Personal Finance 101 for Young Lawyers

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Wipfelder
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Re: Personal Finance 101 for Young Lawyers

Postby Wipfelder » Sat Jan 07, 2017 12:51 pm

bruinfan10 wrote:
AVBucks4239 wrote:3. Yes, I think people congratulating others for purchasing things is extremely silly in our society. Could probably write a book just on that.

i'm with you, especially re: cars. living in LA, people take the car-as-status-symbol thing to an incredibly annoying extreme. i have a friend out here who's in debt up to his eyeballs who almost caved to his fellow associates' ribbing about his perfectly acceptable older-model american car and went to a saab dealership (ffs, of all the stupid overpriced cars to buy). i talked him off the ledge, but it blew my mind that an otherwise sharp guy would make such a completely indefensible decision based on consumerist peer pressure.


Jesus, a Saab?

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nealric
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Re: Personal Finance 101 for Young Lawyers

Postby nealric » Sat Jan 07, 2017 1:14 pm

bruinfan10 wrote:
AVBucks4239 wrote:3. Yes, I think people congratulating others for purchasing things is extremely silly in our society. Could probably write a book just on that.

i'm with you, especially re: cars. living in LA, people take the car-as-status-symbol thing to an incredibly annoying extreme. i have a friend out here who's in debt up to his eyeballs who almost caved to his fellow associates' ribbing about his perfectly acceptable older-model american car and went to a saab dealership (ffs, of all the stupid overpriced cars to buy). i talked him off the ledge, but it blew my mind that an otherwise sharp guy would make such a completely indefensible decision based on consumerist peer pressure.


When was this? Saab has been defunct since 2012.

morrissey
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Re: Personal Finance 101 for Young Lawyers

Postby morrissey » Sat Jan 07, 2017 1:37 pm

Tag

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LaLiLuLeLo
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Re: Personal Finance 101 for Young Lawyers

Postby LaLiLuLeLo » Sat Jan 07, 2017 1:42 pm

I know a dude who went out and leased a Benz while he was a summer. It inspired me to piss around in my 10 year old Corolla and ride that sonofabitch to the ground.

Wipfelder
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Re: Personal Finance 101 for Young Lawyers

Postby Wipfelder » Sat Jan 07, 2017 1:47 pm

LaLiLuLeLo wrote:I know a dude who went out and leased a Benz while he was a summer. It inspired me to piss around in my 10 year old Corolla and ride that sonofabitch to the ground.


Leasing a vehicle, to me, seems somewhere between dumb and harmful.*

*Except maybe if the payment and fees are less than 1% of your monthly take-home and you like to get a new car every year, and probably could pay cash for them anyways, but just don't want to deal with buying and selling and stuff.

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bk1
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Re: Personal Finance 101 for Young Lawyers

Postby bk1 » Sat Jan 07, 2017 2:22 pm

Is this the circlejerk to having different financial priorities than other people thread now?

Unless ya'll live like ascetic monks (which is unlikely in my experience with junior biglawyers) you have purchasing decisions that plenty of others would judge you for.

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Re: Personal Finance 101 for Young Lawyers

Postby Anonymous User » Sat Jan 07, 2017 3:56 pm

Wipfelder wrote:
LaLiLuLeLo wrote:I know a dude who went out and leased a Benz while he was a summer. It inspired me to piss around in my 10 year old Corolla and ride that sonofabitch to the ground.


Leasing a vehicle, to me, seems somewhere between dumb and harmful.*

*Except maybe if the payment and fees are less than 1% of your monthly take-home and you like to get a new car every year, and probably could pay cash for them anyways, but just don't want to deal with buying and selling and stuff.


Leasing can be fine if you're smart about it. It all depends on what you negotiate the price down to, the money factor, rebates, residual, etc. If you drive 12k miles a year or less and negotiate a good deal it can be a nice deal switching out cars every 3 years. No repair costs, lower taxes (depending on state) etc. Obviously buying is cheaper if you are keeping the car 10 years or something, but well structured leases can be not significantly more expensive and a lot less hassle or chance to get upsidedown than buying.

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Re: Personal Finance 101 for Young Lawyers

Postby Anonymous User » Sat Jan 07, 2017 4:58 pm

tag

Bluem_11
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Re: Personal Finance 101 for Young Lawyers

Postby Bluem_11 » Sat Jan 07, 2017 6:30 pm

I would like this thread to be stickied. Whether or not you agree with all of OP's tactics (I like a lot of it, not all of it), I think there's a lot of important substance being discussed here that this subforum doesn't always have. Not to mention the depth of the initial post.

Wipfelder
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Re: Personal Finance 101 for Young Lawyers

Postby Wipfelder » Sat Jan 07, 2017 7:54 pm

Anonymous User wrote:
Wipfelder wrote:
LaLiLuLeLo wrote:I know a dude who went out and leased a Benz while he was a summer. It inspired me to piss around in my 10 year old Corolla and ride that sonofabitch to the ground.


Leasing a vehicle, to me, seems somewhere between dumb and harmful.*

*Except maybe if the payment and fees are less than 1% of your monthly take-home and you like to get a new car every year, and probably could pay cash for them anyways, but just don't want to deal with buying and selling and stuff.


Leasing can be fine if you're smart about it. It all depends on what you negotiate the price down to, the money factor, rebates, residual, etc. If you drive 12k miles a year or less and negotiate a good deal it can be a nice deal switching out cars every 3 years. No repair costs, lower taxes (depending on state) etc. Obviously buying is cheaper if you are keeping the car 10 years or something, but well structured leases can be not significantly more expensive and a lot less hassle or chance to get upsidedown than buying.


It can be tough to keep under the mileage limit, and the penalties on going over are amazingly bad. Obviously, getting a loan on a car and being upside down is bad too.

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los blancos
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Re: Personal Finance 101 for Young Lawyers

Postby los blancos » Sat Jan 07, 2017 8:59 pm

nealric wrote:Good post. For those with similar saving and investment. philosophies, boggleheads.com is a pretty good community to discuss personal finance.


Yeah this. And I've spent a lot of time recently trying to figure out what to read, and this book popped up as one of the best ones both here on TLS and on Boggleheads:

https://www.amazon.com/Only-Investment- ... b_title_bk

I'm about 1/3 of the way in and it's a good read.

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kalvano
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Re: Personal Finance 101 for Young Lawyers

Postby kalvano » Sat Jan 07, 2017 10:51 pm

AVBucks4239 wrote:
star fox wrote:Good post. Do you have kids/are you planning?


Yes. Hoping for two kids after we get married this May. Plan is to keep bumping up HSA contributions so as much medical care as possible is pre-tax. Fiance also hates clutter and plans for the baby showers to be gender neutral and loaded with "need" stuff rather than wants.


Once you have kids, I highly suggest utilizing a 529 plan for college savings. If you live in a state with a state income tax, you can reduce your tax burden by quite a bit by utilizing the 529 for your state.

Of course, if your state's 529 plan sucks, then the lower returns may not be worth the tax trade-off.

Also, you're going to have a rough go of it if you hate clutter with two kids.

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Re: Personal Finance 101 for Young Lawyers

Postby Wipfelder » Sun Jan 08, 2017 12:43 am

kalvano wrote:
AVBucks4239 wrote:
star fox wrote:Good post. Do you have kids/are you planning?


Yes. Hoping for two kids after we get married this May. Plan is to keep bumping up HSA contributions so as much medical care as possible is pre-tax. Fiance also hates clutter and plans for the baby showers to be gender neutral and loaded with "need" stuff rather than wants.


Once you have kids, I highly suggest utilizing a 529 plan for college savings. If you live in a state with a state income tax, you can reduce your tax burden by quite a bit by utilizing the 529 for your state.

Of course, if your state's 529 plan sucks, then the lower returns may not be worth the tax trade-off.

Also, you're going to have a rough go of it if you hate clutter with two kids.


I think you can use any states 529/ESA. IL has a good one, that I use for my kids, I think it's one of the best.

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kalvano
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Re: Personal Finance 101 for Young Lawyers

Postby kalvano » Sun Jan 08, 2017 1:14 am

Wipfelder wrote:
kalvano wrote:
AVBucks4239 wrote:
star fox wrote:Good post. Do you have kids/are you planning?


Yes. Hoping for two kids after we get married this May. Plan is to keep bumping up HSA contributions so as much medical care as possible is pre-tax. Fiance also hates clutter and plans for the baby showers to be gender neutral and loaded with "need" stuff rather than wants.


Once you have kids, I highly suggest utilizing a 529 plan for college savings. If you live in a state with a state income tax, you can reduce your tax burden by quite a bit by utilizing the 529 for your state.

Of course, if your state's 529 plan sucks, then the lower returns may not be worth the tax trade-off.

Also, you're going to have a rough go of it if you hate clutter with two kids.


I think you can use any states 529/ESA. IL has a good one, that I use for my kids, I think it's one of the best.


You can use any state's 529. However, if your state has a state income tax, you can often deduct contributions to the 529 if you use your state's plan. For instance, I'm in Texas and have no state income tax (which is good because our 529 ssuuuuccckkkksss), so I use NY's 529 plan (great returns). If I lived in NY, I could deduct up to $10,000 per year if I contributed $10,000 from state income taxes (I believe - I tend to gloss over it, but that sounds about right).

If you don't have to worry about taxes, or your state's 529 is so bad that it isn't worth it, NY and Utah have some of the best plans, with ultra low fees.

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DCfilterDC
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Re: Personal Finance 101 for Young Lawyers

Postby DCfilterDC » Sun Jan 08, 2017 1:19 am

Can anyone recommend a good tax liability estimator site/calculator? Preferably that includes state income tax

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kalvano
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Re: Personal Finance 101 for Young Lawyers

Postby kalvano » Sun Jan 08, 2017 1:22 am

DCfilterDC wrote:Can anyone recommend a good tax liability estimator site/calculator? Preferably that includes state income tax


For calculating income taxes? I like TaxCaster from TurboTax. It's free.

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DCfilterDC
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Re: Personal Finance 101 for Young Lawyers

Postby DCfilterDC » Sun Jan 08, 2017 1:23 am

kalvano wrote:
DCfilterDC wrote:Can anyone recommend a good tax liability estimator site/calculator? Preferably that includes state income tax


For calculating income taxes? I like TaxCaster from TurboTax. It's free.


Yeah just for income taxes. Thanks!

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bruinfan10
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Re: Personal Finance 101 for Young Lawyers

Postby bruinfan10 » Sun Jan 08, 2017 4:13 pm

bk1 wrote:Is this the circlejerk to having different financial priorities than other people thread now?

Unless ya'll live like ascetic monks (which is unlikely in my experience with junior biglawyers) you have purchasing decisions that plenty of others would judge you for.

that's fair. i'm sure some people derive a ton of pleasure from their cars. didn't mean to touch a nerve.

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LaLiLuLeLo
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Re: Personal Finance 101 for Young Lawyers

Postby LaLiLuLeLo » Sun Jan 08, 2017 6:53 pm

bruinfan10 wrote:
bk1 wrote:Is this the circlejerk to having different financial priorities than other people thread now?

Unless ya'll live like ascetic monks (which is unlikely in my experience with junior biglawyers) you have purchasing decisions that plenty of others would judge you for.

that's fair. i'm sure some people derive a ton of pleasure from their cars. didn't mean to touch a nerve.


Yeah, I guess my point wasn't to shit on cars. It's a fair point; I spend lots of money on things people would probably say is stupid. Hell, I'm aggressively paying down low-interest rate student loans and I *know* that's stupid. But I think there should be some warnings on financial pitfalls/keeping up with the Joneses. In my example, leasing an expensive luxury car when you're just a summer is objectively stupid and a poor financial decision. But allocating money to a nice car that you desire when you can afford it is understandable.

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nealric
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Re: Personal Finance 101 for Young Lawyers

Postby nealric » Tue Jan 10, 2017 11:00 am

kalvano wrote:
AVBucks4239 wrote:
star fox wrote:Good post. Do you have kids/are you planning?


Yes. Hoping for two kids after we get married this May. Plan is to keep bumping up HSA contributions so as much medical care as possible is pre-tax. Fiance also hates clutter and plans for the baby showers to be gender neutral and loaded with "need" stuff rather than wants.


Once you have kids, I highly suggest utilizing a 529 plan for college savings. If you live in a state with a state income tax, you can reduce your tax burden by quite a bit by utilizing the 529 for your state.

Of course, if your state's 529 plan sucks, then the lower returns may not be worth the tax trade-off.

Also, you're going to have a rough go of it if you hate clutter with two kids.


Note on 529: unless you are getting a substantial state tax deduction (varies by state), you should max out your retirement accounts before you touch a 529. Retirement accounts can be used to pay for college and don't count against you in financial aid calculations.

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zot1
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Re: Personal Finance 101 for Young Lawyers

Postby zot1 » Tue Jan 10, 2017 11:40 am

LaLiLuLeLo wrote:
bruinfan10 wrote:
bk1 wrote:Is this the circlejerk to having different financial priorities than other people thread now?

Unless ya'll live like ascetic monks (which is unlikely in my experience with junior biglawyers) you have purchasing decisions that plenty of others would judge you for.

that's fair. i'm sure some people derive a ton of pleasure from their cars. didn't mean to touch a nerve.


Yeah, I guess my point wasn't to shit on cars. It's a fair point; I spend lots of money on things people would probably say is stupid. Hell, I'm aggressively paying down low-interest rate student loans and I *know* that's stupid. But I think there should be some warnings on financial pitfalls/keeping up with the Joneses. In my example, leasing an expensive luxury car when you're just a summer is objectively stupid and a poor financial decision. But allocating money to a nice car that you desire when you can afford it is understandable.


It's hard to tell someone who has been waiting for a while to have something that they can't have it just yet. Is it smart? Fuck no. But neither is going to law school with a bunch of debt and people still do that.

Wipfelder
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Re: Personal Finance 101 for Young Lawyers

Postby Wipfelder » Tue Jan 10, 2017 12:39 pm

nealric wrote:
kalvano wrote:
AVBucks4239 wrote:
star fox wrote:Good post. Do you have kids/are you planning?


Yes. Hoping for two kids after we get married this May. Plan is to keep bumping up HSA contributions so as much medical care as possible is pre-tax. Fiance also hates clutter and plans for the baby showers to be gender neutral and loaded with "need" stuff rather than wants.


Once you have kids, I highly suggest utilizing a 529 plan for college savings. If you live in a state with a state income tax, you can reduce your tax burden by quite a bit by utilizing the 529 for your state.

Of course, if your state's 529 plan sucks, then the lower returns may not be worth the tax trade-off.

Also, you're going to have a rough go of it if you hate clutter with two kids.


Note on 529: unless you are getting a substantial state tax deduction (varies by state), you should max out your retirement accounts before you touch a 529. Retirement accounts can be used to pay for college and don't count against you in financial aid calculations.


My understanding is that 529's don't either, if they are not in your name.

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nealric
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Re: Personal Finance 101 for Young Lawyers

Postby nealric » Tue Jan 10, 2017 4:59 pm

Wipfelder wrote:
nealric wrote:
kalvano wrote:
AVBucks4239 wrote:
star fox wrote:Good post. Do you have kids/are you planning?


Yes. Hoping for two kids after we get married this May. Plan is to keep bumping up HSA contributions so as much medical care as possible is pre-tax. Fiance also hates clutter and plans for the baby showers to be gender neutral and loaded with "need" stuff rather than wants.


Once you have kids, I highly suggest utilizing a 529 plan for college savings. If you live in a state with a state income tax, you can reduce your tax burden by quite a bit by utilizing the 529 for your state.

Of course, if your state's 529 plan sucks, then the lower returns may not be worth the tax trade-off.

Also, you're going to have a rough go of it if you hate clutter with two kids.


Note on 529: unless you are getting a substantial state tax deduction (varies by state), you should max out your retirement accounts before you touch a 529. Retirement accounts can be used to pay for college and don't count against you in financial aid calculations.



My understanding is that 529's don't either, if they are not in your name.


Yeah, if Grandpa contributes. If you are the owner of the account and your kid is the beneficiary, they count. You probably want to be the owner of the account because you can withdraw in an emergency and only pay penalty on the gain (not your contributions). Besides, there's no real additional advantage of having a 529 over a Roth or 401k if those aren't maxed out. Just more complication to worry about.

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Tiago Splitter
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Re: Personal Finance 101 for Young Lawyers

Postby Tiago Splitter » Tue Jan 10, 2017 5:11 pm

You can't withdraw from a 401k for higher education expenses. Even if they let you you'll have to pay a penalty on the distribution. If you separate from service or otherwise can take the money out you can roll to an IRA for the penalty exception, but you'll still owe taxes on any distribution from there.

Not that I disagree with the philosophy of 401k before 529; if you aren't funded for retirement yet let the kids handle their educations themselves.

Wipfelder
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Re: Personal Finance 101 for Young Lawyers

Postby Wipfelder » Tue Jan 10, 2017 6:47 pm

Tiago Splitter wrote:You can't withdraw from a 401k for higher education expenses. Even if they let you you'll have to pay a penalty on the distribution. If you separate from service or otherwise can take the money out you can roll to an IRA for the penalty exception, but you'll still owe taxes on any distribution from there.

Not that I disagree with the philosophy of 401k before 529; if you aren't funded for retirement yet let the kids handle their educations themselves.


But it's all basically moot if you've got enough money to cover the kids expenses for school right? Like how many big-law lawyers' kids get significant financial aid that isn't loans?




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