Money is being loaned by my parents; decision? Forum

[jjcorvino]

i mean lifestyle creep is definitely not a great thing, but OP should really ask himself why he wants to kill himself working in NYC biglaw just to live like a pauper so he can pay off his debts.

Sure he gets the satisfaction of being a "Harvard man," but who cares.

Possibly security? Knowing that OP can get a job no matter how bad they do in school is enticing.

[dabigchina]

if OP is aiming for NYC biglaw, CCN would arguably place him just as well.

[Npret]

ITT someone eats a lb of ground chicken by himself in one day. It takes my wife and me two days to eat a lb of meat. Granted, I'm not seeking gains in the gym but that seems like a lot.

My wife and I together do not eat 9 bucks of food per day. Getting a good rice cooker has saved me a ton of money. Big bags of rice are so economical when it comes to sustenance. Cook a big dinner, eat the leftovers for lunch the next day. Make your coffee at home. 300/month for two is definitely doable.

Are you seriously arguing about how much ground turkey costs a pound when this kid is looking at six figures of debt to go to Harvard? That's just absurd.

OP: if your parents will just pay for school, take the money. If it's truly a loan, then be a responsible borrower and don't take more than you need to get your goals. New York biglaw is the easiest job to get from a top school. You will be doing the same work and have the same compensation as anyone else.

You should borrow less and use your earnings for savings, investments and financial independence. People don't think about the other uses they could have with their couple of grand a month instead of repaying loans.
Maybe start thinking about what you would do with an extra $200,000 or even an extra $25,000 a year? Try to put the debt in perspective.

[Tiago Splitter]

Would be interested in seeing more budgets of people in NYC biglaw and loan repayment schedules. Is there a thread devoted to that?

This thread has grown pretty large but might be useful:

http://www.top-law-schools.com/forums/v ... 3&t=220025

[Kaziende]

Would be interested in seeing more budgets of people in NYC biglaw and loan repayment schedules. Is there a thread devoted to that?

This thread has grown pretty large but might be useful:

http://www.top-law-schools.com/forums/v ... 3&t=220025

This is great, thank you!

[pancakes3]

The $200k is a loan and needs to be paid back, interest-free or not. Also, it IS the parents' money. I'm sure the parents will find uses for $200k too.

Again, lots of people in here siding with HLS and prestige and arguing "could" OP do it. The real question is still "should" he do it.

Of all the people impacted here: parents, spouse, and OP himself, only the OP will reap the rewards of a HLS degree and even then it's 95% psychic utility and 0% dollars utility.

[waldorf]

The $200k is a loan and needs to be paid back, interest-free or not. Also, it IS the parents' money. I'm sure the parents will find uses for $200k too.

Again, lots of people in here siding with HLS and prestige and arguing "could" OP do it. The real question is still "should" he do it.

Of all the people impacted here: parents, spouse, and OP himself, only the OP will reap the rewards of a HLS degree and even then it's 95% psychic utility and 0% dollars utility.

Agree. I'd say he's way better off taking CCN or even lower T14 with a lot more scholarship money. Even interest free, that is a LOT of debt to pay back.

[lavarman84]

Go out for Sushi just twice in that month (remember: NOT a peasant) and that's like another $120.

Sorry, perhaps I am missing something, but how the hell do you spend $120 on Sushi just twice? Even If that's for two people, that is about 30$ per person each time you went.

I spend $120 on sushi by myself when I'm hungry.

[whysooseriousbiglaw]

I don't understand why you rich parents people don't take the money and start a business or invest or something

If I had access to that kind of money in a form other than student loans literally just lol at the idea of going through three years of this to be a big lawyer

This, times a billion. I'd rather become a fast food franchisee or any kind of entrepreneur.

My inlaws spent like 1.5 million on their 3 kids' education....it's completely absurd and a huge waste of money to me. You could easily invest that money and not have to work some mundane job. I guess some people have weird priorities...I frankly don't get it.

[Npret]

I don't understand why you rich parents people don't take the money and start a business or invest or something

If I had access to that kind of money in a form other than student loans literally just lol at the idea of going through three years of this to be a big lawyer

This, times a billion. I'd rather become a fast food franchisee or any kind of entrepreneur.

My inlaws spent like 1.5 million on their 3 kids' education....it's completely absurd and a huge waste of money to me. You could easily invest that money and not have to work some mundane job. I guess some people have weird priorities...I frankly don't get it.

Lack of imagination combined with some idea about prestige and status is my guess

[whysooseriousbiglaw]

I don't understand why you rich parents people don't take the money and start a business or invest or something

If I had access to that kind of money in a form other than student loans literally just lol at the idea of going through three years of this to be a big lawyer

This, times a billion. I'd rather become a fast food franchisee or any kind of entrepreneur.

My inlaws spent like 1.5 million on their 3 kids' education....it's completely absurd and a huge waste of money to me. You could easily invest that money and not have to work some mundane job. I guess some people have weird priorities...I frankly don't get it.

Lack of imagination combined with some idea about prestige and status is my guess

Yeah, due to outdated value systems. For old people our parents age, having a degree meant much higher earning power, etc. Now everyone and their mother has a college degree and a lot of people have professional degrees. While any (cheap) college degree may be a necessity, education doesn't really convey status or prestige anymore. Plus worse earning power among white collar professionals, etc makes paying a lot for school really stupid.

[Stylnator]

I don't understand why you rich parents people don't take the money and start a business or invest or something

If I had access to that kind of money in a form other than student loans literally just lol at the idea of going through three years of this to be a big lawyer

This, times a billion. I'd rather become a fast food franchisee or any kind of entrepreneur.

My inlaws spent like 1.5 million on their 3 kids' education....it's completely absurd and a huge waste of money to me. You could easily invest that money and not have to work some mundane job. I guess some people have weird priorities...I frankly don't get it.

Lack of imagination combined with some idea about prestige and status is my guess

Yeah, due to outdated value systems. For old people our parents age, having a degree meant much higher earning power, etc. Now everyone and their mother has a college degree and a lot of people have professional degrees. While any (cheap) college degree may be a necessity, education doesn't really convey status or prestige anymore. Plus worse earning power among white collar professionals, etc makes paying a lot for school really stupid.

That is a complete load of crap. Anyone in the working world values someone with a college degree over a high school degree. At the very least, higher education DOES convey some amount of prestige. You may just be misinformed with exactly how much it does if you are just surrounded with those who do have college degrees.

[Npret]

I don't understand why you rich parents people don't take the money and start a business or invest or something

If I had access to that kind of money in a form other than student loans literally just lol at the idea of going through three years of this to be a big lawyer

This, times a billion. I'd rather become a fast food franchisee or any kind of entrepreneur.

My inlaws spent like 1.5 million on their 3 kids' education....it's completely absurd and a huge waste of money to me. You could easily invest that money and not have to work some mundane job. I guess some people have weird priorities...I frankly don't get it.

Lack of imagination combined with some idea about prestige and status is my guess

Yeah, due to outdated value systems. For old people our parents age, having a degree meant much higher earning power, etc. Now everyone and their mother has a college degree and a lot of people have professional degrees. While any (cheap) college degree may be a necessity, education doesn't really convey status or prestige anymore. Plus worse earning power among white collar professionals, etc makes paying a lot for school really stupid.

That is a complete load of crap. Anyone in the working world values someone with a college degree over a high school degree. At the very least, higher education DOES convey some amount of prestige. You may just be misinformed with exactly how much it does if you are just surrounded with those who do have college degrees.

He said a college degree was a necessity.

It isn't true that anyone in the working world values a college degree over a high school degree. I know musicians and video producers (just two examples) who don't have college degrees but have skill and experience. (Oh also a choreographer.) A college degree wouldn't have helped them be in better places than they are now.

The point is that it's silly to spend this much money on a law degree to do biglaw in New York.

[Npret]

I highly recommend everyone check out r/personalfinance on reddit- you can find a lot of stories of people paying off $100k+ in law school or other student debt in an extremely short amount of time. How do they do it? Strict budgeting and avoiding lifestyle creep.

I think an important point here is that no one is saying one way is better than the other. It is entirely a matter of priorities. If you prioritize paying off your debt as quickly as possible, by making sacrifices in your apartment, meals, "fun" purchases, retirement savings, etc. you will be able to do it on a biglaw salary. But if you don't want to, because you just worked damn hard for three years and you want to spend your hard-earned money, then do so! Take the 10 years or whatever to pay off the debt! That is 100% fine!

I personally want to take the former route and get rid of my debt as fast as possible, so that I have the freedom to change jobs if I am unhappy- and so I'm not totally screwed if I lose my biglaw job. I am planning on living the same way on a $180k salary as I do now on a $43k salary until my debt is paid off. My current expenses (living in downtown DC with a roommate) are about $2000 a month (including rent, utilities, food, transportation, and fun stuff). I am confident I can live similarly and pay off close to $50k a year after law school.

How is this working with clothing and socializing at your biglaw job? What are you buying to wear to work so you look like a professional? What do you do when your colleagues go out? What do you do for entertainment?
Edit:
Oh sorry are you still in law school? Do you have a biglaw job? I thought you did because you said you wanted to be sure you weren't screwed "if you lost your biglaw job."

[katthegreat11]

I highly recommend everyone check out r/personalfinance on reddit- you can find a lot of stories of people paying off $100k+ in law school or other student debt in an extremely short amount of time. How do they do it? Strict budgeting and avoiding lifestyle creep.

I think an important point here is that no one is saying one way is better than the other. It is entirely a matter of priorities. If you prioritize paying off your debt as quickly as possible, by making sacrifices in your apartment, meals, "fun" purchases, retirement savings, etc. you will be able to do it on a biglaw salary. But if you don't want to, because you just worked damn hard for three years and you want to spend your hard-earned money, then do so! Take the 10 years or whatever to pay off the debt! That is 100% fine!

I personally want to take the former route and get rid of my debt as fast as possible, so that I have the freedom to change jobs if I am unhappy- and so I'm not totally screwed if I lose my biglaw job. I am planning on living the same way on a $180k salary as I do now on a $43k salary until my debt is paid off. My current expenses (living in downtown DC with a roommate) are about $2000 a month (including rent, utilities, food, transportation, and fun stuff). I am confident I can live similarly and pay off close to $50k a year after law school.

How is this working with clothing and socializing at your biglaw job? What are you buying to wear to work so you look like a professional? What do you do when your colleagues go out? What do you do for entertainment?
Edit:
Oh sorry are you still in law school? Do you have a biglaw job? I thought you did because you said you wanted to be sure you weren't screwed "if you lost your biglaw job."

I said "I am planning on living the same way"- not in law school nor do I have a biglaw job yet.

[Npret]

I highly recommend everyone check out r/personalfinance on reddit- you can find a lot of stories of people paying off $100k+ in law school or other student debt in an extremely short amount of time. How do they do it? Strict budgeting and avoiding lifestyle creep.

I think an important point here is that no one is saying one way is better than the other. It is entirely a matter of priorities. If you prioritize paying off your debt as quickly as possible, by making sacrifices in your apartment, meals, "fun" purchases, retirement savings, etc. you will be able to do it on a biglaw salary. But if you don't want to, because you just worked damn hard for three years and you want to spend your hard-earned money, then do so! Take the 10 years or whatever to pay off the debt! That is 100% fine!

I personally want to take the former route and get rid of my debt as fast as possible, so that I have the freedom to change jobs if I am unhappy- and so I'm not totally screwed if I lose my biglaw job. I am planning on living the same way on a $180k salary as I do now on a $43k salary until my debt is paid off. My current expenses (living in downtown DC with a roommate) are about $2000 a month (including rent, utilities, food, transportation, and fun stuff). I am confident I can live similarly and pay off close to $50k a year after law school.

How is this working with clothing and socializing at your biglaw job? What are you buying to wear to work so you look like a professional? What do you do when your colleagues go out? What do you do for entertainment?
Edit:
Oh sorry are you still in law school? Do you have a biglaw job? I thought you did because you said you wanted to be sure you weren't screwed "if you lost your biglaw job."

I said "I am planning on living the same way"- not in law school nor do I have a biglaw job yet.

Sounds like you are also planning on big law. Be careful because it isn't a sure thing. Not everyone who wants or expects biglaw is going to get it.

Just saying it may not be as easy to live on that budget as you think. You will need clothes as the very least. Of course things will be more expensive in 3-4 years as well but salaries won't be increasing, I wouldn't plan on it anyway.

[thewhalefish]

Does anyone have a good risotto recipe they can share?

[whysooseriousbiglaw]

I don't understand why you rich parents people don't take the money and start a business or invest or something

If I had access to that kind of money in a form other than student loans literally just lol at the idea of going through three years of this to be a big lawyer

This, times a billion. I'd rather become a fast food franchisee or any kind of entrepreneur.

My inlaws spent like 1.5 million on their 3 kids' education....it's completely absurd and a huge waste of money to me. You could easily invest that money and not have to work some mundane job. I guess some people have weird priorities...I frankly don't get it.

Lack of imagination combined with some idea about prestige and status is my guess

Yeah, due to outdated value systems. For old people our parents age, having a degree meant much higher earning power, etc. Now everyone and their mother has a college degree and a lot of people have professional degrees. While any (cheap) college degree may be a necessity, education doesn't really convey status or prestige anymore. Plus worse earning power among white collar professionals, etc makes paying a lot for school really stupid.

That is a complete load of crap. Anyone in the working world values someone with a college degree over a high school degree. At the very least, higher education DOES convey some amount of prestige. You may just be misinformed with exactly how much it does if you are just surrounded with those who do have college degrees.

He said a college degree was a necessity.

It isn't true that anyone in the working world values a college degree over a high school degree. I know musicians and video producers (just two examples) who don't have college degrees but have skill and experience. (Oh also a choreographer.) A college degree wouldn't have helped them be in better places than they are now.

The point is that it's silly to spend this much money on a law degree to do biglaw in New York.

Yup, thanks. My point is that while any random degree may be seen as a necessity for many jobs it doesn't mean it's a good idea to pay 200k to send your kid to a private university. You can just get a much cheaper degree. And a degree is no longer prestigious if it's a necessity....

Also, as e.g., lots of people find good paying coding jobs out of coding bootcamps. I'd hazard these boot camps have better job placement than most colleges.

[katthegreat11]

I highly recommend everyone check out r/personalfinance on reddit- you can find a lot of stories of people paying off $100k+ in law school or other student debt in an extremely short amount of time. How do they do it? Strict budgeting and avoiding lifestyle creep.

I think an important point here is that no one is saying one way is better than the other. It is entirely a matter of priorities. If you prioritize paying off your debt as quickly as possible, by making sacrifices in your apartment, meals, "fun" purchases, retirement savings, etc. you will be able to do it on a biglaw salary. But if you don't want to, because you just worked damn hard for three years and you want to spend your hard-earned money, then do so! Take the 10 years or whatever to pay off the debt! That is 100% fine!

I personally want to take the former route and get rid of my debt as fast as possible, so that I have the freedom to change jobs if I am unhappy- and so I'm not totally screwed if I lose my biglaw job. I am planning on living the same way on a $180k salary as I do now on a $43k salary until my debt is paid off. My current expenses (living in downtown DC with a roommate) are about $2000 a month (including rent, utilities, food, transportation, and fun stuff). I am confident I can live similarly and pay off close to $50k a year after law school.

How is this working with clothing and socializing at your biglaw job? What are you buying to wear to work so you look like a professional? What do you do when your colleagues go out? What do you do for entertainment?
Edit:
Oh sorry are you still in law school? Do you have a biglaw job? I thought you did because you said you wanted to be sure you weren't screwed "if you lost your biglaw job."

I said "I am planning on living the same way"- not in law school nor do I have a biglaw job yet.

Sounds like you are also planning on big law. Be careful because it isn't a sure thing. Not everyone who wants or expects biglaw is going to get it.

Just saying it may not be as easy to live on that budget as you think. You will need clothes as the very least. Of course things will be more expensive in 3-4 years as well but salaries won't be increasing, I wouldn't plan on it anyway.

I am pretty confident I will get a biglaw job. And I understand living on that budget won't be easy, that's why it's a sacrifice. I fully recognize the possibility of me not being able to stick to it, it's just something I want to strive for.

[ZVBXRPL]

Would be interested in seeing more budgets of people in NYC biglaw and loan repayment schedules. Is there a thread devoted to that?

http://www.top-law-schools.com/forums/v ... start=3125

[mvp99]

You actually/probably have to recognize the saved interest as income. The loan from your parent surpasses the irs threshold

[LotsofPrivledge]

You actually/probably have to recognize the saved interest as income. The loan from your parent surpasses the irs threshold

The money would be paid directly to the school, I would never touch it. I think my payments back to them would then count as a gift. I could pay each parent up to $14,000 a year without reporting it. So I could pay back up to $28,000 a year to them without anything being taxed. I guess that means I couldn't pay back $50,000 a year like I was saying before.

https://ttlc.intuit.com/questions/33904 ... ge-tuition

[LotsofPrivledge]

However, obviously I will pay back as quickly as possible. I don't want to drag it out and disrespect my parents generosity.

Right, which is why this is a pretty personal decision. Maybe this is one of those wink wink loans that you'll never have to actually pay back, or maybe you'll be terribly burdened by having this intra-family loan hanging over your head. But assuming the normal situation here I would recommend that anyone targeting NYC biglaw take the money at the lower T-14. At the very least play out the cycle and see how things look in a couple of months.

Thank you so much for the advice. I will definitely work to make sure that I get as much scholarship $ as possible.

[pancakes3]

your parents are making a gift to you > exemption so they'll be subject to gift tax.

one way or another, someone is getting taxed.

yet another reason to cop scholarship, which is not taxed.

edit: whether or not the money passed through your hands has nothing to do with whether it's counted as income or gift. it's the economic benefit that you receive and whether or not it was in exchange for consideration.

[CPA-->JD]

You actually/probably have to recognize the saved interest as income. The loan from your parent surpasses the irs threshold

I believe(would need to double check this) they would have to pick it up as interest income by the lender(parents here). However, if the loan is less than 100k, the interest would limited to the amount of investment income earned by the borrow(OP). See IRS pub 550.