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What to do with SA money?
Posted: Wed Nov 23, 2016 10:42 am
by Anonymous User
What is the best approach for SA earnings?
Situation: KJD, married, 0 undergrad debt, 80k law school debt after 2 years, SO has 20K debt but might be going for a grad degree in Spring, want to have kids within a four years, so would ideally like to buy a house within 5-6, market paying SA.
Should I invest/put it in savings? Use the money to cover most of 3L loans? Pay off SO's undergrad loans? We have almost no savings as of now because neither of us worked prior to LS so that hurt us obviously, but I figured there's people here who have been in this situation or could at least share how they approached using SA earnings?
Re: What to do with SA money?
Posted: Wed Nov 23, 2016 10:44 am
by FSK
Just keep it as an emergency fund.
Re: What to do with SA money?
Posted: Wed Nov 23, 2016 10:48 am
by barprepblues
Save half and pay off your loans with the other.
Re: What to do with SA money?
Posted: Wed Nov 23, 2016 10:51 am
by BmoreOrLess
Paid off loans with about a 1/3rd of the extra money, and have been using the rest to finance a killer 3L. I decided this is the last time I'll be able to do whatever I want, whenever I want, so I said fuck it.
Re: What to do with SA money?
Posted: Wed Nov 23, 2016 10:52 am
by zot1
Stack it on your bed. Then take selfies with it.
Re: What to do with SA money?
Posted: Wed Nov 23, 2016 11:19 am
by Anonymous User
Burn it
Re: What to do with SA money?
Posted: Wed Nov 23, 2016 11:58 am
by EncyclopediaOrange
zot1 wrote:Stack it on your bed. Then take selfies with it.
Do you think we could bypass the awkward looks at the bank and just set up cash payments through HR?
Re: What to do with SA money?
Posted: Wed Nov 23, 2016 12:03 pm
by zot1
EncyclopediaOrange wrote:zot1 wrote:Stack it on your bed. Then take selfies with it.
Do you think we could bypass the awkward looks at the bank and just set up cash payments through HR?
If you're an SA, you clearly can do anything.
Re: What to do with SA money?
Posted: Wed Nov 23, 2016 12:04 pm
by BigZuck
I assume you're a 2L now? Just an FYI, you're probably going to get through the summer with significantly less money than you think. Even when you're stacking FAT STACKS of 180K cash $$$$$ as an actual attorney it's going to be less than you think once you factor in taxes, student loan payments, insurance premiums, etc.
My best advice to you as someone who has recently been in the same situation is to try and remain decently frugal (no need to live like hermits, but try not to pick up an expensive watch or shoe habit etc. when you get paid the big bucks as a SA). Just create some good habits, and stick with them through SA summer, 3L, and your first year as an attorney.
Specifically with that money I'd probably try and use to to keep your loan balance down. But saving it is also reasonable.
Re: What to do with SA money?
Posted: Wed Nov 23, 2016 12:20 pm
by Avian
You should definitely save some of it. There are a lot of expenses between the end of 3L and when you start for which it will be helpful to have cash in the bank. Bar exam fees and even bar prep fees may have to be paid by you up front depending how your firm reimburses and if they direct bill to the bar prep company you choose. Rent and living expenses until you start. First month's rent, last month's rent, and a security deposit if you move to a place that's more convenient for work. Moving expenses. Bar trip costs. New clothes if you decide to refresh your wardrobe (as a K-JD, I needed more business attire now that I'm working full-time, year-round).
Re: What to do with SA money?
Posted: Wed Nov 23, 2016 1:00 pm
by TragicBronson
Hold whatever you'll need for miscellaneous expenses between 3L and starting at your firm, put the rest toward loans. The general rule for saving (the investment kind) while you're in debt is that if you can get a higher roi than the interest rate on your debt you do it. If not, you don't. Few investments beat the interest rate on law school debt, so according to this you'd want to pay back the loans. As for buying a house, you'll have some money on hand when that comes around, but even if you didn't, lots of banks give out 0-down loans for first time buyers these days.
Re: What to do with SA money?
Posted: Wed Nov 23, 2016 1:03 pm
by gaddockteeg
I was in a similar situation. I paid off my loans ASAP with SA money, 3L law clerk money, and my stub year.
I'm more risk averse than many people here, but I didn't think spending for extras/non-necessitiies when I owed money was a good idea.
I'm now debt free for awhile and its awesome.
I'll add that the return on your money is way higher when you throw it at loans vs. trying to save/invest it.
Re: What to do with SA money?
Posted: Wed Nov 23, 2016 1:24 pm
by v5junior
gaddockteeg wrote:
I'll add that the return on your money is way higher when you throw it at loans vs. trying to save/invest it.
Is this assuming you don't refinance or are you including some sort of emotional return on being debt free?
Re: What to do with SA money?
Posted: Wed Nov 23, 2016 1:25 pm
by v5junior
Anonymous User wrote:gaddockteeg wrote:
I'll add that the return on your money is way higher when you throw it at loans vs. trying to save/invest it.
Is this assuming you don't refinance or are you including some sort of emotional return on being debt free?
Oops, accidental anon
Re: What to do with SA money?
Posted: Wed Nov 23, 2016 5:07 pm
by star fox
Use it to reduce the amount of loans you take out as a 3L
Re: What to do with SA money?
Posted: Wed Nov 23, 2016 5:11 pm
by Boltsfan
Be an adult and make your own decisions re: your finances without consulting a forum of anonymous strangers.
Or lease a Porsche or something, idk.
Re: What to do with SA money?
Posted: Wed Nov 23, 2016 5:18 pm
by Hikikomorist
Planning to use it to avoid taking out 3L loans and to max out my Roth contribution.
Re: What to do with SA money?
Posted: Wed Nov 23, 2016 5:20 pm
by Thomas Hagan, ESQ.
Invest it all in this brand new type of airplane called the Concorde Jet. Can't miss. It's the thing of the future.
Re: What to do with SA money?
Posted: Wed Nov 23, 2016 5:24 pm
by PeanutsNJam
How much are you expecting to keep after the summer is over, anyway? Use your SA money to cover your 3L living expenses. If you have Texas biglaw for SA (or any other no state/city tax place), then put some of it towards your tuition too.
What, you gonna save the money, then take out loans? Unless you can get over like 6.7% (or whatever your loan interest rate is) on your money over the next 5 years, why do that?
Re: What to do with SA money?
Posted: Wed Nov 23, 2016 5:58 pm
by 2014
star fox wrote:Use it to reduce the amount of loans you take out as a 3L
+++
It's borderline indefensible to pay off loans vs doing this. The origination fee on grad plus loans is brutal and it's a sunk cost for the old ones. Pay 2500 to old loans for the tax deduction (this should actually be your first step if that deduction survives that long) and any other funds earmarked for loans should go straight to the school.
Definitely save some though especially if you are moving to a new city post grad. Moving is expensive and whatever assistance your firm offers will almost surely not be enough.
Re: What to do with SA money?
Posted: Wed Nov 23, 2016 6:01 pm
by jbagelboy
star fox wrote:Use it to reduce the amount of loans you take out as a 3L
Re: What to do with SA money?
Posted: Wed Nov 23, 2016 6:21 pm
by anon3030
jbagelboy wrote:star fox wrote:Use it to reduce the amount of loans you take out as a 3L
I agree, reduce 3L loans. The stock market is at an all-time high, so you probably won't get a ROI that is better than just not taking on more high interest rate loans.
Re: What to do with SA money?
Posted: Thu Nov 24, 2016 2:19 am
by Big Red
the advice here is right, head off the interest rates on your 3L loans where you can
since you ask, I'll offer what feels to me like an intrusive personal opinion: between wife grad school, owning home, and having kids in the next 5 years you might have to choose one of three
Re: What to do with SA money?
Posted: Thu Nov 24, 2016 2:32 am
by Serett
Bet everything on black.
Re: What to do with SA money?
Posted: Thu Nov 24, 2016 4:35 pm
by wiz
Serett wrote:Bet everything on black.
Pick a number you pussy.