Biglaw Bonus Watch (2013)

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How will bonuses compare to last year?

Up
21
22%
Same
66
68%
Down
10
10%
 
Total votes: 97

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Old Gregg
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Re: Biglaw Bonus Watch (2013)

Postby Old Gregg » Thu Dec 12, 2013 1:25 am

Uh, why the fuck did you go to law school if you're a money nerd who can easily tell when interest rates are going up? You should be running the biggest hedge fund in NYC with that kind of financial acumen.


Obviously I can't tell to the day when interest rates are going up, such that I'd have a serious advantage at a hedge fund. But if you keep in touch with the news, you have a general sense as to when interest rates are heading up. From what I can tell, not until mid next year at the earliest will they go up in any material way. Obviously, could very well be wrong.

Seriously though, I'd like to see the actual contracts SOFI is putting out. They have this in all caps on their website: "SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE." Lulz.


How can you not find it similarly lulzy that there are people here borrowing on 7.5% fixed, which is IMO criminal. If you're that worried about a variable interest rate, and you have excellent credit, you can get 5.5% fixed from SOFI.

Regarding SOFI itself, everyone I know who has used it has had nothing but good things to say about it. My only gripe is that you can't use a credit card to make payments like you can with Sallie Mae.
Last edited by Old Gregg on Thu Dec 12, 2013 1:27 am, edited 1 time in total.

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ExBiglawAssociate
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Re: Biglaw Bonus Watch (2013)

Postby ExBiglawAssociate » Thu Dec 12, 2013 1:26 am

Also, I'm sick and tired of the Boomer-like thinking about investing that's rampant on this site. Everyone is always saying stuff like, "Well, you'd be an idiot to pay more than the minimum if your rate is below 3.5%" or shit like that. Guess what, shitheads, it's kinda hard to find a guaranteed return greater than 3.5% (or similar), especially when you're not investing a shitload of cash. Fixed-rate returns are low when you're only investing five figures or less. Even if your risk appetite is pretty high, historical returns on stocks have been something like 1-3% over the past 6-7 years if you average it out.

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Old Gregg
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Re: Biglaw Bonus Watch (2013)

Postby Old Gregg » Thu Dec 12, 2013 1:29 am

Biglaw_Associate_V20 wrote:Also, I'm sick and tired of the Boomer-like thinking about investing that's rampant on this site. Everyone is always saying stuff like, "Well, you'd be an idiot to pay more than the minimum if your rate is below 3.5%" or shit like that. Guess what, shitheads, it's kinda hard to find a guaranteed return greater than 3.5% (or similar), especially when you're not investing a shitload of cash. Fixed-rate returns are low when you're only investing five figures or less. Even if your risk appetite is pretty high, historical returns on stocks have been something like 1-3% over the past 6-7 years if you average it out.


I edited my post above to say this:

How can you not find it similarly lulzy that there are people here borrowing on 7.5% fixed, which is IMO criminal. If you're that worried about a variable interest rate, and you have excellent credit, you can get 5.5% fixed from SOFI.

Regarding SOFI itself, everyone I know who has used it has had nothing but good things to say about it. My only gripe is that you can't use a credit card to make payments like you can with Sallie Mae.


Also, I'm not one to recommend paying minimum payments on 3.5% interest because you can get a better return elsewhere. I personally don't believe that. But at 2.5%? I don't know, that's awfully low. I average at least 5% on my investments, so if I had loans with an interest rate below 5% I'd be hard pressed to not pay the minimum payments.

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ExBiglawAssociate
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Re: Biglaw Bonus Watch (2013)

Postby ExBiglawAssociate » Thu Dec 12, 2013 1:36 am

zweitbester wrote:
Biglaw_Associate_V20 wrote:Also, I'm sick and tired of the Boomer-like thinking about investing that's rampant on this site. Everyone is always saying stuff like, "Well, you'd be an idiot to pay more than the minimum if your rate is below 3.5%" or shit like that. Guess what, shitheads, it's kinda hard to find a guaranteed return greater than 3.5% (or similar), especially when you're not investing a shitload of cash. Fixed-rate returns are low when you're only investing five figures or less. Even if your risk appetite is pretty high, historical returns on stocks have been something like 1-3% over the past 6-7 years if you average it out.


I edited my post above to say this:

How can you not find it similarly lulzy that there are people here borrowing on 7.5% fixed, which is IMO criminal. If you're that worried about a variable interest rate, and you have excellent credit, you can get 5.5% fixed from SOFI.

Regarding SOFI itself, everyone I know who has used it has had nothing but good things to say about it. My only gripe is that you can't use a credit card to make payments like you can with Sallie Mae.


Also, I'm not one to recommend paying minimum payments on 3.5% interest because you can get a better return elsewhere. I personally don't believe that. But at 2.5%? I don't know, that's awfully low. I average at least 5% on my investments, so if I had loans with an interest rate below 5% I'd be hard pressed to not pay the minimum payments.


I can't invest because I work in biglaw and am too worried about getting pwnd by an insider trading investigation.

I've got my loans at 3.5% through a family friend. The fact that this guy thought it would be a good investment for him to give me a loan at 3.5%, when he's got seven figures of liquid or semi-liquid funds to play around with, really made me question whether I could strike out on my own and get 5% or better (or give my money to a blind trust to do the same). I'm perfectly happy keeping things simple and just paying down my debt as quickly as possible. You have to take into considerations how much time you spend researching investments and managing your own money. I don't know where you work, but if you work in biglaw you're probably getting billed out at multiple hundreds of dollars. Are you really making all of that back by grabbing a slightly higher return on your (probably modestly-sized) investments?

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Old Gregg
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Re: Biglaw Bonus Watch (2013)

Postby Old Gregg » Thu Dec 12, 2013 1:42 am

I can't invest because I work in biglaw and am too worried about getting pwnd by an insider trading investigation.


Oh same here on the inside trading stuff. I don't touch stocks. Don't want to go into much more detail because it's outable, but happy to discuss in a more private setting.

Are you really making all of that back by grabbing a slightly higher return on your (probably modestly-sized) investments?


My situation is fairly unique, which is why I'm not advising others in this thread to make minimum payments on 3.5% interest. My 5% gains are a pretty conservative estimate. I get closer to 10% and sometimes higher depending on my luck.

Edit: I'm also pretty sure LendingClub investors are beating 5%, so that might be another tack to take. I'm not particularly keen to try it because I'm pretty green at evaluating borrowers, but seems interesting and promising.

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Big Shrimpin
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Re: Biglaw Bonus Watch (2013)

Postby Big Shrimpin » Thu Dec 12, 2013 9:52 am

Also don't invest for similar reasons.

Fuck you lucky fucks for getting loans at low rates. I have only the govnt/Obama to thank for my high fixed rate loans.

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NinerFan
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Re: Biglaw Bonus Watch (2013)

Postby NinerFan » Thu Dec 12, 2013 9:53 am

Does it make sense to max out 401k/IRA contributions versus putting that money to loans? I haven't tried working out the math yet but my assumption was that the tax savings + expected return from plowing that money into a mutual fund or something would exceed loan interest.

Liam
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Re: Biglaw Bonus Watch (2013)

Postby Liam » Thu Dec 12, 2013 10:22 am

Biglaw_Associate_V20 wrote:I can't invest because I work in biglaw and am too worried about getting pwnd by an insider trading investigation.


I'm just a lowly 2L who has yet to take SecReg, but why would this be the case? I can understand shying away from investments in individual assets (which most people shouldn't do anyway), but throwing money into a portfolio of independently-managed index and mutual funds shouldn't pose any liability risk, should it?

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thesealocust
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Re: Biglaw Bonus Watch (2013)

Postby thesealocust » Thu Dec 12, 2013 10:37 am

When y'all say "don't invest" you mean "don't purchase or sell securities issued by single non-investment companies," right? Like, ETFs/mutual funds/etc. are all pretty clearly still fair game no matter how much MNPI you have.

dixiecupdrinking
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Re: Biglaw Bonus Watch (2013)

Postby dixiecupdrinking » Thu Dec 12, 2013 11:33 am

I don't see what could be controversial about the Sofi recommendation. Variable rates capped at 8.5% and currently at 3% seem far preferable to 7.9 fixed grad plus.

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Tiago Splitter
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Re: Biglaw Bonus Watch (2013)

Postby Tiago Splitter » Thu Dec 12, 2013 12:05 pm

dixiecupdrinking wrote:I don't see what could be controversial about the Sofi recommendation. Variable rates capped at 8.5% and currently at 3% seem far preferable to 7.9 fixed grad plus.

You just lose the potential for loan forgiveness. Not really controversial either way, just something to consider.

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Old Gregg
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Re: Biglaw Bonus Watch (2013)

Postby Old Gregg » Thu Dec 12, 2013 12:09 pm

Apparently if you lose your job, SoFi connects you to someone that helps you with the job search (it's the "Social" aspect of SoFi). Sounds gimmicky, but a good gesture nonetheless. It's, of course, in SoFi's best interest that you pay off the loan.

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Big Shrimpin
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Re: Biglaw Bonus Watch (2013)

Postby Big Shrimpin » Thu Dec 12, 2013 12:10 pm

Tiago Splitter wrote:
dixiecupdrinking wrote:I don't see what could be controversial about the Sofi recommendation. Variable rates capped at 8.5% and currently at 3% seem far preferable to 7.9 fixed grad plus.

You just lose the potential for loan forgiveness. Not really controversial either way, just something to consider.


Yurp.

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Old Gregg
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Re: Biglaw Bonus Watch (2013)

Postby Old Gregg » Thu Dec 12, 2013 12:13 pm

Big Shrimpin wrote:
Tiago Splitter wrote:
dixiecupdrinking wrote:I don't see what could be controversial about the Sofi recommendation. Variable rates capped at 8.5% and currently at 3% seem far preferable to 7.9 fixed grad plus.

You just lose the potential for loan forgiveness. Not really controversial either way, just something to consider.


Yurp.


Bud, with respect to "loan forgiveness" you actually still suffer from a tax bomb (IIRC, Congress still hasn't acted to remove it). You're going to continue throwing money down the drain waiting for Congress to act???

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Old Gregg
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Re: Biglaw Bonus Watch (2013)

Postby Old Gregg » Thu Dec 12, 2013 12:15 pm

thesealocust wrote:When y'all say "don't invest" you mean "don't purchase or sell securities issued by single non-investment companies," right? Like, ETFs/mutual funds/etc. are all pretty clearly still fair game no matter how much MNPI you have.


Of course.

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ExBiglawAssociate
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Re: Biglaw Bonus Watch (2013)

Postby ExBiglawAssociate » Thu Dec 12, 2013 1:00 pm

NinerFan wrote:Does it make sense to max out 401k/IRA contributions versus putting that money to loans? I haven't tried working out the math yet but my assumption was that the tax savings + expected return from plowing that money into a mutual fund or something would exceed loan interest.


Probably right, although who knows what the expected return is on things now that we're in the "new normal."

With respect to mutual funds/ETFs, it was my understanding that most of them charge pretty ridiculous fees. I looked at a chart of some of the best performing ETFs and people weren't making out with much of a return due to the fees. Maybe this has changed? In any event, I plan on living maybe 2-3 more years given my current lifestyle, so I should probably just spend everything on hookers and blow.

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Old Gregg
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Re: Biglaw Bonus Watch (2013)

Postby Old Gregg » Thu Dec 12, 2013 1:01 pm

Biglaw_Associate_V20 wrote:
NinerFan wrote:Does it make sense to max out 401k/IRA contributions versus putting that money to loans? I haven't tried working out the math yet but my assumption was that the tax savings + expected return from plowing that money into a mutual fund or something would exceed loan interest.


Probably right, although who knows what the expected return is on things now that we're in the "new normal."

With respect to mutual funds/ETFs, it was my understanding that most of them charge pretty ridiculous fees. I looked at a chart of some of the best performing ETFs and people weren't making out with much of a return due to the fees. Maybe this has changed? In any event, I plan on living maybe 2-3 more years given my current lifestyle, so I should probably just spend everything on hookers and blow.


That's why you use Vanguard, buddy.

IMO 401k isn't worth it with your loans at 7.95% interest and no matching from your employer.

dixiecupdrinking
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Re: Biglaw Bonus Watch (2013)

Postby dixiecupdrinking » Thu Dec 12, 2013 1:05 pm

Also anyone in biglaw aggressively paying down loans is pretty far from being eligible for forgiveness. I get that risk aversion might lead you to want the IBR safety net, but at a certain point you're paying more than that's worth. IMO a 4% interest rate reduction is past that point.

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Big Shrimpin
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Re: Biglaw Bonus Watch (2013)

Postby Big Shrimpin » Thu Dec 12, 2013 1:13 pm

dixiecupdrinking wrote:Also anyone in biglaw aggressively paying down loans is pretty far from being eligible for forgiveness. I get that risk aversion might lead you to want the IBR safety net, but at a certain point you're paying more than that's worth. IMO a 4% interest rate reduction is past that point.


But getting shitcanned/burned out after 3-4 when you've started with nearly 200K and live in MFH will always instill THE FEAR of not having that safety net. Paying aggressively is still going to take me at least 4 years. Before ITE, 2-3 years was doable. Now, not so much with these shitbonuses (unless you're at BSF/WLRK/etc.).

Also, SOFIE only offered me like a net 2% or so reduction, so for me, the calculus just leads to a different answer.

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thesealocust
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Re: Biglaw Bonus Watch (2013)

Postby thesealocust » Thu Dec 12, 2013 1:15 pm

Biglaw_Associate_V20 wrote:With respect to mutual funds/ETFs, it was my understanding that most of them charge pretty ridiculous fees. I looked at a chart of some of the best performing ETFs and people weren't making out with much of a return due to the fees. Maybe this has changed? In any event, I plan on living maybe 2-3 more years given my current lifestyle, so I should probably just spend everything on hookers and blow.


Yeah, your info is way off base here. One of my favorite options is the Fidelity Spartan S&P 500 fund, which is common in 401(k) plans and charges 0.05%in fees per annum. That's basically free: literally 20-40x less than a lot of shitty funds out there.

As the artist currently known as zweitbester mentions, Vanguard is another great option for absurdly low fee mutual funds and ETFs.

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Old Gregg
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Re: Biglaw Bonus Watch (2013)

Postby Old Gregg » Thu Dec 12, 2013 1:16 pm

dixiecupdrinking wrote:Also anyone in biglaw aggressively paying down loans is pretty far from being eligible for forgiveness. I get that risk aversion might lead you to want the IBR safety net, but at a certain point you're paying more than that's worth. IMO a 4% interest rate reduction is past that point.


Yup. Especially if you can score an interest rate lower than 3%, you're getting an interest rate more competitive than basically any mortgage out there (and you don't see people rushing to pay down their 30-year fixed, though I get that they're also gaining equity in their property in the process, but not sure how that changes the equation).

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Old Gregg
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Re: Biglaw Bonus Watch (2013)

Postby Old Gregg » Thu Dec 12, 2013 1:18 pm

thesealocust wrote:
Biglaw_Associate_V20 wrote:With respect to mutual funds/ETFs, it was my understanding that most of them charge pretty ridiculous fees. I looked at a chart of some of the best performing ETFs and people weren't making out with much of a return due to the fees. Maybe this has changed? In any event, I plan on living maybe 2-3 more years given my current lifestyle, so I should probably just spend everything on hookers and blow.


Yeah, your info is way off base here. One of my favorite options is the Fidelity Spartan S&P 500 fund, which is common in 401(k) plans and charges 0.05%in fees per annum. That's basically free: literally 20-40x less than a lot of shitty funds out there.

As the artist currently known as zweitbester mentions, Vanguard is another great option for absurdly low fee mutual funds and ETFs.


Thanks bud. Also, JPMorgan Private Bank gives clients access to their inhouse ETFs and Mutual Funds at discounted loads, some of which are pretty competitive with Vanguard.

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Old Gregg
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Re: Biglaw Bonus Watch (2013)

Postby Old Gregg » Thu Dec 12, 2013 1:21 pm

Big Shrimpin wrote:
dixiecupdrinking wrote:Also anyone in biglaw aggressively paying down loans is pretty far from being eligible for forgiveness. I get that risk aversion might lead you to want the IBR safety net, but at a certain point you're paying more than that's worth. IMO a 4% interest rate reduction is past that point.


But getting shitcanned/burned out after 3-4 when you've started with nearly 200K and live in MFH will always instill THE FEAR of not having that safety net. Paying aggressively is still going to take me at least 4 years. Before ITE, 2-3 years was doable. Now, not so much with these shitbonuses (unless you're at BSF/WLRK/etc.).

Also, SOFIE only offered me like a net 2% or so reduction, so for me, the calculus just leads to a different answer.


True, though you should work to improve your credit score so that you can qualify for a better interest rate. Also, you can refinance the loan for a lower interest rate while you're on SOFI in case your credit improves and you want that interest rate.

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Tiago Splitter
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Re: Biglaw Bonus Watch (2013)

Postby Tiago Splitter » Thu Dec 12, 2013 1:22 pm

dixiecupdrinking wrote:Also anyone in biglaw aggressively paying down loans is pretty far from being eligible for forgiveness. I get that risk aversion might lead you to want the IBR safety net, but at a certain point you're paying more than that's worth. IMO a 4% interest rate reduction is past that point.

Obviously if you intend to stay in private practice for the long term and can get a 4% reduction it's a pretty easy choice. But for someone set on getting into some kind of PI or government work after a couple of years in Biglaw keeping the PSLF option open is pretty important.

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Old Gregg
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Re: Biglaw Bonus Watch (2013)

Postby Old Gregg » Thu Dec 12, 2013 1:26 pm

Before ITE, 2-3 years was doable. Now, not so much with these shitbonuses (unless you're at BSF/WLRK/etc.).


Before ITE, nobody I know in biglaw paid off their loans that aggressively because before ITE they were getting loans at pretty competitive interest rates. Back then, many private lenders were offering competitive variable interest rate loans. Most of my loans for law school were with a private lender (who now no longer provides student loans) and they were hovering close to 2% interest when I graduated.




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