Law school debt (check), debt paid down (check), retirement (...)

[WhatsinaName]

Law school (check), debt paid down (check), retirement (...)

Hello,

I'm 29, a lawyer making ~$100K, just paid off all of my debt, have ~$20K in retirement (Roth IRA and SEP-IRA) and want to begin my journey toward financial independence and retirement. Fortunately, I love my work and working (sure, I may change my tune after a decade or two), so may not ever formally retire. But I would like the option to.

Goals: purchase a new car (my 200,000+ mile Honda is nearing the end), purchase a house (in the SF Bay Area, no less) and save for big life things (wedding, kids, retirement).

Since I just paid off my debt I am just beginning to put money into savings, but am more intrigued by investments. That said, I desire a certain amount of liquidity, should opportunities present themselves for a car or house.

I would love some feedback or referrals to certain threads on (a) the best approaches to planning long-term, (b) the right balance of savings v. investments given my more immediate desired purchases and (c) anything else you can suggest!

Looking forward to getting to know you folks.

 

[racy]

Hi Whats,
Let me introduce you to the Bogleheads (followers of Jack Bogle):
Bogleheads Investing Advice and Info
Check out the tabs on that page: Forum • Wiki • Blog • Investing Philosophy

 

[WhatsinaName]

Wow, what a resource. This could keep me busy for days -- strike that -- years. Thanks, racy.

 

[someguy]

Welcome to the forum. The Bogleheads is good advice. I would also suggest figuring out your priorities and using those to guide where money goes. Given everything, your net worth position is pretty good, but your household income is relatively modest for where you live so you may not be able to hit everything in the near future.

You didn't mention an emergency fund. If you don't have one, I would suggest trying to build that up. This could also be a pot for a replacement car and/or a house. If your employer matches the SEP-IRA, I would also be sure to contribute enough to get all that free money.

I'd also consider if you could get by without a car and if not, look for something very inexpensive that just gets the job done.

 

[dallas27]

Honestly, considering your profession and locale, i think your goals should be to increase your income( but maintain you expenses) you should be able to at least double your income.


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[Milton]

Congratulations on retiring all your student debt. Well done!

Since I just paid off my debt I am just beginning to put money into savings, but am more intrigued by investments.

As someguy suggests, it would probably be prudent to first build up an emergency fund (say, equal to three months' earnings) before working on a long-term investment portfolio. In the meantime, you can do some reading to educate yourself about the different investing options available to you.

I desire a certain amount of liquidity, should opportunities present themselves for a car or house.

Cars and houses are fungible, thus always available to purchase at market prices. You can set your own schedule and don't have to worry too much about putting cash aside just in case you find a 'deal'.

Honestly, considering your profession and locale … you should be able to at least double your income.

While many San Francisco lawyers make well over $200,000, some make much less.

The OP's ability to easily double his or her employment income should not be presumed.

 

[dallas27]

The OP's ability to easily double his or her employment income should not be presumed.

Not presumed, it should be his goal. It's attainable in the market, and career decisions should support this goal. Further, net savings over the next 5-10 years will have a greater impact than the rate of return. Therefore the focus of the op's goals should be maximizing the potential income while maintaining expenses. Side gigs even.


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[Milton]

Not presumed, it should be his goal.

Goal is fine. I was misled by your comment that s/he "should be able to at least double" his or her employment income.

It's attainable in the market, and career decisions should support this goal.

Any meaningful discussion of market rates and opportunities for junior lawyers necessarily requires a knowledge of the OP's specific practice area (unspecified in the original post).