Net Worth to leave Big Law

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Net Worth to leave Big Law

Postby Anonymous User » Mon Jul 31, 2017 12:28 pm

How much would your net worth have to be to feel financially comfortable to leave biglaw and head to a lesser paying job? 4th year NYC associate here. I was thinking student loans paid off and ~250k in assets before I felt comfortable leaving.

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Re: Net Worth to leave Big Law

Postby Anonymous User » Mon Jul 31, 2017 12:38 pm

I'm at zero net worth and I'd be fine leaving right now ($120,000 debt and $120,000 cash/investments + $55,000 401K).

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OutCold

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Re: Net Worth to leave Big Law

Postby OutCold » Mon Jul 31, 2017 12:42 pm

Enough for a down payment on a home wherever you will be living post-firm.

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Re: Net Worth to leave Big Law

Postby SmokeytheBear » Mon Jul 31, 2017 12:58 pm

It all depends on what you want to do and where you want to live, so there is really no good answer for this that will apply across the board aside from debt free + [whatever cash you'll need]

If you're going to stay in NYC and maintain your lifestyle, likely more cash than if you're going to move to Whitefish Montana and be a fly fishing guide.

The more that I think about it, you might not want to leave debt free. If some of your debt is old consolidated loans from undergrad that are sub 2%--ride those into the sunset.

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Re: Net Worth to leave Big Law

Postby dixiecupdrinking » Mon Jul 31, 2017 1:45 pm

From experience, the answer is always "around 100k more than you currently have." At some point you have to just pull the trigger but I don't think it will ever really feel "comfortable" to take the pay cut from, say, mid-level associate to a government job.

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Re: Net Worth to leave Big Law

Postby Anonymous User » Mon Jul 31, 2017 3:39 pm

dixiecupdrinking wrote:From experience, the answer is always "around 100k more than you currently have." At some point you have to just pull the trigger but I don't think it will ever really feel "comfortable" to take the pay cut from, say, mid-level associate to a government job.


TITCR

You will never, until you last 10 years as a equity partner, have enough to just walk away. Life is expensive, you would need about 5m in current savings to live for the next 50 years and lawyers, doing what we do, generally don't make that. In saying that, I would say 500K would make me feel okay to walk but b/c are comp is so lockstep I can tell you to the month when I would hit that number (if all stays the same and firm doesn't boot me).

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Re: Net Worth to leave Big Law

Postby nealric » Mon Jul 31, 2017 5:25 pm

Anonymous User wrote:How much would your net worth have to be to feel financially comfortable to leave biglaw and head to a lesser paying job? 4th year NYC associate here. I was thinking student loans paid off and ~250k in assets before I felt comfortable leaving.


It all depends on what you are leaving for. I left at about zero net worth. The new job had a lower base, but all-in wasn't really less (and more after-tax). I wouldn't have felt comfortable leaving for a job paying $30k. There's no single number.

Trying to just save up enough to go retire on a beach for the rest of your life in your 30s is unrealistic. If that's your goal, you should leave biglaw tomorrow and do something with more potential upside.

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Re: Net Worth to leave Big Law

Postby Anonymous User » Mon Jul 31, 2017 6:11 pm

nealric wrote:
Anonymous User wrote:How much would your net worth have to be to feel financially comfortable to leave biglaw and head to a lesser paying job? 4th year NYC associate here. I was thinking student loans paid off and ~250k in assets before I felt comfortable leaving.


It all depends on what you are leaving for. I left at about zero net worth. The new job had a lower base, but all-in wasn't really less (and more after-tax). I wouldn't have felt comfortable leaving for a job paying $30k. There's no single number.

Trying to just save up enough to go retire on a beach for the rest of your life in your 30s is unrealistic. If that's your goal, you should leave biglaw tomorrow and do something with more potential upside.


Suppose the idea would be to leave when loans are paid off and you have a sizable cushion such that you could make a lifestyle move, take a pay cut and still live comfortably.

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Re: Net Worth to leave Big Law

Postby v5junior » Mon Jul 31, 2017 7:31 pm

What does live comfortably mean to you?

Do you want to live in a big city? Have kids? If so, how many? Do you like to travel? How big/nice do you want your house or apartment to be? Are you okay commuting to work and living in a less trendy neighborhood or in the suburbs to save money? Do you like to eat out a lot? What does your family's financial situation look like? Could you rely on them in the event of emergency? And on and on and on.....

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Re: Net Worth to leave Big Law

Postby dixiecupdrinking » Mon Jul 31, 2017 9:03 pm

v5junior wrote:What does live comfortably mean to you?

Do you want to live in a big city? Have kids? If so, how many? Do you like to travel? How big/nice do you want your house or apartment to be? Are you okay commuting to work and living in a less trendy neighborhood or in the suburbs to save money? Do you like to eat out a lot? What does your family's financial situation look like? Could you rely on them in the event of emergency? And on and on and on.....

Right. This isn't a question about biglaw, it's a question about your circumstances and what you want out of life.

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Re: Net Worth to leave Big Law

Postby Anonymous User » Tue Aug 01, 2017 10:18 am

v5junior wrote:What does live comfortably mean to you?

Do you want to live in a big city? Have kids? If so, how many? Do you like to travel? How big/nice do you want your house or apartment to be? Are you okay commuting to work and living in a less trendy neighborhood or in the suburbs to save money? Do you like to eat out a lot? What does your family's financial situation look like? Could you rely on them in the event of emergency? And on and on and on.....


Live comfortably meaning be able to take a ~30-50% paycut from biglaw and still not dip into principal savings, plus save a bit each year. Assume 1 kid, not living in big city but on east coast, half hour commute, moderate vacations and eating out. Trying to create a somewhat "average" hypothetical here, not for me specifically, but just to see the mindset of whether most associates have a number in mind that they want to reach before leaving, and if so, what that would be for the above situation or a similar one. I think 250k saved up sounds about right.

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Re: Net Worth to leave Big Law

Postby BlueParrot » Tue Aug 01, 2017 12:59 pm

Once my loans are finally paid off I would be fine with leaving big law right then. Hoping to stick around for another year or so after that to buildup some savings though. No kids or spouse, so I'm not as worried about having savings as others might be. I figure worst case scenario I can work at Taco Bell and live in some unlucky family member's basement (until they kill me).

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Re: Net Worth to leave Big Law

Postby Anonymous User » Tue Aug 01, 2017 7:47 pm

~$1 million until we both leave (hopefully).

My SO and I both work biglaw in TX at firms that pay roughly market (less but not by that much). She graduated with no loans and has been saving a substantial amount every month. I have some debt left over that will be paid out next year, but will also be saving a substantial amount after. We both probably have another ~4-5 years left, maybe more if we lateral and get extra time.

Neither of us want kids,don't need to buy a house right anytime soon (2 bedroom townhouse rent not that bad), and we live comfortably on what we have left over.

We don't need that much money to leave at all. We could leave sooner. It's totally an artificial goal, but I found it's nice to feel like you are striving towards something.

Obviously # goals change based on your location and COL. I would probably not be comfortable living biglaw in NYC without having at least enough cash to float for 6 months without a job.

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Re: Net Worth to leave Big Law

Postby elendinel » Tue Aug 01, 2017 11:21 pm

I left as soon as I paid off my loans. Basically restarted my career; SO and I will have total income (before taxes/expenses/etc.) of about $100k in SF/NYC, which is enough for two of us.

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Re: Net Worth to leave Big Law

Postby smokeylarue » Tue Aug 01, 2017 11:44 pm

elendinel wrote:I left as soon as I paid off my loans. Basically restarted my career; SO and I will have total income (before taxes/expenses/etc.) of about $100k in SF/NYC, which is enough for two of us.


How is $100k BEFORE taxes enough in SF/NYC? Rent and eating ramen would basically eat up your whole salary.

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Re: Net Worth to leave Big Law

Postby elendinel » Tue Aug 01, 2017 11:56 pm

smokeylarue wrote:
elendinel wrote:I left as soon as I paid off my loans. Basically restarted my career; SO and I will have total income (before taxes/expenses/etc.) of about $100k in SF/NYC, which is enough for two of us.


How is $100k BEFORE taxes enough in SF/NYC? Rent and eating ramen would basically eat up your whole salary.


Fun fact: there are people in both these cities that live on much less than $100k and manage to have homes and eat more than ramen. :lol:

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Re: Net Worth to leave Big Law

Postby lapolicia » Wed Aug 02, 2017 12:37 am

elendinel wrote:
smokeylarue wrote:
elendinel wrote:I left as soon as I paid off my loans. Basically restarted my career; SO and I will have total income (before taxes/expenses/etc.) of about $100k in SF/NYC, which is enough for two of us.


How is $100k BEFORE taxes enough in SF/NYC? Rent and eating ramen would basically eat up your whole salary.


Fun fact: there are people in both these cities that live on much less than $100k and manage to have homes and eat more than ramen. :lol:


Totally doable in SF on 100k if you don't have loans, you'd just have to live in a one bedroom in the Central or Outer Sunset/Richmond and have a 35-50 minute commute to work. You'd be able to eat perfectly fine too.

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Re: Net Worth to leave Big Law

Postby Anonymous User » Wed Aug 02, 2017 5:16 pm

BlueParrot wrote:Once my loans are finally paid off I would be fine with leaving big law right then. Hoping to stick around for another year or so after that to buildup some savings though. No kids or spouse, so I'm not as worried about having savings as others might be. I figure worst case scenario I can work at Taco Bell and live in some unlucky family member's basement (until they kill me).


I think (ideally) the idea here is not at what point could you possibly leave and not take living in a family member's basement off the table (because, obviously, any of us can leave at any time, regardless of debt levels, and find somewhere to live). The idea is more, at what point can you leave, without entirely retooling or changing careers or whatnot, and use the money you have saved from biglaw to either (i) generate enough passive income for yourself in addition to your new salary to live a comfortable life or (ii) be a cushion that you could dip into (but by no means deplete) when necessary so as to create a comfortable situation for you and your family.

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Re: Net Worth to leave Big Law

Postby jd20132013 » Thu Aug 03, 2017 12:28 am

"obviously, any of us can leave at any time, regardless of debt levels, and find somewhere to live). " eh. Ok.

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Re: Net Worth to leave Big Law

Postby Barrred » Thu Aug 03, 2017 12:44 am

lapolicia wrote:
elendinel wrote:
smokeylarue wrote:
elendinel wrote:I left as soon as I paid off my loans. Basically restarted my career; SO and I will have total income (before taxes/expenses/etc.) of about $100k in SF/NYC, which is enough for two of us.


How is $100k BEFORE taxes enough in SF/NYC? Rent and eating ramen would basically eat up your whole salary.


Fun fact: there are people in both these cities that live on much less than $100k and manage to have homes and eat more than ramen. :lol:


Totally doable in SF on 100k if you don't have loans, you'd just have to live in a one bedroom in the Central or Outer Sunset/Richmond and have a 35-50 minute commute to work. You'd be able to eat perfectly fine too.


According to HUD, if you live in SF with a wife and 2 kids and make less than $105k/year you are considered "low income" and therefore are eligible to live in public housing projects or get Section 8 vouchers, so theres that. (I wish I were joking).

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Re: Net Worth to leave Big Law

Postby lapolicia » Thu Aug 03, 2017 1:12 am

Barrred wrote:
lapolicia wrote:
elendinel wrote:
smokeylarue wrote:
elendinel wrote:I left as soon as I paid off my loans. Basically restarted my career; SO and I will have total income (before taxes/expenses/etc.) of about $100k in SF/NYC, which is enough for two of us.


How is $100k BEFORE taxes enough in SF/NYC? Rent and eating ramen would basically eat up your whole salary.


Fun fact: there are people in both these cities that live on much less than $100k and manage to have homes and eat more than ramen. :lol:


Totally doable in SF on 100k if you don't have loans, you'd just have to live in a one bedroom in the Central or Outer Sunset/Richmond and have a 35-50 minute commute to work. You'd be able to eat perfectly fine too.


According to HUD, if you live in SF with a wife and 2 kids and make less than $105k/year you are considered "low income" and therefore are eligible to live in public housing projects or get Section 8 vouchers, so theres that. (I wish I were joking).


That's unfortunately accurate from my experience. If you have kids, you will not be able to get by on anything less than around 150k a year family income and still live in the city unless you have some financial help, and even that's not a very high quality of life. However, most people with kids who have a family income in that range will live in the inner or more likely outer suburbs, and have a decent quality of life. The sacrifice would be the terrible commute.

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Re: Net Worth to leave Big Law

Postby bruinfan10 » Thu Aug 03, 2017 1:13 am

Barrred wrote:
lapolicia wrote:
elendinel wrote:
smokeylarue wrote:
elendinel wrote:I left as soon as I paid off my loans. Basically restarted my career; SO and I will have total income (before taxes/expenses/etc.) of about $100k in SF/NYC, which is enough for two of us.


How is $100k BEFORE taxes enough in SF/NYC? Rent and eating ramen would basically eat up your whole salary.


Fun fact: there are people in both these cities that live on much less than $100k and manage to have homes and eat more than ramen. :lol:


Totally doable in SF on 100k if you don't have loans, you'd just have to live in a one bedroom in the Central or Outer Sunset/Richmond and have a 35-50 minute commute to work. You'd be able to eat perfectly fine too.


According to HUD, if you live in SF with a wife and 2 kids and make less than $105k/year you are considered "low income" and therefore are eligible to live in public housing projects or get Section 8 vouchers, so theres that. (I wish I were joking).

yeah. good luck with that. sf is the worst.

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Re: Net Worth to leave Big Law

Postby elendinel » Thu Aug 03, 2017 10:47 am

Barrred wrote:
lapolicia wrote:
elendinel wrote:
smokeylarue wrote:
elendinel wrote:I left as soon as I paid off my loans. Basically restarted my career; SO and I will have total income (before taxes/expenses/etc.) of about $100k in SF/NYC, which is enough for two of us.


How is $100k BEFORE taxes enough in SF/NYC? Rent and eating ramen would basically eat up your whole salary.


Fun fact: there are people in both these cities that live on much less than $100k and manage to have homes and eat more than ramen. :lol:


Totally doable in SF on 100k if you don't have loans, you'd just have to live in a one bedroom in the Central or Outer Sunset/Richmond and have a 35-50 minute commute to work. You'd be able to eat perfectly fine too.


According to HUD, if you live in SF with a wife and 2 kids and make less than $105k/year you are considered "low income" and therefore are eligible to live in public housing projects or get Section 8 vouchers, so theres that. (I wish I were joking).


I would freely admit that if I wanted 2+ kids I'd want another $40k+ on top of what we're earning now. For 2 people $100k is plenty, though.

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Re: Net Worth to leave Big Law

Postby yost » Thu Aug 03, 2017 11:32 am

Anonymous User wrote:
dixiecupdrinking wrote:From experience, the answer is always "around 100k more than you currently have." At some point you have to just pull the trigger but I don't think it will ever really feel "comfortable" to take the pay cut from, say, mid-level associate to a government job.


TITCR

You will never, until you last 10 years as a equity partner, have enough to just walk away. Life is expensive, you would need about 5m in current savings to live for the next 50 years and lawyers, doing what we do, generally don't make that. In saying that, I would say 500K would make me feel okay to walk but b/c are comp is so lockstep I can tell you to the month when I would hit that number (if all stays the same and firm doesn't boot me).


5 million? Not unless you're spending upwards of 200K per year. Even if you spend 150K per year (3% withdrawal rate), you would likely never deplete your initial balance.

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Re: Net Worth to leave Big Law

Postby nealric » Thu Aug 03, 2017 3:27 pm

yost wrote:
Anonymous User wrote:
dixiecupdrinking wrote:From experience, the answer is always "around 100k more than you currently have." At some point you have to just pull the trigger but I don't think it will ever really feel "comfortable" to take the pay cut from, say, mid-level associate to a government job.


TITCR

You will never, until you last 10 years as a equity partner, have enough to just walk away. Life is expensive, you would need about 5m in current savings to live for the next 50 years and lawyers, doing what we do, generally don't make that. In saying that, I would say 500K would make me feel okay to walk but b/c are comp is so lockstep I can tell you to the month when I would hit that number (if all stays the same and firm doesn't boot me).


5 million? Not unless you're spending upwards of 200K per year. Even if you spend 150K per year (3% withdrawal rate), you would likely never deplete your initial balance.


If you are retiring very early, that money needs to last 50 years or more. $150k a year is a very nice sum today, but it might not be in 2067. You need to be on a trajectory where the balance is still increasing at least consistent with inflation. Inflation has been low over the last few decades, but there's no law that says double digit inflation can't happen.



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