Personal Finance 101 for Young Lawyers

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JenDarby

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Re: Personal Finance 101 for Young Lawyers

Postby JenDarby » Fri Nov 17, 2017 5:42 pm

boredtodeath wrote:
SplitMyPants wrote:
bk1 wrote:Go with the 15 year and invest the difference imo.

Danger Zone wrote:Agreed, that's what I'm doing


thanks for the input—much appreciated


Doing the same. Interest rate on the loan down to 2.95% now. Even in a bear market you can beat that, and in this market...

same
Last edited by JenDarby on Mon Jan 29, 2018 10:45 pm, edited 1 time in total.

somedude

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Re: Personal Finance 101 for Young Lawyers

Postby somedude » Wed Dec 27, 2017 1:01 pm

kalvano wrote:
Danger Zone wrote:
bk1 wrote:
Danger Zone wrote:If your 401k offers a Roth option, you can mega backdoor if you want to save more aggressively

iirc, there are other requirements such that offering Roth doesn't necessarily mean you can mega backdoor.

You're probably right. I haven't done my research because my company doesn't offer the roth option, so I stopped there.


Your plan has to offer in-service distributions, which is pretty rare. Otherwise you can’t touch 401(k) money until you either leave / get fire, or are 59.5.


You should call the plan-provider, if you want to mega backdoor. It's not "that" rare for a plan to allow after-tax 401 k contributions and in-service withdrawals, which is what you need. My plan does it and I know plans at at least some other firms do too.

uvheylaw

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Re: Personal Finance 101 for Young Lawyers

Postby uvheylaw » Wed Jan 03, 2018 8:09 am

If I convert a non deductible IRA to a Roth, does the 5 year holding period apply to the conversion? Just trying to determine if I could access a portion of the money for a house in the next few years if need be.

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Re: Personal Finance 101 for Young Lawyers

Postby Anonymous User » Wed Jan 03, 2018 4:44 pm

What kind of rates are people getting on refi amounts near $200k, in the dc area?
And with who?

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Aergia

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Re: Personal Finance 101 for Young Lawyers

Postby Aergia » Wed Jan 03, 2018 5:28 pm

Tagging. Great post, thanks!

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kalvano

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Re: Personal Finance 101 for Young Lawyers

Postby kalvano » Wed Jan 03, 2018 5:52 pm

uvheylaw wrote:If I convert a non deductible IRA to a Roth, does the 5 year holding period apply to the conversion? Just trying to determine if I could access a portion of the money for a house in the next few years if need be.


https://www.biglawinvestor.com/5-year-roth-ira-rules/

uvheylaw

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Re: Personal Finance 101 for Young Lawyers

Postby uvheylaw » Wed Jan 03, 2018 8:42 pm

kalvano wrote:
uvheylaw wrote:If I convert a non deductible IRA to a Roth, does the 5 year holding period apply to the conversion? Just trying to determine if I could access a portion of the money for a house in the next few years if need be.


https://www.biglawinvestor.com/5-year-roth-ira-rules/


This doesn’t make sense to me. If there is no early withdrawal penalty for contributions to a non-deductible IRA, why would you get hit with a holding period on the Contributions you already paid taxes on if you converted it to a Roth? What type of behavior could that be trying to prevent?

lawposeidon

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Re: Personal Finance 101 for Young Lawyers

Postby lawposeidon » Tue Jun 05, 2018 6:07 pm

Holy crap this is a good thread. Salute to OP.

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Re: Personal Finance 101 for Young Lawyers

Postby Anonymous User » Wed Jun 13, 2018 8:29 pm

Hoping for some advice. Much appreciated in advance.

Junior associate. Take home pay, less healthcare, rent, car/insurance, full 401k contributions, etc., is 3500/month. I'm currently paying the monthly minimum on my student loans through a federal loan servicer. I'm barely scratching the surface of interest, if at all, though.

Goals: buy house, pay off loans.

I figure I could refinance with First Republic and pay off loans within 10 years, while saving 30+k/year for a down payment. Or I could be super aggressive and pay off loans in 5-7 years, while putting off the home buying for a few more years. What are your guys' thoughts? Also, what do you do with savings once you've established an emergency fund? I've done a lot of reading, but all the conflicting opinions have left me confused.

Thank you again.

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Re: Personal Finance 101 for Young Lawyers

Postby Anonymous User » Thu Jun 14, 2018 6:09 pm

Anonymous User wrote:Hoping for some advice. Much appreciated in advance.

Junior associate. Take home pay, less healthcare, rent, car/insurance, full 401k contributions, etc., is 3500/month. I'm currently paying the monthly minimum on my student loans through a federal loan servicer. I'm barely scratching the surface of interest, if at all, though.

Goals: buy house, pay off loans.

I figure I could refinance with First Republic and pay off loans within 10 years, while saving 30+k/year for a down payment. Or I could be super aggressive and pay off loans in 5-7 years, while putting off the home buying for a few more years. What are your guys' thoughts? Also, what do you do with savings once you've established an emergency fund? I've done a lot of reading, but all the conflicting opinions have left me confused.

Thank you again.

I don’t know your loan balance or salary but I took the aggressive approach and I’ve paid off my $160k in loans and bought a $500k house. I’m a 4th year at a market paying firm in Los Angeles

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Re: Personal Finance 101 for Young Lawyers

Postby Anonymous User » Mon Jun 18, 2018 4:07 pm

I refinanced my loans ($200k+) with FRB last year at 2.95% on a 15 year repayment track. I pay what I owe to FRB and I invest whatever money I have left over at the end of each month after rent, other expenses, etc. I don't feel the need to pay my loan down aggressively when I can get a better return in the market.

Volga9673

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Re: Personal Finance 101 for Young Lawyers

Postby Volga9673 » Wed Jul 18, 2018 11:12 am

Sticked

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Re: Personal Finance 101 for Young Lawyers

Postby Anonymous User » Thu Jul 19, 2018 10:59 pm

Anonymous User wrote:I don’t know your loan balance or salary but I took the aggressive approach and I’ve paid off my $160k in loans and bought a $500k house. I’m a 4th year at a market paying firm in Los Angeles


Where were you able to buy a $500k house in LA? I would love to do that.

championpyro

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Re: Personal Finance 101 for Young Lawyers

Postby championpyro » Thu Jul 26, 2018 2:54 pm

Last year I quit my job and my 401k was automatically rolled into an IRA because it was only about 4k. I haven't touched it since. This post has inspired me to diversify a bit, but in order to select my investments, I am being asked to fill out a Traditional IRA Simplifier packet. Has anyone else had to fill one of these out? The company it is with is called TotalIRA, but I would like to transfer the funds to a different company like vanguard or something. Looking for any other advice on filling out the form, transferring this to another account, or changing it into a Roth. Thank you.

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Re: Personal Finance 101 for Young Lawyers

Postby Anonymous User » Thu Aug 09, 2018 12:10 pm

should I refinance with sofi? 115k debt, making 180k. Doing 5k a month at student loans.
What is the typical fee for refinancing? $500?

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Re: Personal Finance 101 for Young Lawyers

Postby Anonymous User » Thu Aug 09, 2018 12:41 pm

Anonymous User wrote:should I refinance with sofi? 115k debt, making 180k. Doing 5k a month at student loans.
What is the typical fee for refinancing? $500?


The answer also depends on your plans and risk tolerance, but I think most people would suggest that you refinance in your position. Refinancing is free (and you should get some money from a referral bonus if you hit up someone in the student loans thread). Be sure to check out First Republic Bank if you are in one of their areas. They have by far the best rates.

SplitMyPants

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Re: Personal Finance 101 for Young Lawyers

Postby SplitMyPants » Thu Aug 09, 2018 1:36 pm

Better be quick tho. FRB is raising rates this month in keeping with the conventional wisdom that the fed will continue to raise rates. They already increased their rates in January for all loan terms longer than 5-years.

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Re: Personal Finance 101 for Young Lawyers

Postby BigLaw Burnout » Sun Aug 12, 2018 10:53 am

Great tips in this thread. Couldn't agree more with the OP. Save as much as you can and invest in the stock market.

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Re: Personal Finance 101 for Young Lawyers

Postby Anonymous User » Wed Aug 15, 2018 5:56 pm

Junior/mid level associate in a lower than market, but close to market paying firm.

100k debt, just refinanced to 10 year plan at 3%.
35k in stock market.
10k in savings (has to stay in bank (long story)).

Going forward, my goals are to pay off the loan and buy a house (I'll need ~200k for down payment in my insane COL city). After paying off living expenses, monthly loan payment, maxing out 401k, etc., where should remaining savings go? I know savings accounts are stupid, as are CDs. What do you guys think of something like Betterment (for a down-payment savings platform) to park my money for a few years?

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Re: Personal Finance 101 for Young Lawyers

Postby Anonymous User » Wed Aug 15, 2018 6:25 pm

4th Year Associate - just thought I would chime in since I've actually done pretty well over the last 4 years in terms of saving and paying down loans:

When I Graduated 4 years ago:
- $250,000 in student loans
- No Savings

Today:
- $110,000 in student loans remaining (I''ve refinanced about 6 times now to both lower my rate and raise my rate and push out the term)
- $75,000 in 401K/IRA
- $170,000 in high yield savings account and a few thousand in a checking and brokerage account

Basically, I can pay off my loans tomorrow, but I like having the cash sit around in case the economy explodes so I have a cushion if I loose my job (or even if I want to say fuck it and quit). I lived in a high COL city but had roommates, never bought clothes or nice things, but did go on some fun vacations where we budgeted and didn't go all out (except on food). Overall, my net worth has swung, including retirement accounts from -$250,000 to +$135,000 in 4 years.

My wife and I have decided against buying a house for now since its a sellers market and we don't want to get ripped off or throw away cash for a down payment that can stay in our "fuck it fund". We also pulled all money out of the stock market because our country is being run by the dumbest people on the planet and the market was overvalued 3 years ago.

Edit: Retirement accounts are all stocks, didn't pull those out since we can't touch them for 30 years.

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Re: Personal Finance 101 for Young Lawyers

Postby Anonymous User » Thu Aug 16, 2018 9:38 am

Anonymous User wrote:...We also pulled all money out of the stock market because our country is being run by the dumbest people on the planet and the market was overvalued 3 years ago.

Edit: Retirement accounts are all stocks, didn't pull those out since we can't touch them for 30 years.


This is exactly what I did a few weeks ago - even moved about half of our retirement accounts to earlier target date funds (e.g. 70/30 stock/bond instead of 90/10).


What are the best places to park $100-200k for the next couple years while we wait for the market to drop a bit? Currently just put a bunch in a high yield savings account and have found some short term CDs, but obviously would like to make more than 2-2.5% with that amount of money.

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Yugihoe

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Re: Personal Finance 101 for Young Lawyers

Postby Yugihoe » Thu Aug 16, 2018 12:15 pm

^ can't time the market.

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Re: Personal Finance 101 for Young Lawyers

Postby minnbills » Thu Aug 16, 2018 12:23 pm

Yugihoe wrote:^ can't time the market.


I just don't understand this sentiment. The market's been on a tear for almost 10 years now. What's wrong with wanting to protect your gains by moving your assets into other investments?

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Re: Personal Finance 101 for Young Lawyers

Postby Anonymous User » Thu Aug 16, 2018 1:50 pm

minnbills wrote:
Yugihoe wrote:^ can't time the market.


I just don't understand this sentiment. The market's been on a tear for almost 10 years now. What's wrong with wanting to protect your gains by moving your assets into other investments?


Because someone could have thought the same thing at year 8 out of the 10 years you mentioned and missed out on two years of crazy growth. Then when the market seemingly began to "correct" this january, they could have then decided it was time to jump back in. What if it goes down another 20% after that? Maybe if you had gained 30% over the last two years when sitting out of the market, you would still come out ahead etc.

If you're pulling out to buy a house or use the money that's one thing. If you're just holding it in cash for 2-3% without an investment purpose that's a very different thing.

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Re: Personal Finance 101 for Young Lawyers

Postby minnbills » Thu Aug 16, 2018 1:53 pm

Anonymous User wrote:. If you're just holding it in cash for 2-3% without an investment purpose that's a very different thing.


The above posters are saying they're looking for safer investments to park their cash...



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