My name is Joshua and I write about investing and financial topics over at The Biglaw Investor.
Before I go any further, I’ve looked through all of Gen Y’s previous Financial Freedom interviews to find one with the most comments (current record holder is White Collar Freedom).
I want this to be Gen Y’s most commented on interview to date. Competitive? Maybe.
In order to get a lot of comments from you, I’ve got an ASK and a PRIZE:
THE ASK: This interview series is all about FIGHTING for your financial freedom. Freedom will not be handed to you. So, in the comments, tell us ONE concrete thing you will do after reading this post to get you closer to financial freedom. It has to be something that you haven’t already done (i.e. you must tell us something that you’re going to do, so it needs to be actionable). This is going to be most challenging for people well on their way to financial freedom, but everyone reading this post knows they could be doing something more.
THE PRIZE: Ever notice that when you learn something, it usually involves video, text & images … but it’s always delivered over the web?
How often have you been on the internet trying to learn something, but instead you get distracted by something else? ALL THE DAMN TIME right?
Well there’s always been one format that I’ve learned from the most … and that’s books.
Normally when you’re reading a book, you’re not doing anything else.
This might seem like a small detail, but sitting down and reading a physical object makes it sink in much much much deeper.
SO WHAT’S THE DAMN PRIZE?
A committee of two (GYFG and myself) will pick the best comment on this interview post to receive a PHYSICAL box in the mail.
And I’m calling it the Biglaw Investor Box.
It’s a physical package you get in your physical mailbox. You win the prize, you wait in anticipation to get it, and a few days later a REAL thing shows up at your door (it’s like Christmas … but for nerdy adults)!
Inside the Biglaw Investor Box are several things (I will purposely be vague to keep it secret, and keep you in anticipation):
- Maybe there will be a book or two.
- It might have a physical object that I love and use everyday.
- It might have some words of wisdom written down on an actual piece of paper.
- Perhaps some other helpful tools.
Only the person with the best comment will know!
Ok … back to telling my story for a bit.
I’m a corporate M&A lawyer working in the private equity group of a law firm in New York. Each day I wake up at 6:00am to get an early start on the day because I’ve found over time that the morning hours are my most productive. I’m also in bed by 10:00pm (okay, 9:30) most nights. I learned a long time ago that everyone needs to listen to their own body when setting those schedules.
My journey started with nearly $200K in student loan debt when I graduated from law school. I’d always been good with money and made a calculated bet that law school would be better for me in the long run (turns out, I was right). Even going in with my eyes wide open, I’m shocked at how long it took to repay the debt. I didn’t count on going through law school during a particularly unfortunate time when student loans were fixed between 6.8% and 8.5% with no refinance options in the private market. I paid over $14,000 interest in the first year of repayment. It’s kind of hard to make progress paying down the principal when you’re spending $1,150 a month on interest.
However, the mountain is always tallest when you’re standing at the base. I tried to keep in mind that $200,000 in debt would ultimately just be a drop in the bucket if I planned on reaching my financial goal of becoming a multi-millionaire. For those reasons, you just start paying down the debt and count on the fact that time will keep moving forward.
I didn’t get through the debt payoff years completely unscathed. There was that time that I made the worst financial mistake of my life and lost $10,000 when I thought I had special insight in the market. It took some time for me to realize the wisdom of index funds. For a long time I thought being average was for average people and still find it ironic that by investing to get the market return you’ll beat something like 80% of all investors. It turns out that it really is the financial helpers that get rich when people trade stocks.
As I’ve gone through the ranks at the law firm, I’m often surprised by the financial mistakes lawyers make. Many people think lawyers are rich, but there’s a reason why lawyers are underrepresented in The Millionaire Next Door. Nowadays the lawyers making high salaries live in high cost areas, spend plenty of money keeping up with the Joneses and neglect to remember that they need to save more thanks to getting a late start in their career. I started my site to create a future repository of financial information for lawyers and other high-income professionals.
What is your favorite Quote or Mantra that you live by?
My favorite quotes are often brilliant one sentence statements by Mark Twain. The one I remember daily is:
“I’ve been through a lot of bad things in my life, some of which actually happened.”
It’s a steady reminder that we’re meant to live life in the present moment. We all get stuck going through imaginary future events, many of which never come to pass.
Another favorite of mine (I can’t just list one Mark Twain quote) is:
“When I was a boy of fourteen, my father was so ignorant I could hardly stand to have the old man around. But when I got to be twenty-one, I was astonished at how much he had learned in seven years.”
What is your definition of Financial Freedom?
Financial Freedom is when you are free from finances. You’re free from finances when you can live life as you choose without regard to financial considerations. I’m one of the lucky ones that enjoys practicing law, but I’m aware that each morning I show up at a particular building on a particular street because someone is paying me to do so. I certainly wouldn’t show up for free.
What is your FREEDOM number?
I don’t have a particular number. The reason? In my mind it would suggest I’m doing my current gig UNTIL I reach that number, at which point I’ll finally start living the life I want. I think that’s a trap. Too often we humans think life will be better once something we’ve been waiting for finally happens. It reminds me of the rat race comic (click through to see) of rats running through a maze with signs that say “happiness is right around the corner.” I’ve got news for you. Happiness isn’t right around the corner. Happiness starts today. So while I don’t have a particular number in mind, I admit that I’m heavily motivated by money (and competitive as I mentioned before). In fact, now that I think about it, $10,000,001 sounds like a pretty good freedom number to me.
What is your favorite Asset Class to invest in and why?
I’m a big fan of keeping things simple, which means investing in index funds at Vanguard. When I was younger, I dabbled in stock picking and had some success and other failures. It consumes a lot of your time to pick and follow stocks. It’s better to spend that time invested in growing your income. Also, I’m not convinced that anyone can beat the market. Have you ever thought that out of 300 million people if everyone is calling heads or tails on a series of random coin flips, someone is going to nail it 100,000 in a row? And that person will become famous for his or her ability to predict coin tosses? And we’ll totally buy into it? I’m not saying that’s Warren Buffett, but think about it for a few minutes!
What is your favorite online financial resource?
My favorite resource is the Bogleheads forum. It’s truly a gift to the world and completely free. The owners don’t even monetize it for themselves, which means they’re forgoing millions in revenue to support the right thing. I really admire Alex Frakt for that decision.
If you haven’t visited, the Bogleheads is where all the really smart and nice people on the Internet hang out. So yeah, it’s basically the opposite of YouTube comments. The collective knowledge of the group is powerful and helpful in answering the trickiest questions (including complicated tax stuff). Chances are good that any financial question you’ve had has already been asked anyway, so the forum archives is a treasure trove of helpful answers.
When it comes to building wealth, do you spend more time figuring out how to cut expenses or increase income? Why?
Here’s a funny fact about Biglaw. Everyone gets paid the same. Even better, you’re automatically promoted each year regardless of merit (the downside being that if it’s not working out, you’ll quickly be let go). In fact, for your voyeuristic pleasure I’ll lay out the Biglaw salary scale for the readers. Bonuses are also “market” every year and usually set by the most prestigious firms at the end of November. Pretty weird that everyone knows what everyone is making, right?
1st year – $180,000
2nd year – $190,000
3rd year – $210,000
4th year – $235,000
5th year – $260,000
6th year – $280,000
7th year – $300,000
8th year – $315,000
For this reason, there’s not a lot I can do to increase my income at my day job. That’s different if you can break into the ranks of equity partnership, but being an equity partner at a firm usually has less to do with your skills as a lawyer and more to do with your skills at bringing in clients.
Despite all this, I still think it makes sense for most people to adopt an abundance mentality and work on increasing their income. When it comes to cutting expenses, my main push is for people to realize how much unnecessary spending is going on in their lives. High income is like sand flowing through your fingers. It’s easy to spend money on things you don’t like or even need without much consequences, so high earners should make sure to audit their expenses and take steps to limit lifestyle inflation, even more often and carefully than people earning an average US income.
How many hours a week do you watch TV? What’s your favorite show?
I’m not much of a fan of TV and haven’t had cable for years. I’ve learned from living abroad that the NFL has a high quality service called NFL Gamepass that lets you watch any game live in HD. Once I figured out how to get that in the States and on my Apple TV, I’m all set for live events.
Otherwise, my favorite show right now is probably Air Disasters. Understandably, it’s not everyone’s cup of tea, but they do a really impressive job breaking down each component of a major airline crash and reconstructing what went wrong. Oddly enough I feel safer after watching Air Disasters because you start to understand that it takes a lot of errors to actually bring down a plane. I won’t blame you if you don’t watch.
If you had to recommend 1 book, what would it be? And why?
How to Get Filthy Rich in Rising Asia by Mohsin Hamid. It’s fiction but written in the style of a self-help book and follows an unnamed reader that rises from poverty to riches in – you guessed it – rising Asia. Each chapter begins with a rule — “Work for Yourself,” “Don’t Fall in Love,” “Be Prepared to Use Violence” – and then switches over to narrative. I haven’t read another book like it and highly recommend you read the first chapter from Amazon. You’ll know quickly whether it’s your type of book or not.
What is the best piece of advice you have ever received or what advice would you give to the readers?
Realizing that you have to make the difference you want to see in your life. Steve Jobs sums it up nicely in this short video saying that “everything around you that you call life was made up by people no smarter than you.” It’s a profound realization when you realize that you don’t have to participate in the system (no matter what the “system” means to you) and that you are much more free to break the rules than you realize.
What does living life by design look like to you? A typical day, week, month, year, or whatever?
Being conscious, focused on the present and realizing that you’re making a choice no matter what you’re doing (and in fact, not choosing is a form of choosing as well). Living a life by design means taking on the active voice in your own life and being the force of change. Funny thing is it doesn’t even take much force to make big impacts. As the Roman poet Ovid said, “Dripping water hollows out stone, not through force but through persistence.”
What is holding you back from living life by design?
Nothing. I’m not yet financially independent, but that’s not stopping me from living a life by design. I’m choosing to build wealth because it is the right choice for me now. When it’s no longer the right choice, I hope I’ll have the courage and foresight to make a different choice.
Where can you find me?
I have all the usual social profiles, but the best place to find me is at The Biglaw Investor. It’s been great to have the opportunity to share my story and path to financial freedom. Thanks for thinking of me GYFG and allowing me to be part of your Freedom Fighter Interview series.
p.s. Don’t forget to leave a comment for your chance to win the Biglaw Investor Box.
p.p.s. Yes, we will need your mailing address to send you the prize since it’s a physical box.