Anonymous
04/09/2014 09:24
Subject: Re:50% of my compensation is paid at the end of the year.
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:As you see you really have to get a year ahead of this. We saved during our senior associate years to blunt the effect of first year partner comp. New partners who go on spending sprees their first year feel like they never recover.
that is great advice but easier said than done.
Because a person capable of being a law firm partner is not capable of saving, planning, or forethought? He or she is only capable of living hand to mouth?
don't be annoying. it is human nature to want to splurge after finally reaching a goal that you likely have had for 10 + years. Get that new house or at least fix up the old ratty kitchen or bathroom, get a new car and stop driving the 6 year old Camry, take that vacation, reward yourself for the sacrifices. Of course it can be done but it is easier said than done. You probably chose the private practice of law in the first place for the money, so now that you have promises of it you have to DEFER that satisfaction for 12-18 months. That can be tough. I've seen it. Good luck OP and congrats!
I am in consulting, not law, but the new partner advice I have always heard is to not make any major changes for 5 years (or at least 3 when your equity has vested 75%). We don't have buy in, but we do need to hold a multiple of our base salary in stock which means that you lose some liquidity for a few years.
Anonymous
04/09/2014 09:20
Subject: Re:50% of my compensation is paid at the end of the year.
Anonymous wrote:Anonymous wrote:Anonymous wrote:As you see you really have to get a year ahead of this. We saved during our senior associate years to blunt the effect of first year partner comp. New partners who go on spending sprees their first year feel like they never recover.
that is great advice but easier said than done.
Because a person capable of being a law firm partner is not capable of saving, planning, or forethought? He or she is only capable of living hand to mouth?
don't be annoying. it is human nature to want to splurge after finally reaching a goal that you likely have had for 10 + years. Get that new house or at least fix up the old ratty kitchen or bathroom, get a new car and stop driving the 6 year old Camry, take that vacation, reward yourself for the sacrifices. Of course it can be done but it is easier said than done. You probably chose the private practice of law in the first place for the money, so now that you have promises of it you have to DEFER that satisfaction for 12-18 months. That can be tough. I've seen it. Good luck OP and congrats!
Anonymous
04/09/2014 09:19
Subject: 50% of my compensation is paid at the end of the year.
Well, OP said s/he chooses not to live within his/her means during this period. Looks like there are some good suggestions here for managing what you have every two weeks but don't discount the idea of cutting your expenses as part of that.
Anonymous
04/09/2014 09:14
Subject: Re:50% of my compensation is paid at the end of the year.
Anonymous wrote:Anonymous wrote:As you see you really have to get a year ahead of this. We saved during our senior associate years to blunt the effect of first year partner comp. New partners who go on spending sprees their first year feel like they never recover.
that is great advice but easier said than done.
Because a person capable of being a law firm partner is not capable of saving, planning, or forethought? He or she is only capable of living hand to mouth?
Anonymous
04/08/2014 16:26
Subject: Re:50% of my compensation is paid at the end of the year.
Anonymous wrote:As you see you really have to get a year ahead of this. We saved during our senior associate years to blunt the effect of first year partner comp. New partners who go on spending sprees their first year feel like they never recover.
that is great advice but easier said than done.
Anonymous
04/08/2014 16:07
Subject: Re:50% of my compensation is paid at the end of the year.
As you see you really have to get a year ahead of this. We saved during our senior associate years to blunt the effect of first year partner comp. New partners who go on spending sprees their first year feel like they never recover.
Anonymous
04/08/2014 15:21
Subject: Re:50% of my compensation is paid at the end of the year.
If your 1/2 income is $160k, learn to live off of that. $160k should be more than enough- set your sights lower. Put the rest to savings or capital expenses the following year.
Anonymous
04/08/2014 15:04
Subject: Re:50% of my compensation is paid at the end of the year.
Anonymous wrote:Anonymous wrote:Line of credit or home equity line. If you are at a law firm the firm often has banking relationships that will set these up for partners.
You should really try though to switch the cycle so you use your year end money to pay expenses in the following year. That's what I do and its a better discipline.
yes, you are correct of course. This is the first year so I don't have the benefit of the last year's bonus to get me through the year. Plus the buy-in tapped my credit. Yes, I am a partner at a small law firm. Draw is about $160K, bonuses during the year maybe another $40K, and then hopefully get a check for $150K - $200K+ in December. Going forward I will live off $75K of my bonus or so during the next year and bank the rest.
The first year is tough. It's like going back to being a starving student again. But yay! you made it! Congrats!
Anonymous
04/08/2014 14:59
Subject: Re:50% of my compensation is paid at the end of the year.
Anonymous wrote:Line of credit or home equity line. If you are at a law firm the firm often has banking relationships that will set these up for partners.
You should really try though to switch the cycle so you use your year end money to pay expenses in the following year. That's what I do and its a better discipline.
yes, you are correct of course. This is the first year so I don't have the benefit of the last year's bonus to get me through the year. Plus the buy-in tapped my credit. Yes, I am a partner at a small law firm. Draw is about $160K, bonuses during the year maybe another $40K, and then hopefully get a check for $150K - $200K+ in December. Going forward I will live off $75K of my bonus or so during the next year and bank the rest.
Anonymous
04/08/2014 14:40
Subject: 50% of my compensation is paid at the end of the year.
My husband is in a similar situation. What I do is bank the bonus at the end of the year and then set up bi-weekly automatic transfers into our regular checking account. I set the transfers up for the weeks he doesn't get paid so it's like getting a paycheck every week.
Anonymous
04/08/2014 14:31
Subject: 50% of my compensation is paid at the end of the year.
Out of curiosity, what kind of job is this?
Anonymous
04/08/2014 14:31
Subject: Re:50% of my compensation is paid at the end of the year.
Line of credit or home equity line. If you are at a law firm the firm often has banking relationships that will set these up for partners.
You should really try though to switch the cycle so you use your year end money to pay expenses in the following year. That's what I do and its a better discipline.
You should really try though to switch the cycle so you use your year end money to pay expenses in the following year. That's what I do and its a better discipline.
Anonymous
04/08/2014 14:30
Subject: 50% of my compensation is paid at the end of the year.
savings? Live low one year and then have enough savings to make it work throughout the year.
Anonymous
04/08/2014 14:30
Subject: 50% of my compensation is paid at the end of the year.
Cut your expenses.
Anonymous
04/08/2014 14:29
Subject: 50% of my compensation is paid at the end of the year.
and I cannot live off of the 50% I am paid over the course of the year through regular bi-weekly paychecks. (or I choose not to, more accurately).
what to do about the gap? how best to finance my cash-flow problem?
what to do about the gap? how best to finance my cash-flow problem?