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4 Years in Biglaw = $100k Net Worth?

Posted: Sun Dec 02, 2012 8:30 pm
by SY129
$200k+ loans makes it impossible for sure..

Assume $100k in loans.

Then what about like $150k in loans.

Seems like $24k to $30k per year toward loans. And then getting through year 4 is crucial because of the pay raise, and you can kill all or most of the remaining loans. And then you can build some good savings right?

Is it doable by year 4? (or year 5?)

In general, is hitting close to or around $100k in total assets by around age 30-32 realistic?

Re: 4 Years in Biglaw = $100k Net Worth?

Posted: Sun Dec 02, 2012 8:35 pm
by sinfiery
Interest rate = 4.5%
After tax salary = 105k
# of periods = 4

Present Value: $376,690.20


Subtract the PV of the following information:

After tax salary you will give up to goto LS:
Interest rate = 4.5
# of periods = 4


http://www.investopedia.com/calculator/ ... z2DwbvsiRR



If 376k - opportunity cost > loan amount, it is financially worth it if the only thing you get from your JD is 4 years of big law

(You could factor in WE adding to future salary payments but then we get way too personal so do it on your own)

(Once you realize the initial investment is worth it, you add on factors such as interest rate, probability of reward, etc.)

Re: 4 Years in Biglaw = $100k Net Worth?

Posted: Sun Dec 02, 2012 8:42 pm
by dingbat
SY129 wrote:$200k+ loans makes it impossible for sure..

Assume $100k in loans.

Then what about like $150k in loans.

Seems like $24k to $30k per year toward loans. And then getting through year 4 is crucial because of the pay raise, and you can kill all or most of the remaining loans. And then you can build some good savings right?

Is it doable by year 4? (or year 5?)

In general, is hitting close to or around $100k in total assets by around age 30-32 realistic?

It's doable, but it requires discipline. You would need to pay half your after-tax salary toward your loans the first year, and all of your raises thereafter. With $150k in loans, your annual interest will be about $12k, give or take, in your first year (assuming no bonus), so if you pay $42k down, you're left with $120k. Let's round off and say the end of second year you're down to $85k, by the end of year 3 closer to $35k in debt and by the next year you could have a positive net worth of approximately $25k. By the end of year 5, you can be at $100k net worth.
However, this uses very rough back-of-the-envelope math and assumes:
1) no bonuses
2) you live bare-bones (not really, but let's not go too crazy)
It's hard to predict bonuses, but that can easily shave a year, maybe 2, from the timeline. On the other hand, minimalist living sucks and shit can happen increasing expenditures.

Re: 4 Years in Biglaw = $100k Net Worth?

Posted: Mon Dec 03, 2012 10:56 am
by ajax
SY129 wrote:$200k+ loans makes it impossible for sure..

Assume $100k in loans.

Then what about like $150k in loans.

Seems like $24k to $30k per year toward loans. And then getting through year 4 is crucial because of the pay raise, and you can kill all or most of the remaining loans. And then you can build some good savings right?

Is it doable by year 4? (or year 5?)

In general, is hitting close to or around $100k in total assets by around age 30-32 realistic?


Not in NYC unless you live in dangerous areas to save on rent. In some cities I could see this being possible if you are very frugal. See the following:

http://lawprofessors.typepad.com/legal_ ... power.html

Re: 4 Years in Biglaw = $100k Net Worth?

Posted: Mon Dec 03, 2012 10:59 am
by ajax
sinfiery wrote:Interest rate = 4.5%
After tax salary = 105k
# of periods = 4

Present Value: $376,690.20


Subtract the PV of the following information:

After tax salary you will give up to goto LS:
Interest rate = 4.5
# of periods = 4


http://www.investopedia.com/calculator/ ... z2DwbvsiRR



If 376k - opportunity cost > loan amount, it is financially worth it if the only thing you get from your JD is 4 years of big law

(You could factor in WE adding to future salary payments but then we get way too personal so do it on your own)

(Once you realize the initial investment is worth it, you add on factors such as interest rate, probability of reward, etc.)



This is very basic. You have assigned no value to leisure time. In biglaw, you will have very little of that. Some people do, however, get almost all of their worth from their career.

Re: 4 Years in Biglaw = $100k Net Worth?

Posted: Mon Dec 03, 2012 10:59 am
by Borg
ajax wrote:
SY129 wrote:$200k+ loans makes it impossible for sure..

Assume $100k in loans.

Then what about like $150k in loans.

Seems like $24k to $30k per year toward loans. And then getting through year 4 is crucial because of the pay raise, and you can kill all or most of the remaining loans. And then you can build some good savings right?

Is it doable by year 4? (or year 5?)

In general, is hitting close to or around $100k in total assets by around age 30-32 realistic?


Not in NYC unless you live in dangerous areas to save on rent. In some cities I could see this being possible if you are very frugal. See the following:

http://lawprofessors.typepad.com/legal_ ... power.html


How much do you think you need to save on rent? Unless you consider Park Slope with a roommate dangerous, I think it's quite manageable.

Re: 4 Years in Biglaw = $100k Net Worth?

Posted: Mon Dec 03, 2012 11:04 am
by ajax
One factor besides leisure that I think many people forget here at TLS is that taxes will be going up. Only time will tell on what income levels, but if we ever get back to 1980 levels of progressive tax (even after you account for inflation), your PV numbers will be much smaller for biglaw. This in turn makes attending a school that was risky at sticker to begin with a larger risk.

--LinkRemoved--

Re: 4 Years in Biglaw = $100k Net Worth?

Posted: Mon Dec 03, 2012 11:08 am
by francesfarmer
ajax wrote:
SY129 wrote:$200k+ loans makes it impossible for sure..

Assume $100k in loans.

Then what about like $150k in loans.

Seems like $24k to $30k per year toward loans. And then getting through year 4 is crucial because of the pay raise, and you can kill all or most of the remaining loans. And then you can build some good savings right?

Is it doable by year 4? (or year 5?)

In general, is hitting close to or around $100k in total assets by around age 30-32 realistic?


Not in NYC unless you live in dangerous areas to save on rent. In some cities I could see this being possible if you are very frugal. See the following:

http://lawprofessors.typepad.com/legal_ ... power.html

LOL dangerous areas to save on rent.

It is perfectly do-able to live in a safe area (with roommates) and pay well under $1000. Its called Brooklyn (or Queens even!).

Re: 4 Years in Biglaw = $100k Net Worth?

Posted: Mon Dec 03, 2012 11:25 am
by dingbat
francesfarmer wrote:It is perfectly do-able to live in a safe area (with roommates) and pay well under $1000. Its called Brooklyn (or Queens even!).

Or even Manhattan, if you put in the time and effort. Anywhere from the Village (east or west), midtown, UES or even UWS have the occasional sweet deal to be unearthed.
Hell, I know people who live in midtown for approximately $700 per month

Re: 4 Years in Biglaw = $100k Net Worth?

Posted: Mon Dec 03, 2012 11:30 am
by francesfarmer
dingbat wrote:
francesfarmer wrote:It is perfectly do-able to live in a safe area (with roommates) and pay well under $1000. Its called Brooklyn (or Queens even!).

Or even Manhattan, if you put in the time and effort. Anywhere from the Village (east or west), midtown, UES or even UWS have the occasional sweet deal to be unearthed.
Hell, I know people who live in midtown for approximately $700 per month

You are right, there are very occasionally sweet deals to be had. I don't understand what people think of NYC real estate, like, I've never paid more than $700 and I never would. /threadhijack

Re: 4 Years in Biglaw = $100k Net Worth?

Posted: Mon Dec 03, 2012 11:37 am
by dingbat
francesfarmer wrote:
dingbat wrote:
francesfarmer wrote:It is perfectly do-able to live in a safe area (with roommates) and pay well under $1000. Its called Brooklyn (or Queens even!).

Or even Manhattan, if you put in the time and effort. Anywhere from the Village (east or west), midtown, UES or even UWS have the occasional sweet deal to be unearthed.
Hell, I know people who live in midtown for approximately $700 per month

You are right, there are very occasionally sweet deals to be had. I don't understand what people think of NYC real estate, like, I've never paid more than $700 and I never would. /threadhijack

I've paid considerably more, but I was making sick ass money at the time and wanted to have a nice apartment to come home to (even if I was lucky to be there for even 8 hours at night)

Re: 4 Years in Biglaw = $100k Net Worth?

Posted: Mon Dec 03, 2012 11:43 am
by ajax
francesfarmer wrote:
ajax wrote:
SY129 wrote:$200k+ loans makes it impossible for sure..

Assume $100k in loans.

Then what about like $150k in loans.

Seems like $24k to $30k per year toward loans. And then getting through year 4 is crucial because of the pay raise, and you can kill all or most of the remaining loans. And then you can build some good savings right?

Is it doable by year 4? (or year 5?)

In general, is hitting close to or around $100k in total assets by around age 30-32 realistic?


Not in NYC unless you live in dangerous areas to save on rent. In some cities I could see this being possible if you are very frugal. See the following:

http://lawprofessors.typepad.com/legal_ ... power.html

LOL dangerous areas to save on rent.

It is perfectly do-able to live in a safe area (with roommates) and pay well under $1000. Its called Brooklyn (or Queens even!).


Bed Stuy is not safe.

Re: 4 Years in Biglaw = $100k Net Worth?

Posted: Mon Dec 03, 2012 11:44 am
by ajax
dingbat wrote:
francesfarmer wrote:It is perfectly do-able to live in a safe area (with roommates) and pay well under $1000. Its called Brooklyn (or Queens even!).

Or even Manhattan, if you put in the time and effort. Anywhere from the Village (east or west), midtown, UES or even UWS have the occasional sweet deal to be unearthed.
Hell, I know people who live in midtown for approximately $700 per month



HAHAHHAHAHAHHA. Sounds like a fantastic spot!

Re: 4 Years in Biglaw = $100k Net Worth?

Posted: Mon Dec 03, 2012 11:46 am
by ajax
dingbat wrote:
francesfarmer wrote:
dingbat wrote:
francesfarmer wrote:It is perfectly do-able to live in a safe area (with roommates) and pay well under $1000. Its called Brooklyn (or Queens even!).

Or even Manhattan, if you put in the time and effort. Anywhere from the Village (east or west), midtown, UES or even UWS have the occasional sweet deal to be unearthed.
Hell, I know people who live in midtown for approximately $700 per month

You are right, there are very occasionally sweet deals to be had. I don't understand what people think of NYC real estate, like, I've never paid more than $700 and I never would. /threadhijack

I've paid considerably more, but I was making sick ass money at the time and wanted to have a nice apartment to come home to (even if I was lucky to be there for even 8 hours at night)



You were making sick ass money and got into t14 but wanted to attend Fordham instead. You also won an Olympic gold correct, or was that the World Cup?

Re: 4 Years in Biglaw = $100k Net Worth?

Posted: Mon Dec 03, 2012 12:16 pm
by dingbat
ajax wrote:You were making sick ass money and got into t14 but wanted to attend Fordham instead. You also won an Olympic gold correct, or was that the World Cup?
Nope, my athleticism sucks. I know you have a serious stick up your butt, but it's still your problem not mine.
Just because I made good money doesn't mean I intend to make bad economical decisions and paying sticker is pretty hard to justify. I gave up my old job for reasons I don't feel I need to disclose to you.

Re: 4 Years in Biglaw = $100k Net Worth?

Posted: Mon Dec 03, 2012 12:47 pm
by francesfarmer
ajax wrote:
francesfarmer wrote:
ajax wrote:
SY129 wrote:$200k+ loans makes it impossible for sure..

Assume $100k in loans.

Then what about like $150k in loans.

Seems like $24k to $30k per year toward loans. And then getting through year 4 is crucial because of the pay raise, and you can kill all or most of the remaining loans. And then you can build some good savings right?

Is it doable by year 4? (or year 5?)

In general, is hitting close to or around $100k in total assets by around age 30-32 realistic?


Not in NYC unless you live in dangerous areas to save on rent. In some cities I could see this being possible if you are very frugal. See the following:

http://lawprofessors.typepad.com/legal_ ... power.html

LOL dangerous areas to save on rent.

It is perfectly do-able to live in a safe area (with roommates) and pay well under $1000. Its called Brooklyn (or Queens even!).


Bed Stuy is not safe.

I don't live in Bed Stuy.

Re: 4 Years in Biglaw = $100k Net Worth?

Posted: Mon Dec 03, 2012 12:57 pm
by dingbat
francesfarmer wrote:Bed Stuy is not safe.

I don't live in Bed Stuy.[/quote]
One of my LS classmates lives there (for considerably less than a thousand). I've gone to visit. It's nowhere near as bad as its reputation

Re: 4 Years in Biglaw = $100k Net Worth?

Posted: Mon Dec 03, 2012 1:28 pm
by ajax
dingbat wrote:
francesfarmer wrote:Bed Stuy is not safe.

I don't live in Bed Stuy.

One of my LS classmates lives there (for considerably less than a thousand). I've gone to visit. It's nowhere near as bad as its reputation[/quote]

Why do you never post links? You just say a lot, without backing anything up.

http://projects.nytimes.com/crime/homicides/map

Nowhere as bad as its rep, eh Dingbat.

http://www.nytimes.com/2011/07/02/nyreg ... -stuy.html

Also, please post some ads for the 700/person place in Midtown you referenced. I bet it's fantastic.

Re: 4 Years in Biglaw = $100k Net Worth?

Posted: Mon Dec 03, 2012 1:36 pm
by dingbat
ajax wrote:please post some ads for the 700/person place in Midtown you referenced. I bet it's fantastic.

It's a shithole. You won't find ads for it because it's a word-of-mouth type of thing - as one roommate leaves, another enters.

Edit: I haven't looked in a while; taking a minute to browse, it appears prices have gone up a lot. Even so, here are three things I found in less time than it takes to eat a slice of pizza
--LinkRemoved--
--LinkRemoved--
--LinkRemoved--

Re: 4 Years in Biglaw = $100k Net Worth?

Posted: Mon Dec 03, 2012 1:38 pm
by ajax
dingbat wrote:
ajax wrote:please post some ads for the 700/person place in Midtown you referenced. I bet it's fantastic.

It's a shithole. You won't find ads for it because it's a word-of-mouth type of thing - as one roommate leaves, another enters.

Edit: I haven't looked in a while; taking a minute to browse, it appears prices have gone up a lot. Even so, here are three things I found in less time than it takes to eat a slice of pizza
--LinkRemoved--
--LinkRemoved--
--LinkRemoved--



Oh, you haven't looked since prices were at a low the first couple years of the recession. Surprise, surprise that prices have increased since then.

Re: 4 Years in Biglaw = $100k Net Worth?

Posted: Mon Dec 03, 2012 1:40 pm
by dingbat
ajax wrote:
dingbat wrote:
ajax wrote:please post some ads for the 700/person place in Midtown you referenced. I bet it's fantastic.

It's a shithole. You won't find ads for it because it's a word-of-mouth type of thing - as one roommate leaves, another enters.

Edit: I haven't looked in a while; taking a minute to browse, it appears prices have gone up a lot. Even so, here are three things I found in less time than it takes to eat a slice of pizza
--LinkRemoved--
--LinkRemoved--
--LinkRemoved--



Oh, you haven't looked since prices were at a low the first couple years of the recession. Surprise, surprise that prices have increased since then.
I still managed to find cheap apartments. Care to admit defeat?

Re: 4 Years in Biglaw = $100k Net Worth?

Posted: Mon Dec 03, 2012 1:50 pm
by IAFG
dingbat wrote:
ajax wrote:
dingbat wrote:
ajax wrote:please post some ads for the 700/person place in Midtown you referenced. I bet it's fantastic.

It's a shithole. You won't find ads for it because it's a word-of-mouth type of thing - as one roommate leaves, another enters.

Edit: I haven't looked in a while; taking a minute to browse, it appears prices have gone up a lot. Even so, here are three things I found in less time than it takes to eat a slice of pizza
--LinkRemoved--
--LinkRemoved--
--LinkRemoved--



Oh, you haven't looked since prices were at a low the first couple years of the recession. Surprise, surprise that prices have increased since then.
I still managed to find cheap apartments. Care to admit defeat?

The first ad is awesome and the second "apartment" is beyond awesome. Manfuckinghattan, amirite

Re: 4 Years in Biglaw = $100k Net Worth?

Posted: Mon Dec 03, 2012 2:24 pm
by 09042014
IAFG wrote:
dingbat wrote:
ajax wrote:
dingbat wrote:It's a shithole. You won't find ads for it because it's a word-of-mouth type of thing - as one roommate leaves, another enters.

Edit: I haven't looked in a while; taking a minute to browse, it appears prices have gone up a lot. Even so, here are three things I found in less time than it takes to eat a slice of pizza
--LinkRemoved--
--LinkRemoved--
--LinkRemoved--



Oh, you haven't looked since prices were at a low the first couple years of the recession. Surprise, surprise that prices have increased since then.
I still managed to find cheap apartments. Care to admit defeat?

The first ad is awesome and the second "apartment" is beyond awesome. Manfuckinghattan, amirite


Just do 1000 a month for a jail cell sized room with no bathroom or kitchen.

Re: 4 Years in Biglaw = $100k Net Worth?

Posted: Mon Dec 03, 2012 5:33 pm
by ajax
dingbat wrote:
ajax wrote:
dingbat wrote:
ajax wrote:please post some ads for the 700/person place in Midtown you referenced. I bet it's fantastic.

It's a shithole. You won't find ads for it because it's a word-of-mouth type of thing - as one roommate leaves, another enters.

Edit: I haven't looked in a while; taking a minute to browse, it appears prices have gone up a lot. Even so, here are three things I found in less time than it takes to eat a slice of pizza
--LinkRemoved--
--LinkRemoved--
--LinkRemoved--



Oh, you haven't looked since prices were at a low the first couple years of the recession. Surprise, surprise that prices have increased since then.
I still managed to find cheap apartments. Care to admit defeat?



LOL. First link says it has been flagged for removal. Second is a dorm style layout with a shared bathroom. The third link you posted is this building: --LinkRemoved--, which means the craigslist poster forgot to add a zero to the end of the 395, meaning 3950 not 395. A New Yorker would have immediately realized this b/c it's a luxury building in the financial district, and it's a one bedroom. Those don't go for 395. Solid work Dingbat. Enhancing your credibility by the post.

Re: 4 Years in Biglaw = $100k Net Worth?

Posted: Mon Dec 03, 2012 6:01 pm
by francesfarmer
dingbat wrote:
ajax wrote:
dingbat wrote:
ajax wrote:please post some ads for the 700/person place in Midtown you referenced. I bet it's fantastic.

It's a shithole. You won't find ads for it because it's a word-of-mouth type of thing - as one roommate leaves, another enters.

Edit: I haven't looked in a while; taking a minute to browse, it appears prices have gone up a lot. Even so, here are three things I found in less time than it takes to eat a slice of pizza
--LinkRemoved--
--LinkRemoved--
--LinkRemoved--



Oh, you haven't looked since prices were at a low the first couple years of the recession. Surprise, surprise that prices have increased since then.
I still managed to find cheap apartments. Care to admit defeat?

Not that I want to be involved in this kerfuffle (I wouldn't live in Bed-Stuy, for the record, but it is by no means as dangerous as people think it is, and there are tons of safe places to live for cheap if you know what you're looking for), but I actually had a friend who lived in Midtown up until last year for like $650 a month. She got a word-of-mouth sublet in a rent-controlled apartment. I wouldn't live in Midtown either, but still, unicorns exist.