K and ease of paying off loans that often leads to everyone saying "take the higher ranked school"--even in the top 14?

If you can't figure out how to pay off your debt with $90,000 (STARTING) take home, you have bigger issues to worry about besides law school.


Are you serous---with 180K plus in loan debt that is accruing interest while paying rent, a car note, bills, food etc. ? I guess the idea of debt just doesn't bother most people on here.


The payments for 180K @ 8% work out to $1500/month for 20 years, which is 18-20% of your starting take-home pay. After several years, it's going to be closer to 10%. You shouldn't look at it like "zOMG 180K when I take home half that per year."

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McNabb
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Re: Why do people keep saying "160K"?

Postby McNabb » Thu Feb 04, 2010 10:05 pm

im_blue wrote:The payments for 180K @ 8% work out to $1500/month for 20 years, which is 18-20% of your starting take-home pay. After several years, it's going to be closer to 10%. You shouldn't look at it like "zOMG 180K when I take home half that per year."


LOL you read my mind! In the end I will probably end up taking the top 10 that costs me the least, it's one of the reasons I'm attracted to the top 10 schools in small cheap college towns (Duke, UVA, Michigan, Ithaca, etc.).

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Doritos
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Re: Why do people keep saying "160K"?

Postby Doritos » Fri Feb 05, 2010 12:11 am

McNabb wrote:
im_blue wrote:The payments for 180K @ 8% work out to $1500/month for 20 years, which is 18-20% of your starting take-home pay. After several years, it's going to be closer to 10%. You shouldn't look at it like "zOMG 180K when I take home half that per year."


LOL you read my mind! In the end I will probably end up taking the top 10 that costs me the least, it's one of the reasons I'm attracted to the top 10 schools in small cheap college towns (Duke, UVA, Michigan, Ithaca, etc.).


I feel ya mayne. That's one of the reasons I picked UVA. Cheap COL and a damn fine JD. I visited Georgetown and the admissions team was telling us that you would be lucky to find a spot anywhere close to the school for less than $1,000/month just in rent! Some people are cool with that but I'll take the $400ish I'll be paying at UVA for a place right next to the school any day...

Jon Gosselin
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Re: Why do people keep saying "160K"?

Postby Jon Gosselin » Sat Feb 06, 2010 1:43 pm

If you are going to law school intending to secure a 160k firm job, it's best to run projected earnings calculations based on three (or even two) years of biglaw salary.

Most people do not last past a few years at a firm, and lateraling to a midsize, inhouse, or government gig will result in a paycut.




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