Getting Rich as a Big Law Lawyer Forum

[Anonymous User]

I thought we were talking about eat outs on weekends/dinners w friends and family? We are talking about lunches now? Then I wouldn't spend more than 10 bucks. Who's spending more than 20 bucks for lunches here?

Do you never go out to lunch with people? Why would your "normal" lunch and "normal" dinner budgets be so drastically different? Also, as a prior post suggested, you must have a social/familial circle that is as unrepresentative as it is limited if those in it can drop $30+ per dinner with any sense of regularity (if ever).

And also the lime soda example was in response to someone who posted about not ordering second/third drinks when drinking out with friends, which seems a bid odd behavior if your friends are otherwise ordering alcohol.

The OP said to order lime soda if "social appearances" mattered. You could just order...nothing instead if your friends do not care. Why would everyone need to drink alcohol at the same rate? That is what seems weird.

And it seems weird to nitpick on those two relatively trivial issues.

[Anonymous User]

I thought we were talking about eat outs on weekends/dinners w friends and family? We are talking about lunches now? Then I wouldn't spend more than 10 bucks. Who's spending more than 20 bucks for lunches here?

Do you never go out to lunch with people? Why would your "normal" lunch and "normal" dinner budgets be so drastically different? Also, as a prior post suggested, you must have a social/familial circle that is as unrepresentative as it is limited if those in it can drop $30+ per dinner with any sense of regularity (if ever).

And also the lime soda example was in response to someone who posted about not ordering second/third drinks when drinking out with friends, which seems a bid odd behavior if your friends are otherwise ordering alcohol.

The OP said to order lime soda if "social appearances" mattered. You could just order...nothing instead if your friends do not care. Why would everyone need to drink alcohol at the same rate? That is what seems weird.

And it seems weird to nitpick on those two relatively trivial issues.

To be fair my range of friends are pretty wide (teachers, social workers, non-profits, hospitality, lab techs ) and spending more than 30 on dinner is almost guaranteed if you are getting drinks and they do it pretty frequently.

I agree though that, if you want you can stack cash in NYC you can save. I lived with roommates my first two years in 2018 / 2019 and paid 1475 in Manhattan and 2100 in Williamsburg. The excess I spent on going out to dinners / bars / etc. I pay 3k or so now to live alone in EV but could definitely do a 2bd at 5k with a friend for a great unit.

It’s easier to live in NYC than most cities on a super cheap fixed cost budget due to good public transportation / can blend rent below 900 living with roommates in Bushwick / Ridgewood. Jobs for “normal” people also just generally pay more in NYC.

I’m in a super bonus heavy industry and never have hit 1st year biglaw base salary and live very well off my salary, max 401k off salary, and save a minor amount off salary.

[The Lsat Airbender]

idk, let's just put the NYC snark to rest; I just plugged $205k into a paycheck calculator and you can:

- Max 401(k) ($20k next year)
- Max megabackdoor Roth ($40k next year), or put the same amount in a taxable brokerage account if your firm doesn't allow MBRR/the Democrats kill it
- Put $2,121/month towards student loans (this is what a calculator gives me for $200k of debt at 5% APY - you can do better by refinancing; you'll do worse if you turned down the T14 $ to attend HYS)
- Pay $3000/month for rent, which gets you a studio in lower Manhattan or a 1BR (nice for WFH!) elsewhere

and you'd still have a touch less than $1500/month liquid cash (which, to be fair, has to cover food and healthcare so it's not totally discretionary. If you want more, you have tons of room to save on rent. But really plenty to live on, even with a yen for $25 cocktails)

That's not including bonuses, of course. If you put your $18k of bonuses (spitballing $20k base, $16 special bonus, cut that in half for taxes) into the stock market along with your $60k of tax-advantaged accounts, then you're putting $78k a year into the stock market, which (assuming a conservative 5% real return) makes you a millionaire (in 2021 dollars) in almost exactly 10 years. After 30 years you'll have a little over $5MM and be set to retire if you want to; after 40 years you'll be a decamillionaire. Bear in mind that, assuming megabackdoor Roth stays viable, a majority of those savings would be free and clear of income taxes.

That's just by maintaining the $78k/year savings rate (adjusting for inflation) which means you can use raises (and the eventual retirement of your loan balance) to account for the cost of raising children or going in-house or whatever. You can also, obviously, do way better than this projection by getting a full ride to law school, or living in Houston or whatever, but the point is that you only need a loose grip on your finances to do perfectly fine as a biglawyer.

[LBJ's Hair]

idk, let's just put the NYC snark to rest; I just plugged $205k into a paycheck calculator and you can:

- Max 401(k) ($20k next year)
- Max megabackdoor Roth ($40k next year), or put the same amount in a taxable brokerage account if your firm doesn't allow MBRR/the Democrats kill it
- Put $2,121/month towards student loans (this is what a calculator gives me for $200k of debt at 5% APY - you can do better by refinancing; you'll do worse if you turned down the T14 $ to attend HYS)
- Pay $3000/month for rent, which gets you a studio in lower Manhattan or a 1BR (nice for WFH!) elsewhere

and you'd still have a touch less than $1500/month liquid cash (which, to be fair, has to cover food and healthcare so it's not totally discretionary. If you want more, you have tons of room to save on rent. But really plenty to live on, even with a yen for $25 cocktails)

That's not including bonuses, of course. If you put your $18k of bonuses (spitballing $20k base, $16 special bonus, cut that in half for taxes) into the stock market along with your $60k of tax-advantaged accounts, then you're putting $78k a year into the stock market, which (assuming a conservative 5% real return) makes you a millionaire (in 2021 dollars) in almost exactly 10 years. After 30 years you'll have a little over $5MM and be set to retire if you want to; after 40 years you'll be a decamillionaire. Bear in mind that, assuming megabackdoor Roth stays viable, a majority of those savings would be free and clear of income taxes.

That's just by maintaining the $78k/year savings rate (adjusting for inflation) which means you can use raises (and the eventual retirement of your loan balance) to account for the cost of raising children or going in-house or whatever. You can also, obviously, do way better than this projection by getting a full ride to law school, or living in Houston or whatever, but the point is that you only need a loose grip on your finances to do perfectly fine as a biglawyer.

i agree with the general point that you can save a lot in BigLaw (and I do), and frankly the only way you *don't* save a shitload is some combination of: (a) law school and undergrad debt, (b) crazy high rent, (c) regular 4/5 figure spending on travel/vacations + luxury goods purchases + nightlife/drugs/alcohol.

just making fun of the anon who seems to think it's easy to get out of a dinner with friends for <$30

[Anonymous User]

for most people, food/alochol/ubers chews up a few hundred bucks a month

I am the "anon." Did you read the posts? The one I originally responded to had a budget of $2k for food/alcohol/ubers.

[LBJ's Hair]

for most people, food/alochol/ubers chews up a few hundred bucks a month

I am the "anon." Did you read the posts? The one I originally responded to had a budget of $2k for food/alcohol/ubers.

yes, his budget was for like, Jordan Belfort. yours is for a homeless guy living at the Columbus Circle subway station

[Anonymous User]

yes, his budget was for like, Jordan Belfort. yours is for a homeless guy living at the Columbus Circle subway station

My budget is what I use for living in Manhattan in a $2.5k/month studio apartment.

[Anonymous User]

yes, his budget was for like, Jordan Belfort. yours is for a homeless guy living at the Columbus Circle subway station

My budget is what I use for living in Manhattan in a $2.5k/month studio apartment.

Genuine question: if you love to save why don’t you live outside of Manhattan and not live like a pauper? Or double down and live like a pauper outside of Manhattan?

[Anonymous User]

Genuine question: if you love to save why don’t you live outside of Manhattan and not live like a pauper? Or double down and live like a pauper outside of Manhattan

Virtually no LS debt and decent savings (~$150k) from before law school entered the calculus and affected how much rent I was willing to pay. But yes, I could save even more through different rent choices.

[Anonymous User]

How to get rich as a big law lawyer? Become a v10 equity partner. You'll make everything back and more after one year of equity partnership that you would have scrimped and saved over 10 years living as a hobo-associate.

[Anonymous User]

How to get rich as a big law lawyer? Become a v10 equity partner. You'll make everything back and more after one year of equity partnership that you would have scrimped and saved over 10 years living as a hobo-associate.

I think the premise is "how do you make the most of the biglaw money and then get out".

[Anonymous User]

How to get rich as a big law lawyer? Become a v10 equity partner. You'll make everything back and more after one year of equity partnership that you would have scrimped and saved over 10 years living as a hobo-associate.

Not true. Do you think first year share partners actually make the stated PPP or something? They... do not. Certainly true that if you make it it won't take particularly long to out-do any associate savings, but the idea that you'll out-do it in one year is just wrong. Unless you are, you know, not actually saving as an associate.

But V10 equity partner is the answer to "Earning Generational Wealth as a big law lawyer," for sure

[Anonymous User]

This is such a depressing thread.

[Anonymous User]

idk, let's just put the NYC snark to rest; I just plugged $205k into a paycheck calculator and you can:

- Max 401(k) ($20k next year)
- Max megabackdoor Roth ($40k next year), or put the same amount in a taxable brokerage account if your firm doesn't allow MBRR/the Democrats kill it
- Put $2,121/month towards student loans (this is what a calculator gives me for $200k of debt at 5% APY - you can do better by refinancing; you'll do worse if you turned down the T14 $ to attend HYS)
- Pay $3000/month for rent, which gets you a studio in lower Manhattan or a 1BR (nice for WFH!) elsewhere

and you'd still have a touch less than $1500/month liquid cash (which, to be fair, has to cover food and healthcare so it's not totally discretionary. If you want more, you have tons of room to save on rent. But really plenty to live on, even with a yen for $25 cocktails)

That's not including bonuses, of course. If you put your $18k of bonuses (spitballing $20k base, $16 special bonus, cut that in half for taxes) into the stock market along with your $60k of tax-advantaged accounts, then you're putting $78k a year into the stock market, which (assuming a conservative 5% real return) makes you a millionaire (in 2021 dollars) in almost exactly 10 years. After 30 years you'll have a little over $5MM and be set to retire if you want to; after 40 years you'll be a decamillionaire. Bear in mind that, assuming megabackdoor Roth stays viable, a majority of those savings would be free and clear of income taxes.

That's just by maintaining the $78k/year savings rate (adjusting for inflation) which means you can use raises (and the eventual retirement of your loan balance) to account for the cost of raising children or going in-house or whatever. You can also, obviously, do way better than this projection by getting a full ride to law school, or living in Houston or whatever, but the point is that you only need a loose grip on your finances to do perfectly fine as a biglawyer.

You've also got the regular backdoor Roth IRA, where you can sock away another $6k a year ($12k if you've got an employed spouse) in a tax-advantaged account.

[Definitely Not North]

You've also got the regular backdoor Roth IRA, where you can sock away another $6k a year ($12k if you've got an employed spouse) in a tax-advantaged account.

Uhhh. The numbers you're quoting make me think you might want to spend some more time reading up on MBDR. The 2021 limit was $38.5k.

[The Lsat Airbender]

You've also got the regular backdoor Roth IRA, where you can sock away another $6k a year ($12k if you've got an employed spouse) in a tax-advantaged account.

Uhhh. The numbers you're quoting make me think you might want to spend some more time reading up on MBDR. The 2021 limit was $38.5k.

Backdoor != megabackdoor

Backdoor is when you contribute to a Traditional IRA and then immediately (so as to avoid realizing gains) recharacterize it as Roth. Essentially you sidestep the income caps for Roth IRA contributions. Limit $6k/person.

Megabackdoor is when you make post-tax contributions to a 401(k) plan and then convert to Roth 401(k).

[Anonymous User]

This is the most out-of-touch thread I've ever seen.

You make a minimum of 220K - you should be able to save money, unless you live an extremely extravagant life. The only exception here is if you're supporting a family of like 4-5 or supporting elderly parents or something similar (ie not the typical scenario for the junior associate, but I recognize that some people are in this situation). However, if you're single or just with a partner, the idea that we don't make enough money to grow wealth is ludicrous.

Restaurants: The c/o 2011 guy who said $40/meal is wrong. Meals at middle of the road restaurants in Manhattan are typically $60-80/meal with drinks. I have 1-2 of these per week. High end restaurants will be $140+. I typically have about 1 of those a month. All my other meals are in the $15-25 range (Chipotle, Cava, etc.) You might value eating at nice restaurants more than I do and that's fine, but let's not act like every meal in NYC is a $200 affair.

Rent: The rent is much higher than today than it was when I was a first year, but in my experience, many juniors do this to themselves. There are plenty of more affordable neighborhoods in Manhattan that people just don't want to live in (Murray Hill, Midtown East, Hell's Kitchen, Kips Bay, LES, Fidi). If you want to live alone in Chelsea, West Village, East Village, etc. then it's going to cost you. Of course, as mentioned above, I recognize that not every junior associate is single. You may have a family/kids and require a bigger space, which I completely get.

Investing: Why are people in here acting like the bull market is over and criticizing us midlevels for having rosy views of the market? Last I checked, we're still at ATHs and the last two years have been the best so far. Maybe you won't get 20% growth YOY, but then again maybe you will. No one knows, but just put your savings in the market and try it before complaining about missing out on market gains.

FWIW, you make significantly more than the majority of Americans. Including the majority of people that live in Manhattan. Don't "ok boomer" us just because you're irresponsible with your money.

[Anonymous User]

You've also got the regular backdoor Roth IRA, where you can sock away another $6k a year ($12k if you've got an employed spouse) in a tax-advantaged account.

Uhhh. The numbers you're quoting make me think you might want to spend some more time reading up on MBDR. The 2021 limit was $38.5k.

Backdoor != megabackdoor

Backdoor is when you contribute to a Traditional IRA and then immediately (so as to avoid realizing gains) recharacterize it as Roth. Essentially you sidestep the income caps for Roth IRA contributions. Limit $6k/person.

Megabackdoor is when you make post-tax contributions to a 401(k) plan and then convert to Roth 401(k).

Yep. So if your firm allows it, you can contribute to your trad 401(k) ($20.5k), MBDR 401(k) ($40.5k), HSA ($3.6k) and BDR IRA ($6k). That's $70.6k in tax-advantaged retirement savings a year - pretty amazing IMO. Most juniors probably won't max out that space, but it's still good to know what all the tools are.

[almondbutter]

You've also got the regular backdoor Roth IRA, where you can sock away another $6k a year ($12k if you've got an employed spouse) in a tax-advantaged account.

Uhhh. The numbers you're quoting make me think you might want to spend some more time reading up on MBDR. The 2021 limit was $38.5k.

Backdoor != megabackdoor

Backdoor is when you contribute to a Traditional IRA and then immediately (so as to avoid realizing gains) recharacterize it as Roth. Essentially you sidestep the income caps for Roth IRA contributions. Limit $6k/person.

Megabackdoor is when you make post-tax contributions to a 401(k) plan and then convert to Roth 401(k).

Yep. So if your firm allows it, you can contribute to your trad 401(k) ($20.5k), MBDR 401(k) ($40.5k), HSA ($3.6k) and BDR IRA ($6k). That's $70.6k in tax-advantaged retirement savings a year - pretty amazing IMO. Most juniors probably won't max out that space, but it's still good to know what all the tools are.

Also should note that the MBDR limit is per employer. If you were to lateral at some point next year, you could contribute 40.5k to first employer's MBDR and then 61k to next employer's MBDR. Assuming ofc that each employer's 401k plan allows MBDR contribution/conversion and Congress doesn't nix the MBDR.

[Monochromatic Oeuvre]

Hilariously dumb and autistic thread, classic TLS. Lime sodas for all involved.

[Wanderingdrock]

You've also got the regular backdoor Roth IRA, where you can sock away another $6k a year ($12k if you've got an employed spouse) in a tax-advantaged account.

Uhhh. The numbers you're quoting make me think you might want to spend some more time reading up on MBDR. The 2021 limit was $38.5k.

MBDR is for the 401(k). IRA limits are 6k per taxpayer.

Though also to clarify: The 2021 limit for 401(k)s is $58,000. The $38,500 calculation comes from $58,000 minus the $19,500 voluntary contribution limit, but if you didn't make any earlier contributions you could just MBDR the whole $58,000. Also, the $6,000 limit per taxpayer has nothing to do with whether your spouse is working; if you file jointly, your spouse can use your income to justify their contribution (your income just has to be greater than the total of your and your spouse's IRA contributions).

[Anonymous User]

Hilariously dumb and autistic thread, classic TLS. Lime sodas for all involved.

By lime sodas we mean like a sprite? Or like lime juice and club soda? I confess I'm partial to la croix lime flavor.

(Also @ out-of-touch anon, this is a thread about how to get rich, not sure what could be more out of touch with the common man than that)

[Anonymous User]

People can’t seem to keep their miserable comments to themselves. There is nothing wrong with wanting to learn the best way to manage your money to become and stay wealthy. It’s called being a responsible adult.

My wife and and I are antisocial and don’t like going out with friends so I guess we will be completely fine saving money lol

I thought this might help see some other perspectives and hear how people are handling big law money but I think it’s back to the books. I figured when you are making so much money people would want to make sure they manage it the most effective way possible.

Also, how did this turn into a plan to leave big law thread? Personally, I don’t want kids and love working maybe that’s why I don’t understand why so many people don’t want the stress of working in big law.

[Anonymous User]

I don’t see anything “irresponsible” with spending money and having a good life, if you can afford it. If you’re making good money and reasonably expect to make decent money throughout your career, make sure you have a retirement fund and a rainy day fund, beyond that its your choice. If you choose to spend today it’s a choice you made, and you won’t be “rich” like hobo-associates. It’s not irresponsible.

[Anonymous User]

I don’t see anything “irresponsible” with spending money and having a good life, if you can afford it. If you’re making good money and reasonably expect to make decent money throughout your career, make sure you have a retirement fund and a rainy day fund, beyond that its your choice. If you choose to spend today it’s a choice you made, and you won’t be “rich” like hobo-associates. It’s not irresponsible.

I think it’s fine to spend what you want to spend and enjoy life as long as you can make sure what you have for retirement will allow you to keep living the same quality of life. I think that’s what I’m concerned with. It would suck to live super well and then be too old to work and not live quite as luxuriously the rest of my life.

Honestly I just want to figure out how to have it all. Nice cars, nice house, vacation money, plenty for retirement. That’s what I want to figure out.