Anonymous
05/31/2021 08:42
Subject: 25 y/o $4M Net Worth-should I go to law school?
NickScarfo wrote:Anonymous wrote:Anonymous wrote:Don’t go to law school. pls dont give law schools a cent for tuition out of this money. And don’t miss out on 3 good earning years at this point.
Just work hard and rise up in some other field.
I would have done that if I were you.
~ Top biglaw after going to top law school, F*ing exhausted
Agree. Do whatever you want, you’re set.
~ Top Biglaw somehow for my entire career after going to top law school, f*ing exhausted d have been forever but now it’s worse, and after a divorce and some weird career decisions just now at the net worth OP has.
I'm surprised that attorneys would even get married to begin with. Seems like a huge liability. Outside of religious meaning, why would anyone invite the government to define their partnership?
Do you want to have a family at some point? Having children outside of marriage is a messy way to live.
Anonymous
05/31/2021 08:42
Subject: Re:25 y/o $4M Net Worth-should I go to law school?
Anonymous wrote:Anonymous wrote:Law school is a refuge for UMC kids who don’t know what else to do. Hard pass on it.
This might be the truest thing I've ever read on here.
--UMC lawyer with kid in law school, surrounded by more of the same
That was me 40 years ago. Ended up with a career of 7 years in non profits and private practice, then 25+ as a federal legal attorney and managing attorney (environmental enforcement). So while I say be wary, and have, things can work out.
Anonymous
05/31/2021 08:35
Subject: Re:25 y/o $4M Net Worth-should I go to law school?
Anonymous wrote:Law school is a refuge for UMC kids who don’t know what else to do. Hard pass on it.
This might be the truest thing I've ever read on here.
--UMC lawyer with kid in law school, surrounded by more of the same
Anonymous
05/31/2021 08:30
Subject: 25 y/o $4M Net Worth-should I go to law school?
Anonymous wrote:NickScarfo wrote:Anonymous wrote:NickScarfo wrote:Anonymous wrote:No.
Assume 3-4% growth, not 6-7% to avoid unpleasant surprise (few good investment managers can credibly project 7% going forward)...
If I had $$$ BigLaw is the *last* place I’d want to be for 70-80 hrs a week.
3-4% for an aggressive portfolio? That sounds awful. My plan doesn't include any fixed income and may eventually incorporate direct investment alternatives along with equities.
Even 7% would typically be conservative for long run return on equities.
Not sure where your numbers come from...
PP here ... IMO your approach is wrong. You have way too long an investment horizon to go whipping it out on flyers and hyper aggressive portfolio choices.
If you want to have to go back to work when the next crash hits you, by all means do. But my approach saved me 50% of the losses, or more, that others had with aggressive approaches. It’s much harder to make it back after a big dip than it is to avoid biggest dips.
It’s your money. My approach got me to retirement early and I make more now than when I worked with no crazy risk.... 3-4% is the new 6% (return assumptions) for every prudent analyst I’ve read. Of course in recent years we’ve done much better but if your benchmark assumptions are too high you set up to fail.
As I understand it, longer investment horizon warrants a greater risk tolerance. I'm not living on any investment income and am looking for maximum growth.
I guess 3-4% return would make sense for an equity-based portfolio from which you were drawing down additional 3-4% in income. Otherwise, I don't see where you're coming from.
Well, I’m coming from years of experience in planning and seeing it work out. Currently ~50-60% equities ... if you go 100% equities only, then 6-7% is safe (as an assumption for planning, not sure you focus on what it represents- of course you may beat it) imo (and more important the more knowledgeable and experienced I consider).
If you’re ok with risking a huge % then that’s ok for you, just realize the downside.
Do you actually read advisory notes from the more reputable sources (eg Vanguard, Fidelity, Glenmede, T Rowe Price, etc)? It helps imo to calibrate where to be on the risk- reward scale.
In my case the delta in uncertain gain vs increased risk and risk of higher losses guided me, so, eg, when others lost 40% in big drops I lost “only “ 15-25%, while still getting strong gains in up markets. If you don’t care and are more willing to go bust, then season to taste accordingly.
I think my planned allocation is ~80% equities, 10% alts, and maybe 10% high yield bonds.
There's nothing wrong with a conservative allocation, but no advisor would suggest it for a young investor trying to maximize wealth creation. The longer your time horizon is and the less you rely on portfolio cash flow, the riskier your exposure can be.
A diversified pool of equities hedges against volatility while offering the opportunity for greater ROI, inclusive of downturns, than any fixed income-based portfolio. On this point, some of your ideas of what constitute gains and losses don't add up.
In a bad downturn, the only money lost is what you would have otherwise liquidated, but for the drop! Unrealized gains and losses are not gains and losses.
Look at the unlucky investor who dipped into the market just before bad events (1987, 2000, 2008, 2020) and stayed the course for a mere 5 years. They still would have made much better ROI than in a less "risky" fixed income allocation. I'd argue that the REAL risk is opportunity cost resulting from fear.
Since you mention Vanguard, consider what VFIAX (a lazy index fund) would have given you over the last 40 years! Much better than 6-7%, inclusive of every downturn. If you resist emotion and stay invested through dips, you won't lose over the long haul.
The bottom line is that your advice on exposure is better suited to someone dependent on portfolio cash flow and/or retirees than anyone else!
You have undoubtedly missed years of realizable stock market gains, bust years notwithstanding.
Anonymous
05/30/2021 17:39
Subject: 25 y/o $4M Net Worth-should I go to law school?
NickScarfo wrote:Anonymous wrote:NickScarfo wrote:Anonymous wrote:No.
Assume 3-4% growth, not 6-7% to avoid unpleasant surprise (few good investment managers can credibly project 7% going forward)...
If I had $$$ BigLaw is the *last* place I’d want to be for 70-80 hrs a week.
3-4% for an aggressive portfolio? That sounds awful. My plan doesn't include any fixed income and may eventually incorporate direct investment alternatives along with equities.
Even 7% would typically be conservative for long run return on equities.
Not sure where your numbers come from...
PP here ... IMO your approach is wrong. You have way too long an investment horizon to go whipping it out on flyers and hyper aggressive portfolio choices.
If you want to have to go back to work when the next crash hits you, by all means do. But my approach saved me 50% of the losses, or more, that others had with aggressive approaches. It’s much harder to make it back after a big dip than it is to avoid biggest dips.
It’s your money. My approach got me to retirement early and I make more now than when I worked with no crazy risk.... 3-4% is the new 6% (return assumptions) for every prudent analyst I’ve read. Of course in recent years we’ve done much better but if your benchmark assumptions are too high you set up to fail.
As I understand it, longer investment horizon warrants a greater risk tolerance. I'm not living on any investment income and am looking for maximum growth.
I guess 3-4% return would make sense for an equity-based portfolio from which you were drawing down additional 3-4% in income. Otherwise, I don't see where you're coming from.
Well, I’m coming from years of experience in planning and seeing it work out. Currently ~50-60% equities ... if you go 100% equities only, then 6-7% is safe (as an assumption for planning, not sure you focus on what it represents- of course you may beat it) imo (and more important the more knowledgeable and experienced I consider).
If you’re ok with risking a huge % then that’s ok for you, just realize the downside.
Do you actually read advisory notes from the more reputable sources (eg Vanguard, Fidelity, Glenmede, T Rowe Price, etc)? It helps imo to calibrate where to be on the risk- reward scale.
In my case the delta in uncertain gain vs increased risk and risk of higher losses guided me, so, eg, when others lost 40% in big drops I lost “only “ 15-25%, while still getting strong gains in up markets. If you don’t care and are more willing to go bust, then season to taste accordingly.
NickScarfo
05/29/2021 12:26
Subject: 25 y/o $4M Net Worth-should I go to law school?
Anonymous wrote:NickScarfo wrote:Anonymous wrote:No.
Assume 3-4% growth, not 6-7% to avoid unpleasant surprise (few good investment managers can credibly project 7% going forward)...
If I had $$$ BigLaw is the *last* place I’d want to be for 70-80 hrs a week.
3-4% for an aggressive portfolio? That sounds awful. My plan doesn't include any fixed income and may eventually incorporate direct investment alternatives along with equities.
Even 7% would typically be conservative for long run return on equities.
Not sure where your numbers come from...
PP here ... IMO your approach is wrong. You have way too long an investment horizon to go whipping it out on flyers and hyper aggressive portfolio choices.
If you want to have to go back to work when the next crash hits you, by all means do. But my approach saved me 50% of the losses, or more, that others had with aggressive approaches. It’s much harder to make it back after a big dip than it is to avoid biggest dips.
It’s your money. My approach got me to retirement early and I make more now than when I worked with no crazy risk.... 3-4% is the new 6% (return assumptions) for every prudent analyst I’ve read. Of course in recent years we’ve done much better but if your benchmark assumptions are too high you set up to fail.
As I understand it, longer investment horizon warrants a greater risk tolerance. I'm not living on any investment income and am looking for maximum growth.
I guess 3-4% return would make sense for an equity-based portfolio from which you were drawing down additional 3-4% in income. Otherwise, I don't see where you're coming from.
Anonymous
05/29/2021 11:13
Subject: 25 y/o $4M Net Worth-should I go to law school?
Shouldn’t be in quote...
PP here ... IMO your approach is wrong. You have way too long an investment horizon to go whipping it out on flyers and hyper aggressive portfolio choices.
If you want to have to go back to work when the next crash hits you, by all means do. But my approach saved me 50% of the losses, or more, that others had with aggressive approaches. It’s much harder to make it back after a big dip than it is to avoid biggest dips.
It’s your money. My approach got me to retirement early and I make more now than when I worked with no crazy risk.... 3-4% is the new 6% (return assumptions) for every prudent analyst I’ve read. Of course in recent years we’ve done much better but if your benchmark assumptions are too high you set up to fail.
PP here ... IMO your approach is wrong. You have way too long an investment horizon to go whipping it out on flyers and hyper aggressive portfolio choices.
If you want to have to go back to work when the next crash hits you, by all means do. But my approach saved me 50% of the losses, or more, that others had with aggressive approaches. It’s much harder to make it back after a big dip than it is to avoid biggest dips.
It’s your money. My approach got me to retirement early and I make more now than when I worked with no crazy risk.... 3-4% is the new 6% (return assumptions) for every prudent analyst I’ve read. Of course in recent years we’ve done much better but if your benchmark assumptions are too high you set up to fail.
Anonymous
05/29/2021 11:11
Subject: 25 y/o $4M Net Worth-should I go to law school?
Anonymous wrote:NickScarfo wrote:Anonymous wrote:No.
Assume 3-4% growth, not 6-7% to avoid unpleasant surprise (few good investment managers can credibly project 7% going forward)...
If I had $$$ BigLaw is the *last* place I’d want to be for 70-80 hrs a week.
3-4% for an aggressive portfolio? That sounds awful. My plan doesn't include any fixed income and may eventually incorporate direct investment alternatives along with equities.
Even 7% would typically be conservative for long run return on equities.
Not sure where your numbers come from...
P.s. imo you are also wrong not to have any fixed income, I have never gone all in or out in any one sector. I get your mindset, but looking back on my own investing history and how it worked out (and how others’ I know didn’t), I’m suggesting that you take a wider view unless you’re ok with it all going away more readily than might be the case with more diversification and less speculation.
PP here ... IMO your approach is wrong. You have way too long an investment horizon to go whipping it out on flyers and hyper aggressive portfolio choices.
If you want to have to go back to work when the next crash hits you, by all means do. But my approach saved me 50% of the losses, or more, that others had with aggressive approaches. It’s much harder to make it back after a big dip than it is to avoid biggest dips.
It’s your money. My approach got me to retirement early and I make more now than when I worked with no crazy risk.... 3-4% is the new 6% (return assumptions) for every prudent analyst I’ve read. Of course in recent years we’ve done much better but if your benchmark assumptions are too high you set up to fail.
Anonymous
05/29/2021 11:07
Subject: 25 y/o $4M Net Worth-should I go to law school?
NickScarfo wrote:Anonymous wrote:No.
Assume 3-4% growth, not 6-7% to avoid unpleasant surprise (few good investment managers can credibly project 7% going forward)...
If I had $$$ BigLaw is the *last* place I’d want to be for 70-80 hrs a week.
3-4% for an aggressive portfolio? That sounds awful. My plan doesn't include any fixed income and may eventually incorporate direct investment alternatives along with equities.
Even 7% would typically be conservative for long run return on equities.
Not sure where your numbers come from...
PP here ... IMO your approach is wrong. You have way too long an investment horizon to go whipping it out on flyers and hyper aggressive portfolio choices.
If you want to have to go back to work when the next crash hits you, by all means do. But my approach saved me 50% of the losses, or more, that others had with aggressive approaches. It’s much harder to make it back after a big dip than it is to avoid biggest dips.
It’s your money. My approach got me to retirement early and I make more now than when I worked with no crazy risk.... 3-4% is the new 6% (return assumptions) for every prudent analyst I’ve read. Of course in recent years we’ve done much better but if your benchmark assumptions are too high you set up to fail.
NickScarfo
05/29/2021 10:38
Subject: 25 y/o $4M Net Worth-should I go to law school?
Anonymous wrote:I think you need to figure out what you’d like to do with your life. You have the luxury of being able to do anything which is pretty cool. I wouldn’t do big law. I mean why work 50-70 hours a week when you don’t need the money. Once that time is gone it’s gone. I worked in big law for 8 years and have worked in the government for 4. I like my job but wish I could just be a mom for 5-10 years. If I inherited 4.5 million (I won’t) I’d buy some a couple of income generating rental properties and invest the rest fairly conservatively. You have the privilege of choosing how you’d spend your days. That’s pretty cool.
Barring debt service. how much $$ were you able to accumulate by grinding in Biglaw, if you don't mind my asking?
I wonder whether the incremental dollars would be worth the labor compared to what compound interest achieves on its own.
Also, do you know what median proft/partner typically is at V100 firms?
All the published figures are average profit/partner, which is statistically misleading!
Anonymous
05/29/2021 10:36
Subject: 25 y/o $4M Net Worth-should I go to law school?
You just said you don't want to practice law, why would you go to law school?
Anonymous
05/29/2021 09:48
Subject: 25 y/o $4M Net Worth-should I go to law school?
I think you need to figure out what you’d like to do with your life. You have the luxury of being able to do anything which is pretty cool. I wouldn’t do big law. I mean why work 50-70 hours a week when you don’t need the money. Once that time is gone it’s gone. I worked in big law for 8 years and have worked in the government for 4. I like my job but wish I could just be a mom for 5-10 years. If I inherited 4.5 million (I won’t) I’d buy some a couple of income generating rental properties and invest the rest fairly conservatively. You have the privilege of choosing how you’d spend your days. That’s pretty cool.
NickScarfo
05/29/2021 09:41
Subject: 25 y/o $4M Net Worth-should I go to law school?
Anonymous wrote:No.
Assume 3-4% growth, not 6-7% to avoid unpleasant surprise (few good investment managers can credibly project 7% going forward)...
If I had $$$ BigLaw is the *last* place I’d want to be for 70-80 hrs a week.
3-4% for an aggressive portfolio? That sounds awful. My plan doesn't include any fixed income and may eventually incorporate direct investment alternatives along with equities.
Even 7% would typically be conservative for long run return on equities.
Not sure where your numbers come from...
Anonymous
05/29/2021 09:24
Subject: 25 y/o $4M Net Worth-should I go to law school?
Anonymous wrote:Dear OP,
What you may want to study is how to wisely invest your funds for the long run.
I would recommend this site:
https://www.bogleheads.org/
https://www.bogleheads.org/wiki/Main_Page
Also, you can find there some good books to read on the topic.
Good luck and Best wishes.
Also Vanguard Advisor Online (I have no connection other than as a subscriber).
Anonymous
05/29/2021 09:23
Subject: 25 y/o $4M Net Worth-should I go to law school?
No.
Assume 3-4% growth, not 6-7% to avoid unpleasant surprise (few good investment managers can credibly project 7% going forward)...
If I had $$$ BigLaw is the *last* place I’d want to be for 70-80 hrs a week.
Assume 3-4% growth, not 6-7% to avoid unpleasant surprise (few good investment managers can credibly project 7% going forward)...
If I had $$$ BigLaw is the *last* place I’d want to be for 70-80 hrs a week.