Total Savings/Net Worth Forum

[Anonymous User]

While I 100% agree that you should invest into the market as much as you can, I have taken that approach (C/O 2020) and have actually lost money by investing (admittedly a slight growth tilt). This is not meant to discourage anyone from investing in the market, but I think people are overly critical about holding cash positions. Yes, the market has historically trended upwards, but past performance is not indicative of future performance. Additionally, not everyone can stomach the volatility that comes with a crash. I bet that there would be a lot fewer bulls in 2001 / 2008. You should only invest what you are willing to lose, and that's a subjective judgment. Not everyone is strictly happier optimizing for expected value.


Also, while investing is a big factor in building wealth, don't lose sight of the primary builder of wealth - your income. Decisions like sticking it out in biglaw instead of taking that in-house job, gunning for partner, deciding to hold off retirement for a couple years, and etc. are likely to play a much bigger factor in your overall NW.

If you are putting money in equities, you are going to have to accept a long time horizon. There is going to be huge volatility over a mere year and a half. But keep buying though your career, and there has been no historic 40-year period where you have not gotten reasonably healthy returns.

Once you have a pretty decent snowball of savings, you'd be surprised how quickly investment movements can matter more than salary for net worth. I've been investing for just over 10 years, and last year was the first year where my investment gains exceeded my household income. Of course, that isn't looking to be the case for this year (at least so far), but the more money you have in the pot, the less your salary matters to your net worth.

[Anonymous User]

While I 100% agree that you should invest into the market as much as you can, I have taken that approach (C/O 2020) and have actually lost money by investing (admittedly a slight growth tilt).

If you're C/O 2020, you don't have sufficient perspective yet to say whether you've lost money.

[Definitely Not North]

While I 100% agree that you should invest into the market as much as you can, I have taken that approach (C/O 2020) and have actually lost money by investing (admittedly a slight growth tilt).

If you're C/O 2020, you don't have sufficient perspective yet to say whether you've lost money.

[d39524s]

While I 100% agree that you should invest into the market as much as you can, I have taken that approach (C/O 2020) and have actually lost money by investing (admittedly a slight growth tilt).

If you're C/O 2020, you don't have sufficient perspective yet to say whether you've lost money.

Or to talk about "gunning for partner" being a driver of net worth....

[Anonymous User]

How feasible is it to save 1MM by 5-7th year in nyc biglaw if graduating with no debt?

[Moneytrees]

How feasible is it to save 1MM by 5-7th year in nyc biglaw if graduating with no debt?

It's theoretically feasible but in practice I wouldn't count on it. Just an incredibly expensive city and unless you want to live with roommates, the cost to live in NYC alone is going to make it an uphill climb. But it's not impossible if you really commit to it.

[Anonymous User]

How feasible is it to save 1MM by 5-7th year in nyc biglaw if graduating with no debt?

If you live cheaply and invest wisely? Not hard at all by Y7. Back of the envelope: ignoring your stub and assuming you make all bonuses, you get roughly $2.6m in total comp by Y7. Cut out 40% for taxes and you're at $1.56m. If you just save $1m in cash (forget growth from investments) you would have $560k leftover, or $80k/year to live on. Get a room in a 2+ bedroom apartment in a less than ideal location for $2k/mo and you're left with $4.6k/month spending money - totally doable if you're frugal. People live on much less. Put your $$$ in the market and it becomes even more doable.

[Anonymous User]

If you make it 7 years in biglaw in NYC with no debt and HAVEN'T saved up a million dollars, you're doing something very wrong.

[Anonymous User]

How feasible is it to save 1MM by 5-7th year in nyc biglaw if graduating with no debt?

It's theoretically feasible but in practice I wouldn't count on it. Just an incredibly expensive city and unless you want to live with roommates, the cost to live in NYC alone is going to make it an uphill climb. But it's not impossible if you really commit to it.

Key is investing and making returns. Given how the the markets/housing performed in the past 5-10 years, it probably wasn't too hard to get to 1M if you saved aggressively and invested. But who knows how next 5-10 years would turn out? markets are down this year and maybe housing prices already peaked.

[Anonymous User]

While I 100% agree that you should invest into the market as much as you can, I have taken that approach (C/O 2020) and have actually lost money by investing (admittedly a slight growth tilt). This is not meant to discourage anyone from investing in the market, but I think people are overly critical about holding cash positions. Yes, the market has historically trended upwards, but past performance is not indicative of future performance. Additionally, not everyone can stomach the volatility that comes with a crash. I bet that there would be a lot fewer bulls in 2001 / 2008. You should only invest what you are willing to lose, and that's a subjective judgment. Not everyone is strictly happier optimizing for expected value.


Also, while investing is a big factor in building wealth, don't lose sight of the primary builder of wealth - your income. Decisions like sticking it out in biglaw instead of taking that in-house job, gunning for partner, deciding to hold off retirement for a couple years, and etc. are likely to play a much bigger factor in your overall NW.

If you are putting money in equities, you are going to have to accept a long time horizon. There is going to be huge volatility over a mere year and a half. But keep buying though your career, and there has been no historic 40-year period where you have not gotten reasonably healthy returns.

Once you have a pretty decent snowball of savings, you'd be surprised how quickly investment movements can matter more than salary for net worth. I've been investing for just over 10 years, and last year was the first year where my investment gains exceeded my household income. Of course, that isn't looking to be the case for this year (at least so far), but the more money you have in the pot, the less your salary matters to your net worth.

Right, looks like investment gain would not exceed household income this year. That is to say, what your investment return is in any given year or even any 5-10 year period shouldn't matter. If you are young, income should still be the best way to grow your NW and you should not count on investments to give you consistent return year after year - anything from investment is just gravy.

[Moneytrees]

If you make it 7 years in biglaw in NYC with no debt and HAVEN'T saved up a million dollars, you're doing something very wrong.

It's not that simple. You might be fine with living in a crappy studio or with roommates for your first few years, but that's almost certainly not going to be the case over the course of 7 years. NYC has a 5% city tax just to live here that you need to consider. The cost of making life manageable and tolerable while working in Biglaw add up (living close to the office, laundry service, maid to help around your apt., decent gym, etc.). Plus you will likely have mounting expenses as you enter your 30s and potentially get married and start a family.

It's possible, but far from likely based on what I've seen in NYC.

[Sackboy]

If you make it 7 years in biglaw in NYC with no debt and HAVEN'T saved up a million dollars, you're doing something very wrong.

It's not that simple. You might be fine with living in a crappy studio or with roommates for your first few years, but that's almost certainly not going to be the case over the course of 7 years. NYC has a 5% city tax just to live here that you need to consider. The cost of making life manageable and tolerable while working in Biglaw add up (living close to the office, laundry service, maid to help around your apt., decent gym, etc.). Plus you will likely have mounting expenses as you enter your 30s and potentially get married and start a family.

It's possible, but far from likely based on what I've seen in NYC.

I by no means fall in the live in a shoebox cohort, but some of the specifics of your post are pretty silly. Laundry service and a made are completely unnecessary. Everything else is reasonable, though.

[Moneytrees]

If you make it 7 years in biglaw in NYC with no debt and HAVEN'T saved up a million dollars, you're doing something very wrong.

It's not that simple. You might be fine with living in a crappy studio or with roommates for your first few years, but that's almost certainly not going to be the case over the course of 7 years. NYC has a 5% city tax just to live here that you need to consider. The cost of making life manageable and tolerable while working in Biglaw add up (living close to the office, laundry service, maid to help around your apt., decent gym, etc.). Plus you will likely have mounting expenses as you enter your 30s and potentially get married and start a family.

It's possible, but far from likely based on what I've seen in NYC.

I by no means fall in the live in a shoebox cohort, but some of the specifics of your post are pretty silly. Laundry service and a made are completely unnecessary. Everything else is reasonable, though.

It might sound silly but I actually found that things like that are important to not getting burnt out.

[Anonymous User]

If you make it 7 years in biglaw in NYC with no debt and HAVEN'T saved up a million dollars, you're doing something very wrong.

It's not that simple. You might be fine with living in a crappy studio or with roommates for your first few years, but that's almost certainly not going to be the case over the course of 7 years. NYC has a 5% city tax just to live here that you need to consider. The cost of making life manageable and tolerable while working in Biglaw add up (living close to the office, laundry service, maid to help around your apt., decent gym, etc.). Plus you will likely have mounting expenses as you enter your 30s and potentially get married and start a family.

It's possible, but far from likely based on what I've seen in NYC.

I by no means fall in the live in a shoebox cohort, but some of the specifics of your post are pretty silly. Laundry service and a made are completely unnecessary. Everything else is reasonable, though.

I've never done my laundry in 10 years of living in NYC, never lived in a studio, mostly lived in the west village, and only had a roommate for 2 years, and I still managed to save up $2 million. I was also getting paid a lot less than you associates now. Again, if you can't save up a million dollars with no debt in 7 years, you are bad at finances.

[Moneytrees]

If you make it 7 years in biglaw in NYC with no debt and HAVEN'T saved up a million dollars, you're doing something very wrong.

It's not that simple. You might be fine with living in a crappy studio or with roommates for your first few years, but that's almost certainly not going to be the case over the course of 7 years. NYC has a 5% city tax just to live here that you need to consider. The cost of making life manageable and tolerable while working in Biglaw add up (living close to the office, laundry service, maid to help around your apt., decent gym, etc.). Plus you will likely have mounting expenses as you enter your 30s and potentially get married and start a family.

It's possible, but far from likely based on what I've seen in NYC.

I by no means fall in the live in a shoebox cohort, but some of the specifics of your post are pretty silly. Laundry service and a made are completely unnecessary. Everything else is reasonable, though.

I've never done my laundry in 10 years of living in NYC, never lived in a studio, mostly lived in the west village, and only had a roommate for 2 years, and I still managed to save up $2 million. I was also getting paid a lot less than you associates now. Again, if you can't save up a million dollars with no debt in 7 years, you are bad at finances.

That's pretty incredible. Are you counting the value of any real estate holdings in your calculation of savings?

I think it's also worth mentioning that the stock market and real estate market has been gangbusters for basically 10 years straight, and that there is no guaranty that that will happen again.

[Anonymous User]

If you make it 7 years in biglaw in NYC with no debt and HAVEN'T saved up a million dollars, you're doing something very wrong.

It's not that simple. You might be fine with living in a crappy studio or with roommates for your first few years, but that's almost certainly not going to be the case over the course of 7 years. NYC has a 5% city tax just to live here that you need to consider. The cost of making life manageable and tolerable while working in Biglaw add up (living close to the office, laundry service, maid to help around your apt., decent gym, etc.). Plus you will likely have mounting expenses as you enter your 30s and potentially get married and start a family.

It's possible, but far from likely based on what I've seen in NYC.

I by no means fall in the live in a shoebox cohort, but some of the specifics of your post are pretty silly. Laundry service and a made are completely unnecessary. Everything else is reasonable, though.

I've never done my laundry in 10 years of living in NYC, never lived in a studio, mostly lived in the west village, and only had a roommate for 2 years, and I still managed to save up $2 million. I was also getting paid a lot less than you associates now. Again, if you can't save up a million dollars with no debt in 7 years, you are bad at finances.

That's pretty incredible. Are you counting the value of any real estate holdings in your calculation of savings?

I think it's also worth mentioning that the stock market and real estate market has been gangbusters for basically 10 years straight, and that there is no guaranty that that will happen again.

No real estate. Huge bull market over the last 10 years yes, but someone did the cash calculation upthread, and with the current salaries/bonuses, it's easy nowadays.

[Anonymous User]

I by no means fall in the live in a shoebox cohort, but some of the specifics of your post are pretty silly. Laundry service and a made are completely unnecessary. Everything else is reasonable, though.

+1. I live in a 4000sqft house that I clean myself, I do my and my wife's laundry, I have an hour commute each way, and I have still managed to bill no less than 2500 hours ever since I started biglaw. If just saving a bunch is all you care about, some of the "conveniences" others are talking about are totally unnecessary.

That said, if you think maid/laundry service will delay burnout, then it's a no brainer investment. A few hundred a month in exchange for more time at $400k+ salary+bonus is a smart trade any day. I'm just saying you don't actually need it.

Anyway, I do not consider myself to be particularly good with money (I kept way too much in cash for my first few years to have for a down payment said house), but I'm still on track for $1m in assets (includes equity in house ignoring appreciation) by Y7 or Y8 at worst. The insano market has helped, but as long as the market doesn't tank and you keep less in cash than I did then $1m by Y7 is easy.

[run26.2]

While I 100% agree that you should invest into the market as much as you can, I have taken that approach (C/O 2020) and have actually lost money by investing (admittedly a slight growth tilt). This is not meant to discourage anyone from investing in the market, but I think people are overly critical about holding cash positions. Yes, the market has historically trended upwards, but past performance is not indicative of future performance. Additionally, not everyone can stomach the volatility that comes with a crash. I bet that there would be a lot fewer bulls in 2001 / 2008. You should only invest what you are willing to lose, and that's a subjective judgment. Not everyone is strictly happier optimizing for expected value.


Also, while investing is a big factor in building wealth, don't lose sight of the primary builder of wealth - your income. Decisions like sticking it out in biglaw instead of taking that in-house job, gunning for partner, deciding to hold off retirement for a couple years, and etc. are likely to play a much bigger factor in your overall NW.

Income being the primary builder of wealth is only the case when your wealth is small relative to your income. I suggest you use that income to purchase assets that generate positive returns. Once your assets get big enough, they become the primary driver of your wealth.

[Anonymous User]

While I 100% agree that you should invest into the market as much as you can, I have taken that approach (C/O 2020) and have actually lost money by investing (admittedly a slight growth tilt). This is not meant to discourage anyone from investing in the market, but I think people are overly critical about holding cash positions. Yes, the market has historically trended upwards, but past performance is not indicative of future performance. Additionally, not everyone can stomach the volatility that comes with a crash. I bet that there would be a lot fewer bulls in 2001 / 2008. You should only invest what you are willing to lose, and that's a subjective judgment. Not everyone is strictly happier optimizing for expected value.


Also, while investing is a big factor in building wealth, don't lose sight of the primary builder of wealth - your income. Decisions like sticking it out in biglaw instead of taking that in-house job, gunning for partner, deciding to hold off retirement for a couple years, and etc. are likely to play a much bigger factor in your overall NW.

Income being the primary builder of wealth is only the case when your wealth is small relative to your income. I suggest you use that income to purchase assets that generate positive returns. Once your assets get big enough, they become the primary driver of your wealth.

Outside of basic index funds, what other "assets" would you recommend?

[Anonymous User]

Outside of basic index funds, what other "assets" would you recommend?

Be quiet! If you keep asking questions like that the cryptofreaks will swarm!

[Sackboy]

Outside of basic index funds, what other "assets" would you recommend?

None. Just buy index funds. Forget about them and retire in X years.

[Sackboy]

+1. I live in a 4000sqft house that I clean myself, I do my and my wife's laundry, I have an hour commute each way, and I have still managed to bill no less than 2500 hours ever since I started biglaw. If just saving a bunch is all you care about, some of the "conveniences" others are talking about are totally unnecessary.

That said, if you think maid/laundry service will delay burnout, then it's a no brainer investment. A few hundred a month in exchange for more time at $400k+ salary+bonus is a smart trade any day. I'm just saying you don't actually need it.

Anyway, I do not consider myself to be particularly good with money (I kept way too much in cash for my first few years to have for a down payment said house), but I'm still on track for $1m in assets (includes equity in house ignoring appreciation) by Y7 or Y8 at worst. The insano market has helped, but as long as the market doesn't tank and you keep less in cash than I did then $1m by Y7 is easy.

We've been in the most incredible bull market in history, though. You're on track for $1M at Y7 (congrats, that's awesome), but I feel like it's very much being casually dismissed by many of the mid-level and senior associates in here. The market averaged 14% from 2011-2020. If that even slowed down to 9% for the next decade (which it very well could be lower), that's an extra $20k that associates need to save per year to hit that same target at Y7. By no means am I saying you can't save a ton in biglaw. I am just encouraging junior associates to be cautious about their wealth building abilities during their time in biglaw and encouraging mid level and senior associates to not paint too deceptive of pictures by making it sound like their ability to generate wealth was particularly normal. In a different decade, all of the net worth numbers in that net worth thread that existed awhile back would have been 20-30% lower.

[Anonymous User]

+1. I live in a 4000sqft house that I clean myself, I do my and my wife's laundry, I have an hour commute each way, and I have still managed to bill no less than 2500 hours ever since I started biglaw. If just saving a bunch is all you care about, some of the "conveniences" others are talking about are totally unnecessary.

That said, if you think maid/laundry service will delay burnout, then it's a no brainer investment. A few hundred a month in exchange for more time at $400k+ salary+bonus is a smart trade any day. I'm just saying you don't actually need it.

Anyway, I do not consider myself to be particularly good with money (I kept way too much in cash for my first few years to have for a down payment said house), but I'm still on track for $1m in assets (includes equity in house ignoring appreciation) by Y7 or Y8 at worst. The insano market has helped, but as long as the market doesn't tank and you keep less in cash than I did then $1m by Y7 is easy.

We've been in the most incredible bull market in history, though. You're on track for $1M at Y7 (congrats, that's awesome), but I feel like it's very much being casually dismissed by many of the mid-level and senior associates in here. The market averaged 14% from 2011-2020. If that even slowed down to 9% for the next decade (which it very well could be lower), that's an extra $20k that associates need to save per year to hit that same target at Y7. By no means am I saying you can't save a ton in biglaw. I am just encouraging junior associates to be cautious about their wealth building abilities during their time in biglaw and encouraging mid level and senior associates to not paint too deceptive of pictures by making it sound like their ability to generate wealth was particularly normal. In a different decade, all of the net worth numbers in that net worth thread that existed awhile back would have been 20-30% lower.

I should have been more clear. I kept EVERYTHING in cash except maxing out my 401k before I bought the house (last year). So by the time I bought my house I had about $260k in cash that had never seen a single fund. I've been investing since then, but my investments have largely stagnated. I totally agree that it's been easier to build wealth over the last decade and that most of the net worth numbers are correspondingly inflated, but I didn't take much advantage of those opportunities. So no, you don't need a bull market to get to $1m by Y7, even if it helps.

[Sackboy]

I should have been more clear. I kept EVERYTHING in cash except maxing out my 401k before I bought the house (last year). So by the time I bought my house I had about $260k in cash that had never seen a single fund. I've been investing since then, but my investments have largely stagnated. I totally agree that it's been easier to build wealth over the last decade and that most of the net worth numbers are correspondingly inflated, but I didn't take much advantage of those opportunities. So no, you don't need a bull market to get to $1m by Y7, even if it helps.

Very impressive! Agree with the additional context.

[Anonymous User]

+1. I live in a 4000sqft house that I clean myself, I do my and my wife's laundry, I have an hour commute each way, and I have still managed to bill no less than 2500 hours ever since I started biglaw. If just saving a bunch is all you care about, some of the "conveniences" others are talking about are totally unnecessary.

That said, if you think maid/laundry service will delay burnout, then it's a no brainer investment. A few hundred a month in exchange for more time at $400k+ salary+bonus is a smart trade any day. I'm just saying you don't actually need it.

Anyway, I do not consider myself to be particularly good with money (I kept way too much in cash for my first few years to have for a down payment said house), but I'm still on track for $1m in assets (includes equity in house ignoring appreciation) by Y7 or Y8 at worst. The insano market has helped, but as long as the market doesn't tank and you keep less in cash than I did then $1m by Y7 is easy.

We've been in the most incredible bull market in history, though. You're on track for $1M at Y7 (congrats, that's awesome), but I feel like it's very much being casually dismissed by many of the mid-level and senior associates in here. The market averaged 14% from 2011-2020. If that even slowed down to 9% for the next decade (which it very well could be lower), that's an extra $20k that associates need to save per year to hit that same target at Y7. By no means am I saying you can't save a ton in biglaw. I am just encouraging junior associates to be cautious about their wealth building abilities during their time in biglaw and encouraging mid level and senior associates to not paint too deceptive of pictures by making it sound like their ability to generate wealth was particularly normal. In a different decade, all of the net worth numbers in that net worth thread that existed awhile back would have been 20-30% lower.

The recent salary raises are cumulatively higher over 8 years than my investment gains in the same time period, and I'm aggressive about dumping money into the market. When I started an 8th year's total comp was $337K. It's now $530k. That's a TWO HUNDRED THOUSAND DOLLAR difference. Very similar deltas for years 6 and 7. That's almost $600k in increased cumulative salary alone.