Total Savings/Net Worth Forum

[qquincy]

I am absolutely gob-smacked at how many people have so much cash on hand. I've been basically stashing my money into VOO the past decade, and it's gone up like 100%. It makes up a significant chunk of my NW.

2009 Grad, CA Biglaw
Cash: $50k
Equity: $3m
Retirement: $1m
House: $2m

[Anonymous User]

How are you mid-levels reaching 1M NW

I think an under appreciated statistic in this thread is spouses and significant others.

Even if your partner isn't bringing in $300k+ income every year, it is someone else to share expenses with, to add savings together, to qualify you for a more expensive houses, etc.

[Joachim2017]

I am absolutely gob-smacked at how many people have so much cash on hand. I've been basically stashing my money into VOO the past decade, and it's gone up like 100%. It makes up a significant chunk of my NW.

2009 Grad, CA Biglaw
Cash: $50k
Equity: $3m
Retirement: $1m
House: $2m

That is great for you, but certainly the next decade is not going to be like the past one, and VOO (and similar ETFs) are likely not going to perform anywhere near that in the coming years. Sure, the general thinking is right, make your money work for you, but lots of circumstances can make it reasonable to have a big chunk of cash on hand, including being nervous about the market right now, and what will likely happen in the coming years.

[Definitely Not North]

That is great for you, but certainly the next decade is not going to be like the past one, and VOO (and similar ETFs) are likely not going to perform anywhere near that in the coming years. Sure, the general thinking is right, make your money work for you, but lots of circumstances can make it reasonable to have a big chunk of cash on hand, including being nervous about the market right now, and what will likely happen in the coming years.

Oh look, another insanely over-risk averse lawyer. You were probably saying this in 2018 too.

On average over the last 100+ years, you can generally expect 7% annual returns in broad equity indexes. Even if the market dips in the short term, you only lose money if you sell (which you should not do). Time in the market > Timing the market.

[Definitely Not North]

I am absolutely gob-smacked at how many people have so much cash on hand. I've been basically stashing my money into VOO the past decade, and it's gone up like 100%. It makes up a significant chunk of my NW.

2009 Grad, CA Biglaw
Cash: $50k
Equity: $3m
Retirement: $1m
House: $2m

Now this is how wealth is built -- nice work. Even if the market tanks 50% tomorrow morning, you could still probably retire that afternoon on a ~$70k annual spend.

[Anonymous User]

2013 grad. Have mostly been in-house making around $175k annually, but moving to a role in the low 300s soon. Spouse makes mid-5 figures as a teacher.

NW: 600k
30k in cash
570k in investments: 240k in retirement, 250k in market funds, 75k in stocks, 5k in crypto

Grew up poor, left law school with about 200k in debt. Happy with where things are. Mostly flabbergasted that I'm able to put more every month into a market fund than my parents made when I was growing up.

[Anonymous User]

No better way to encourage folks to comment on this than to take them to task for making financial decisions you don't agree with! I've found this thread tremendously helpful, and I hope everyone keeps commenting even if it means some of us get taken to task for our personal decisions.

I don't think anyone should be a dick about it, but some folks should be nudged to significantly reduce their cash reserves if they are sitting on anything >$25k and not saving for a home.

As the sole provider for a family, $25k is light.

[Anonymous User]

2005 grad. Working spouse who makes anywhere from 300k-500k in a given year the last half dozen years (much less before that, though she has always worked), so that has been very helpful over the years. Net worth ~$11 million. Started out with 400k in school debt between the two of us. Paid that off fairly quickly early on in our careers as I never expected to be in biglaw forever (thought I would go in-house). Fast forward to today and I am still here, but now a partner and making money that I never could have imagined. Was very poor growing up (single mother household, government assistance, etc.) so being able to flip the script for my own kids has been very motivating since I decided years ago to stick it out at the firm and shoot for partner. Looking to retire over next decade and hopefully enjoy the last ~25 years of my life. Started investing way late in my career (think I was a 6th year associate maybe?) as I never thought enough about it as it wasn't something I had any experience with growing up. Obviously that was dumb in retrospect.

$6 million in equities, retirement accounts, firm capital account
$3.5 million in equity in two homes
$1.5 million in cash due to partner draw that came in recently and yet to be invested (usually keep 200k on hand at any time).

[Anonymous User]

2005 grad. Working spouse who makes anywhere from 300k-500k in a given year the last half dozen years (much less before that, though she has always worked), so that has been very helpful over the years. Net worth ~$11 million. Started out with 400k in school debt between the two of us. Paid that off fairly quickly early on in our careers as I never expected to be in biglaw forever (thought I would go in-house). Fast forward to today and I am still here, but now a partner and making money that I never could have imagined. Was very poor growing up (single mother household, government assistance, etc.) so being able to flip the script for my own kids has been very motivating since I decided years ago to stick it out at the firm and shoot for partner. Looking to retire over next decade and hopefully enjoy the last ~25 years of my life. Started investing way late in my career (think I was a 6th year associate maybe?) as I never thought enough about it as it wasn't something I had any experience with growing up. Obviously that was dumb in retrospect.

$6 million in equities, retirement accounts, firm capital account
$3.5 million in equity in two homes
$1.5 million in cash due to partner draw that came in recently and yet to be invested (usually keep 200k on hand at any time).

Good lord... speaking as a 5th year...

[Anonymous User]

Class of 2015, started with ~200k in law school debt. Current net worth around $550k; including 200k in 401k, the rest sprinkled between cash and stocks. I rent an apartment so no home equity, but I do have a car worth maybe 15k HCOL, working spouse who makes around 100k.

Don't know if I'm really going to gun for partner (or if it's even a possibility), but I'm grateful biglaw's allowed me to pay off my debts and accumulate a nice nest egg. In any event, I'm planning on sticking around at least another few years to get up to $1mm NW

[Anonymous User]

I am absolutely gob-smacked at how many people have so much cash on hand. I've been basically stashing my money into VOO the past decade, and it's gone up like 100%. It makes up a significant chunk of my NW.

2009 Grad, CA Biglaw
Cash: $50k
Equity: $3m
Retirement: $1m
House: $2m

That is great for you, but certainly the next decade is not going to be like the past one, and VOO (and similar ETFs) are likely not going to perform anywhere near that in the coming years. Sure, the general thinking is right, make your money work for you, but lots of circumstances can make it reasonable to have a big chunk of cash on hand, including being nervous about the market right now, and what will likely happen in the coming years.

Being nervous about the short term outlook of the market isn't a reasonable excuse to hold a lot of cash, unless it's money you're planning on spending in the next couple of years (down payment or whatever), in which case it shouldn't be in the market no matter how you feel about the short term outlook. The market might not triple the next decade like it did the past one, but (a) it totally might, who knows, and (b) if it doesn half, or a third, or a fifth as well, so what?

[Anonymous User]

So this is my wife’s account. She is in law school but I come on here to see if there is any law related news she might be interested in or that would affect her and keep her up to date, interesting things, etc. While she is in school I have been studying financial intelligence, paper asset investing, real estate investing, cryptocurrency. I’ve been running periodic presentations to my co-workers including the higher ups in my clinical research organization to teach them how to invest, because it also helps me learn. I put together manuals with all the books I read so we have everything we need to know consolidated as a personal manual for when the money starts coming in. I continue to read and put materials together. I even read books just to teach her strategies on how to be a better leader so I can teach her about body language, communication skills, managerial skills. This is outside of my job as a scientist. My point here- to any unmarried lawyer- do not marry unless they are your best friend. Unless you are truly a team with defined goals. Marry someone whose strengths are your weaknesses. If you are in a relationship or married- your partner can be doing this for you too, and should, because if they do your response on this thread will also be pretty impressive in 5-10 years. And yo, if your partner isn’t grinding while your grinding, kick them to the curb. A solid marriage with a vision will make you millions.

[Anonymous User]

Public interest lawyer.
2016 grad, CCN

NW: approx. -$210,000

Assets:
Mutual Funds: $5000
Cash: $2000
Retirement: $25k (split between a TIAA and and a TSP)

Debts:
School Loans: $235k
Personal Loan: $1500
Credit Cards (cross country move expenses): $9,000
Car loan: ~$5.5k

Can't afford to buy a house, so we are renting. PSLF will kick in around 2027 to forgive that loan amount. My payments on that (starting in May) will be roughly $750+ per month, depending, so it's unlikely I will be able to amass much in the way of cash/investment funds until that is off my plate.

[Anonymous User]

2017 grad in NY big law

$110K cash (haven’t invested year-end bonus yet)
$20K in I bonds
$130K in 401(k)
$100K in brokerage account
$150K in crypto
$80K in NFTs
-$90K in refinanced student loan debt (started at $230K)
Net worth fluctuates a lot but around $500K

[Wanderingdrock]

How are you mid-levels reaching 1M NW

I think an under appreciated statistic in this thread is spouses and significant others.

Even if your partner isn't bringing in $300k+ income every year, it is someone else to share expenses with, to add savings together, to qualify you for a more expensive houses, etc.

My spouse doesn't even have a paying job but HOLY SHIT is she important to our wealth journey. We are aligned in every respect and discuss finances regularly; she takes care of our kid, saving us a ton in childcare expenses; and just by being married our taxes are much lower than if I were single. We're also able to contribute more into certain tax-advantaged vehicles, like the HSA or by both having IRAs.

[Anonymous User]

I'm the sixth year from last year who was at $850k.

Now a 7th year at about $1,175k. 2021 was a pretty extraordinary year for comp and market performance (kept net worth 93-95% in stocks). I also gave away about $20k again. Not married.

The market will be much rockier this year (it already is) but I've invested almost my whole bonus from last year already and I'll keep buying the dip. If we hit a true bear market I'll probably max stocks to 100%, cut emergency fund down to two months, and hope we all don't get fired.

[Anonymous User]

C/o 2017 in biglaw

$240k in house (down payment, not counting appreciation since then)
$50k cash (soon to be converted to mostly I-bonds, ETFs)
$50k broad market ETFs
$175k retirement account (mix between regular 401k and some mega back door Roth)
$12k Roth IRA (backdoor)
$9k HSA
Total: $536k

I hoarded cash for a down payment on a house until this summer and I'm now really regretting not getting in the market sooner. But my house has appreciated over $120k in the last six months, so at least I have that.

[Anonymous User]

For you more finance savvy folks:

Is there a certain point at which I should be looking for investment vehicles more complex or nuanced than a simple ETF like VOO, VT, or VTI? I've now, after the last bonus cycle, got around $350,000 in savings that I won't need anytime soon. I plan to keep it in VOO and forget about it until retirement. But is that too large an amount of money to just keep in a simple ETF?

I guess the thinking is that at a certain "wealth point", I need to look into more complex investment options like private credit strategies, or more pointedly, $350k is too much for an ETF like VOO and I should be looking to target-date or target-allocation funds. Any thoughts on that? I do know target-allocation funds have a much higher expense ratio, but maybe that higher cost is offset by the (in theory) higher safety/guidance of the fund managers for the next 20 or so years?

I'm fairly risk-averse and want to mostly forget about this money once I make a decision.

[Anonymous User]

30k cash
275k retirement
65k investments outside of retirement accts (index funds)
30k student loan debt

3rd yr, biglaw
other info: graduated ls with ~60k in debt

60k cash
40k i-bonds (under one year old so need to hold cash until I can ladder these as an e-fund)
1M index funds
15k student loan debt

c/o '18, in-house now
these are household numbers now, last time I divided our joint #s in half so the actual change is like 300k.

key acknowledgements: no UG loans and only 60k law school debt at graduation, my spouse makes about the same as me, no kids, parents currently working and self-supporting (so I don't have to send them money yet). All this is to say I obviously save a lot of money but I think it reflects less on my hard work or whatever and more on the opportunities I've had. Lots of people save and work hard but not everyone lucks into good educational, career, family, spouse, etc. situations that enable you to build wealth.

[Anonymous User]

I guess the thinking is that at a certain "wealth point", I need to look into more complex investment options like private credit strategies, or more pointedly, $350k is too much for an ETF like VOO and I should be looking to target-date or target-allocation funds. Any thoughts on that? I do know target-allocation funds have a much higher expense ratio, but maybe that higher cost is offset by the (in theory) higher safety/guidance of the fund managers for the next 20 or so years?

I'm fairly risk-averse and want to mostly forget about this money once I make a decision.

There is no amount of money that is too much money for a simple index portfolio.

A "wealth point" for private investments is probably some insane number like $50million+. Not only are there often minimum subscriptions of $1million+, to find a "good" private manager (one who consistently beats out the market) who isn't oversubscribed to hell is a challenge enough. They won't be openly marketing themselves.

Also, honestly, private strategies don't produce historically better returns after (insanely high) fees than just the general market. Sure, some managers blow it out of the park, but your chances of getting into those, even if you know about them, are zero as an individual without significant, significant cash.

Target-date funds are literally just sliding scales of equity/fixed income where the older you get the more they start allocating to fixed income over equity (i.e., 80/20 strategy morphs over time to 10/90 by retirement). It is just paying a manager more to do a fairly conservative risk approach for you over time. There's not a lot of magic there that you couldn't do yourself for lower expense ratios and you lose the ability to decide your own risk tolerances.

Most fund managers don't beat the market, and certainly the vast majority don't beat the market consistently over 20+ years. You could have literally tens of millions in a simple three fund index portfolio for your entire life and probably beat 85% of the managers out there over time.

[Anonymous User]

tl;dr: there's no general $ threshold above which index investing in the stock market no longer makes sense (IMO) but you may have personal reasons to prefer a different asset allocation / investment strategy

What do you mean by "you don't need it anytime soon" (how soon) and "risk averse" (would you sell if it lost 50% tomorrow and took 10 years to bounce back)?

As a lazy buy-and-hold investor, I'm all in a mix of VOO/VXUS in my taxable brokerage accounts. I hold target date funds in my retirement accounts bc I do want some bond exposure, just not in a taxable account (and I don't think the ER is too high a price for avoiding rebalancing myself).

I would see a temporary (could be years-long) downturn in the stock market as a good thing for me as I'll only be buying and not selling over the next 10+ years. My risk tolerance is high because I truly can't think of an event that would force me to sell sooner - if I lost my job, my spouse's income would more than cover our expenses forever (and vice versa); if we both lost our jobs, our emergency fund covers more than six months of expenses for us to find new ones; if we both lost our jobs and exhausted our e-fund and couldn't find new jobs, we could move in with his mom, etc.

That's not to shame you about being risk averse, but you should make an informed decision based on what this 300k means to you personally - is it something you won't have to touch for 10 years, in which case you just need a pep talk to put it all into VT and then not touch it and trust in your long-term plan even in the face of a downturn? Or do you think you will actually need some of this money in the next few years?

[Anonymous User]

tl;dr: there's no general $ threshold above which index investing in the stock market no longer makes sense (IMO) but you may have personal reasons to prefer a different asset allocation / investment strategy

What do you mean by "you don't need it anytime soon" (how soon) and "risk averse" (would you sell if it lost 50% tomorrow and took 10 years to bounce back)?

As a lazy buy-and-hold investor, I'm all in a mix of VOO/VXUS in my taxable brokerage accounts. I hold target date funds in my retirement accounts bc I do want some bond exposure, just not in a taxable account (and I don't think the ER is too high a price for avoiding rebalancing myself).

I would see a temporary (could be years-long) downturn in the stock market as a good thing for me as I'll only be buying and not selling over the next 10+ years. My risk tolerance is high because I truly can't think of an event that would force me to sell sooner - if I lost my job, my spouse's income would more than cover our expenses forever (and vice versa); if we both lost our jobs, our emergency fund covers more than six months of expenses for us to find new ones; if we both lost our jobs and exhausted our e-fund and couldn't find new jobs, we could move in with his mom, etc.

That's not to shame you about being risk averse, but you should make an informed decision based on what this 300k means to you personally - is it something you won't have to touch for 10 years, in which case you just need a pep talk to put it all into VT and then not touch it and trust in your long-term plan even in the face of a downturn? Or do you think you will actually need some of this money in the next few years?

Thanks for this. I truly do mean I would not need it for 10 years +, and would not need to sell it if it lost 50% tomorrow and took 10 years to bounce back. This is because I plan to have a safety net of around $50-60k that is separate from this $300k, and if things got bad, I could move in with family/have a decent support system.

So yeah it's really just about, am I missing something in my thought process of where to park this $300k, such as a target allocation fund or some other tool that I haven't known about in my novice investing career. Sounds like the answer is no, and that I might as well put it all in one ETF like VOO. (I have less of a grasp on "taxable" v. "tax-advantaged" or not, but I don't have the time to really understand the tax stuff and am ok with sticking to basics unless it's really something very obvious!).

Thank you for the input!

[Anonymous User]

That context is super helpful. Yeah in that case, I'd 100% stick to index ETFs.

I like VT as a single set it and forget it ETF (it holds both US and international stocks so some diversification there as compared to VOO which is US large-cap only). But reasonable minds may differ as to the particular ETF.

[Anonymous User]

Net worth: ~500K (200K in diversified ETFs, 100K in 401k, 100K in crypto; 40K cash; 30K emergency fund; 10K physical precious metal; 15K car; 10K watch collection)
No Debt
6th year Biglaw (after 2 clerkships)
Started from ~100K in law school debt

[lawstudent212]

I see a lot of people holding crypto. What crypto are you holding? Mostly Bitcoin? Also, what did you hold it in, Coinbase?