Bronte wrote:birdlaw117 wrote:Bronte, wouldn't the tax rate be 15%?
The analysis is still good, but it would make it closer.
Yeah I guess you're right that the capital gains rate would be 15%. Here's the thing: when the risk free rate is between 0.04% and 3.26% before taxes and you have available to you a 7.9% risk free return after taxes, you are making a massive "free return" that is not available anywhere else in the market.
The risk in the stock market is very real. Quakeroats is talking about "there's no risk in the long term" out one side of his mouth and "you need liquidity" out of the other side. Those two statements are completely contradictory. If you end up having an event that requires liquidity (e.g., you get laid off) and the stock market has tanked, you're going to have to sell your liquidity cushion at a major loss. Even in the long term, the stock market is very risky. If a recession or market collapse occurs during your retirement window, there goes all your earnings and maybe even some of your principal.
Exactly. I was just pointing out that little thing. The overall analysis is still sound, it just changes the numbers.
And you bring up a good point that Biglaw jobs have a pretty good correlation with the overall market. So if you lose one you could very easily lose both, which would really fuck you over.