Paying off 200k/300k debt on big law salary

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jlamb555
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Paying off 200k/300k debt on big law salary

Postby jlamb555 » Thu Mar 27, 2014 12:42 pm

Everyone has a different standard of life they are ok with but based on a standard big law salary is it possible to pay off 200k in 4 years? 300k in 5 years or 6 years? I crunched the numbers a little and even with a NYC COL this seems quite possible.

Daily_Double
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Re: Paying off 200k/300k debt on big law salary

Postby Daily_Double » Thu Mar 27, 2014 12:44 pm

.
Last edited by Daily_Double on Fri Apr 25, 2014 3:01 pm, edited 1 time in total.

Poopface
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Re: Paying off 200k/300k debt on big law salary

Postby Poopface » Thu Mar 27, 2014 12:58 pm

Daily_Double wrote:One issue is that it requires the assumption that you will last 4+ years in biglaw.


Wow excellent point. I bet the poster NEVER even considered this!!!!!! Thank goodness you were able to think of this and bring it to his attention.

To answer the question, there's no reason why you can't make 5-6g/mo payments, live very modestly, and have 200k+ debt paid off in 4ish years.

buffalo_
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Re: Paying off 200k/300k debt on big law salary

Postby buffalo_ » Thu Mar 27, 2014 12:58 pm

Daily_Double wrote:One issue is that it requires the assumption that you will last 4+ years in biglaw.


I hear this all the time. That people don't "last in BigLaw." What does that even mean? Do they just fire all of the 5th year associates? And if they don't, then it means people are choosing to leave. And when they do leave does their income drop by a considerable amount? How much?

09042014
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Re: Paying off 200k/300k debt on big law salary

Postby 09042014 » Thu Mar 27, 2014 1:08 pm

buffalo_ wrote:
Daily_Double wrote:One issue is that it requires the assumption that you will last 4+ years in biglaw.


I hear this all the time. That people don't "last in BigLaw." What does that even mean? Do they just fire all of the 5th year associates? And if they don't, then it means people are choosing to leave. And when they do leave does their income drop by a considerable amount? How much?


It wildly varies, but from what I hear its 50% quitting and 50% getting fired. More quit early, and more get fired later on. It's easy to say "but I won't quit!" After getting chewed out for not responding to an email at 10pm on friday night about a fake deadline, you'll change your mind.

200k in 5 years is 4k a month. Every month. That's half your salary.

300k in 5 years is 6k a month. Every month. ---- This is impossible unless someone is paying for your costs.

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Cal Trask
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Re: Paying off 200k/300k debt on big law salary

Postby Cal Trask » Thu Mar 27, 2014 1:12 pm

buffalo_ wrote:
Daily_Double wrote:One issue is that it requires the assumption that you will last 4+ years in biglaw.


I hear this all the time. That people don't "last in BigLaw." What does that even mean? Do they just fire all of the 5th year associates? And if they don't, then it means people are choosing to leave. And when they do leave does their income drop by a considerable amount? How much?


viewtopic.php?f=23&t=226797

Especially from page 5-onward, an interesting read. Essentially, no, they don't fire people. More often than not, many people burn out after a couple years and try to find other opportunities. People do get fired, but that's not the reason for such horrible attrition rates; it's a grueling lifestyle with room for little else. Income often drops after they leave, but that's going to be contingent upon where they go. Transitioning into local government work? Probably a pretty steep pay cut. Going in-house? Probably a noticeable cut as well, but not as severe.

jlamb555
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Re: Paying off 200k/300k debt on big law salary

Postby jlamb555 » Thu Mar 27, 2014 1:54 pm

Desert Fox wrote:
300k in 5 years is 6k a month. Every month. ---- This is impossible unless someone is paying for your costs.


I calculated the following payments by year. 60, 65, 75, 87, 98. I didn't check precisely but this should pay off 300. Considering lockstep + bonuses it is not impossible.

rad lulz
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Re: Paying off 200k/300k debt on big law salary

Postby rad lulz » Thu Mar 27, 2014 2:02 pm

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Last edited by rad lulz on Fri Sep 02, 2016 12:46 am, edited 1 time in total.

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rayiner
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Re: Paying off 200k/300k debt on big law salary

Postby rayiner » Thu Mar 27, 2014 2:04 pm

Poopface wrote:
Daily_Double wrote:One issue is that it requires the assumption that you will last 4+ years in biglaw.


Wow excellent point. I bet the poster NEVER even considered this!!!!!! Thank goodness you were able to think of this and bring it to his attention.

To answer the question, there's no reason why you can't make 5-6g/mo payments, live very modestly, and have 200k+ debt paid off in 4ish years.


If you're single, your take-home in NYC is under $8,000 per month. To pay off $250k in 4 years, you have to make payments of $6,000 per month. That means living in a major metro area on $2,000 per month.

It's probably possible to do this, but almost nobody manages. People say "oh, just live like a college student!"[1] What they don't realize is that living like a college student is one thing when you're 19, in a college town, in an environment where it's okay to dress like a bum, and have maybe 3-4 hours of real work per day. It's very different when you're pushing 30, working 60-70 hour weeks in a major metro area, have to get your clothes dry cleaned, etc. At that point your desire to save a bit of money by cleaning your own bathrooms or brown bagging is zilch.

[1] Stupid things rayiner said about loan payments 5 years ago: http://www.top-law-schools.com/archives ... 15&t=71460. At the time I think I calculated I would put $4-5k/month towards loans. Instead, I barely made my $3k payment (10 year repayment) each month.
Last edited by rayiner on Thu Mar 27, 2014 2:13 pm, edited 2 times in total.

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t-14orbust
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Re: Paying off 200k/300k debt on big law salary

Postby t-14orbust » Thu Mar 27, 2014 2:04 pm

rad lulz wrote:
jlamb555 wrote:
Desert Fox wrote:
300k in 5 years is 6k a month. Every month. ---- This is impossible unless someone is paying for your costs.


I calculated the following payments by year. 60, 65, 75, 87, 98. I didn't check precisely but this should pay off 300. Considering lockstep + bonuses it is not impossible.

160k in NYC is about 96k after taxes

Enjoy living off 36k (plus whatever is after tax of you paltry $10k bonus) in NYC

Be sure to think about the conveniences you'll find yourself paying for (cabs, ordered out lunch, dry cleaning) when you bill 2000+ hrs/yr


I've made a huge mistake

jlamb555
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Re: Paying off 200k/300k debt on big law salary

Postby jlamb555 » Thu Mar 27, 2014 2:29 pm

rad lulz wrote:
jlamb555 wrote:
Desert Fox wrote:
300k in 5 years is 6k a month. Every month. ---- This is impossible unless someone is paying for your costs.


I calculated the following payments by year. 60, 65, 75, 87, 98. I didn't check precisely but this should pay off 300. Considering lockstep + bonuses it is not impossible.

160k in NYC is about 96k after taxes


I got 103k but maybe my calculator is off. Not NJ resident either.

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rayiner
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Re: Paying off 200k/300k debt on big law salary

Postby rayiner » Thu Mar 27, 2014 2:32 pm

jlamb555 wrote:
rad lulz wrote:
jlamb555 wrote:
Desert Fox wrote:
300k in 5 years is 6k a month. Every month. ---- This is impossible unless someone is paying for your costs.


I calculated the following payments by year. 60, 65, 75, 87, 98. I didn't check precisely but this should pay off 300. Considering lockstep + bonuses it is not impossible.

160k in NYC is about 96k after taxes


I got 103k but maybe my calculator is off. Not NJ resident either.


You're forgetting city tax, which at $160k is about $6k per year.

buffalo_
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Re: Paying off 200k/300k debt on big law salary

Postby buffalo_ » Thu Mar 27, 2014 2:52 pm

Isn't loan interest tax deductible? So the take home should be higher or you would get a generous refund.

hdunlop
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Re: Paying off 200k/300k debt on big law salary

Postby hdunlop » Thu Mar 27, 2014 2:57 pm

Up to $2,500.

rad lulz
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Re: Paying off 200k/300k debt on big law salary

Postby rad lulz » Thu Mar 27, 2014 3:00 pm

buffalo_ wrote:Isn't loan interest tax deductible? So the take home should be higher or you would get a generous refund.

Phase out at 75k

Max $2500 deduction

Ljl

buffalo_
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Re: Paying off 200k/300k debt on big law salary

Postby buffalo_ » Thu Mar 27, 2014 3:09 pm

rad lulz wrote:
buffalo_ wrote:Isn't loan interest tax deductible? So the take home should be higher or you would get a generous refund.

Phase out at 75k

Max $2500 deduction

Ljl


Okay thanks.

09042014
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Re: Paying off 200k/300k debt on big law salary

Postby 09042014 » Thu Mar 27, 2014 4:24 pm

Just live on less than CostCo cashier makers, in manhattan, for 5 years , just to end up with a ZERO net worth. Sounds shrewd.

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worldtraveler
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Re: Paying off 200k/300k debt on big law salary

Postby worldtraveler » Thu Mar 27, 2014 4:57 pm

rayiner wrote:
Poopface wrote:
Daily_Double wrote:One issue is that it requires the assumption that you will last 4+ years in biglaw.


Wow excellent point. I bet the poster NEVER even considered this!!!!!! Thank goodness you were able to think of this and bring it to his attention.

To answer the question, there's no reason why you can't make 5-6g/mo payments, live very modestly, and have 200k+ debt paid off in 4ish years.


If you're single, your take-home in NYC is under $8,000 per month. To pay off $250k in 4 years, you have to make payments of $6,000 per month. That means living in a major metro area on $2,000 per month.

It's probably possible to do this, but almost nobody manages. People say "oh, just live like a college student!"[1] What they don't realize is that living like a college student is one thing when you're 19, in a college town, in an environment where it's okay to dress like a bum, and have maybe 3-4 hours of real work per day. It's very different when you're pushing 30, working 60-70 hour weeks in a major metro area, have to get your clothes dry cleaned, etc. At that point your desire to save a bit of money by cleaning your own bathrooms or brown bagging is zilch.

[1] Stupid things rayiner said about loan payments 5 years ago: http://www.top-law-schools.com/archives ... 15&t=71460. At the time I think I calculated I would put $4-5k/month towards loans. Instead, I barely made my $3k payment (10 year repayment) each month.


I live on not much more than that amount in DC, because I have a fairly low paying fellowship and support 2 people on it. It's kind of like being a student, except you have more expenses. I have to commute, I have to have professional clothes, have to dryclean said clothes, end up at networking events and dinners with colleagues who make 5x what I do. It is WAY harder than living on that amount as a student. I still do insane things to save money (take the bus, brown bag lunches, sell stuff on ebay, etc.) but it's very tough to do a lot of cost saving measures when you just don't have the time. I'm able to do it, but wouldn't recommend it.

09042014
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Re: Paying off 200k/300k debt on big law salary

Postby 09042014 » Thu Mar 27, 2014 6:49 pm

worldtraveler wrote:
rayiner wrote:
Poopface wrote:
Daily_Double wrote:One issue is that it requires the assumption that you will last 4+ years in biglaw.


Wow excellent point. I bet the poster NEVER even considered this!!!!!! Thank goodness you were able to think of this and bring it to his attention.

To answer the question, there's no reason why you can't make 5-6g/mo payments, live very modestly, and have 200k+ debt paid off in 4ish years.


If you're single, your take-home in NYC is under $8,000 per month. To pay off $250k in 4 years, you have to make payments of $6,000 per month. That means living in a major metro area on $2,000 per month.

It's probably possible to do this, but almost nobody manages. People say "oh, just live like a college student!"[1] What they don't realize is that living like a college student is one thing when you're 19, in a college town, in an environment where it's okay to dress like a bum, and have maybe 3-4 hours of real work per day. It's very different when you're pushing 30, working 60-70 hour weeks in a major metro area, have to get your clothes dry cleaned, etc. At that point your desire to save a bit of money by cleaning your own bathrooms or brown bagging is zilch.

[1] Stupid things rayiner said about loan payments 5 years ago: http://www.top-law-schools.com/archives ... 15&t=71460. At the time I think I calculated I would put $4-5k/month towards loans. Instead, I barely made my $3k payment (10 year repayment) each month.


I live on not much more than that amount in DC, because I have a fairly low paying fellowship and support 2 people on it. It's kind of like being a student, except you have more expenses. I have to commute, I have to have professional clothes, have to dryclean said clothes, end up at networking events and dinners with colleagues who make 5x what I do. It is WAY harder than living on that amount as a student. I still do insane things to save money (take the bus, brown bag lunches, sell stuff on ebay, etc.) but it's very tough to do a lot of cost saving measures when you just don't have the time. I'm able to do it, but wouldn't recommend it.


I also bet you are converting life expectancy to dollars by living in a cheap but dangerous place.

hdunlop
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Re: Paying off 200k/300k debt on big law salary

Postby hdunlop » Thu Mar 27, 2014 6:57 pm

Laughing out loud at taking the bus as an insane thing. That said, credit to you for living modestly.

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worldtraveler
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Re: Paying off 200k/300k debt on big law salary

Postby worldtraveler » Thu Mar 27, 2014 7:54 pm

hdunlop wrote:Laughing out loud at taking the bus as an insane thing. That said, credit to you for living modestly.


It takes an extra hour out of my day, so yeah it kind of is.

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jn7
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Re: Paying off 200k/300k debt on big law salary

Postby jn7 » Thu Mar 27, 2014 8:15 pm

Outside of the obvious additional interest one would pay for income based repayment, I don't see anybody recommending 20-25 years of income based repayment >> shoving as much money into the debt as possible. Is there any merit in just accepting something like a 15% reduction in whatever salary you are making for the next 20-25 years? It seems like fighting like crazy to pay down the debt, with seemingly low prospects of being able to survive biglaw to even dent huge debt, you're just living like a slave rather than paying additional interest, but being able to have savings/some semblance of life enjoyment? I'm still aways away from making any payments, but I'm curious about this b/c it seems most everyone goes to paying off ASAP.

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patogordo
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Re: Paying off 200k/300k debt on big law salary

Postby patogordo » Thu Mar 27, 2014 8:19 pm

10% with paye. but yea that's my plan, make minimum payments and die young.

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BruceWayne
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Re: Paying off 200k/300k debt on big law salary

Postby BruceWayne » Thu Mar 27, 2014 8:26 pm

I just want to point something out to all the 0Ls and 1Ls. Have you guys noticed, that even amongst posters who are all very different and definitely didn't see eye to eye in the past, that ALL of us who have actually graduated and gotten out into the real world concur about a lot of things? Like how these schools (yes even the top ones) really aren't worth the debt. And how unlikely you are to actually make these massive payments every month on your loans and to get rid of that 300K debt in lol 5 years. Or how we all agree that the likelihood of you actually staying in these big firm jobs is awful. But no just go ahead and keep thinking you know everything about these issues and we're just exaggerating. I mean damn DesertFox actually pulled off what's supposed to be the best case outcome if you have sticker debt and EVEN he is telling you it's not a good idea. And straight LOL at the living off $2K a month in NYC while working at a big firm is no big deal. I'm having a hard ass time living off a little less than that in a market with a COL half of NYC.

I really do find it kind of amazing that so many of us who entered at the same time have almost all come out with very similar stances on what things are like. It says a lot about what this profession is really like at the moment. Almost every post that I've read from WorldTraveler, Desert, Rad, and rayiner sounds like what I've experienced or what other people who I graduated with experienced as well. We were all bamboozled by these schools and this field.

09042014
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Re: Paying off 200k/300k debt on big law salary

Postby 09042014 » Thu Mar 27, 2014 8:29 pm

BruceWayne wrote:I just want to point something out to all the 0Ls and 1Ls. Have you guys noticed, that even amongst posters who are all very different and definitely didn't see eye to eye in the past, that ALL of us who have actually graduated and gotten out into the real world concur about a lot of things? Like how these schools (yes even the top ones) really aren't worth the debt. And how unlikely you are to actually make these massive payments every month on your loans and to get rid of that 300K debt in lol 5 years. Or how we all agree that the likelihood of you actually staying in these big firm jobs is awful. But no just go ahead and keep thinking you know everything about these issues and we're just exaggerating. I mean damn DesertFox actually pulled off what's supposed to be the best case outcome if you have sticker debt and EVEN he is telling you it's not a good idea. And straight LOL at the living off $2K a month in NYC while working at a big firm is no big deal. I'm having a hard ass time living off a little less than that in a market with a COL half of NYC.

I really do find it kind of amazing that so many of us who entered at the same time have almost all come out with very similar stances on what things are like. It says a lot about what this profession is really like at the moment. Almost every post that I've read from WorldTraveler, Desert, Rad, and rayiner sounds like what I've experienced or what other people who I graduated with experienced as well. We were all bamboozled by these schools and this field.


The bottom line is, even if you win, get the fancy big law job, you still lose when you take out six figs of debt.




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