Hi - dreaming of leaving corporate America

[Tracker]

Hello everyone.

I have been lurking for several weeks. I am a 40 year old woman, living in the midwest, married with no children.

I live in a mid-sized midwestern town. My husband and I are both law school graduates, although you probably would not guess this when reviewing our tax returns. It's been my experience that the general public believes that a law degree is the ticket to financial bliss.

I graduated from law school in the early 1990's The employment situation for the legal community at that time was dire, and competition was very steep for positions paying in the $30's minus healthcare benefits. (***I did not graduate from a "top law school", although it has a decent reputation) I could not find employment as a practicing attorney, and I had $38K in student loans that were expecting payment. I happily accepted employment at a major corporation in a quasi-legal environment. (my job does not require a law degree, although some of my co-workers do have a law degree others have other education) Since I have never "practiced law" my employment options at this juncture appear to be limited. I did pass the bar exam upon graduation, and I am licensed to practice in my state of residence.

My employer does offer a small pension, and I have been saving in my 401(k) plan for the all of the years of my employment. I am a saver, but I will readily admit that I do not have the level of sophistication for financial matters that I should. Husband is a year older, also working in a quasi-legal capacity with a 401(k) plan, but no pension.

I am majorly burnt out with my job.

I am looking for encouragement and direction. I am aiming to retire at 55. Without saying my salary, which is not very high, can someone review my assets and tell me if I am on track?

Here are my assets:

$29K employer sponsored pension
$167K my 401(k) plan (50% bonds / 50% stocks)
$90K husbands 401(k) plan (100% stocks indexed)
$21K emergency fund

Our only debt is our home. We owe $55k on our mortgage. Our home is worth approximately $160K - $170K. We drive old clunkers and live by the LBYM mantra.

Thank you for reading this. Please forgive the lack of specifics.

 

[Khan]

Will the pension be inflation adjusted?

Will there be Social Security in the future for either of you?

 

[Nords]

I am looking for encouragement and direction. I am aiming to retire at 55. Without saying my salary, which is not very high, can someone review my assets and tell me if I am on track?

Welcome to the board, Tracker.

An LBYM lifestyle is always the first step, but there are many ways to retire early.

Have you tracked your expenses and run a FIRECalc scenario?

 

[chinaco]

On the savings side... it seems to me that you have a good start. If you continue your LBYM lifestyle, save dilligently, and invest prudently (read diversified equity and bonds with periodic rebalancing)... You should be on your way.

Understanding your expenses and keeping them in control is the other side of the equation.

But just as important:
If you plan to work another 15 years and you feel like you are in a disatisfying dead-end job... Consider your options for another job. You have a good education. If you like the law profession, find another job in the field. If you do not like it any longer consider something else. You have a good education, you can leverage that to make a move into a different field.

 

[Tracker]

I typed in an incredibly long response and was timed out.

I don't know if my pension is adjusted for inflation. I really need to become better educated on financial matters.

We have 4-5 years left on our mortgage (we are paying $1500/month, instead of $1200/month - so we will pay it off in under 15 years). We are both eligible to receive social security.

I am terrified of being unemployed. My father was laid off (union steel worker) when all three kids were attending college in the 1980's. The fear and insecurity that my family suffered through had a lasting impact on me. Personally, I think the economy is terrible right now for professionals. I know of several people that were downsized over a year ago and have yet to find decent employment. I know of several attorneys that are not making decent money at all. Others are doing very well.

I could live on $25K/year if my home was paid for easily. (if I had affordable healthcare)

I contribute approximately $15k/year to my 401(k) and DH contributes about $8K to his.

 

[mb]

Hi Tracker,

I think you are doing well.

(1) You have a little more than $300k and that will grow to $500k in today's dollars in 15 years for a real return of only 3%.

(2) At your current rate you will invest another $300k over the next 15 years. (I don't recall the equation to calculate the present value of an invest stream. You can look it up and do it.)

(3) You will invest another $200k if you direct the savings after paying off your mortgage. (Ditto comment from #2.)

So in 15 years you should have > $1M.

My suggestions:

(1) Start tracking expenses. Verify how much you really need?

(2) Learn about investing. The Four Pillars of Investing by William Bernstein is recommended.

(3) Become familiar with and use FIRECALC.

(4) Try to do something about the "stress" from your current job situation. Fifteen years is a long time if you are "burned out."

(5) If possible max out DHs 401k.

(6) If possible, start investing after tax (maybe the mortgage money?). If you want to retire at 55 you will want some after tax assets.

It sounds like the economic situation in your community may be contributing to your stress? Is this one of those mid-west industrial cities that has never really adjusted to losing it's manufacturing base? Would you consider moving? You may be able to make more money but your expenses may go up also.

MB

 

[Tracker]

MB: thank you so much for the thoughtful reply.

You hit the nail on the head with the description of the community. There really is limited potentional in the area I reside. However, the cost of living is so very, very, low. My commute is 10 minutes from my home. My home is 4 bedroom/2 bath nice suburb. [I also have 5 weeks paid vacation, will be 6 next year] My standard of living is generally high. It's very high compared to what I grew up with........

Part of the stress reduction for me is knowing that I have options. I am working on some other avenues as well. I have this hovering fear of being poor. I read that many women feel the same way, the number one fear is that they will end up homeless. I wonder if that is true, probably another thread/discussion.

You are right, DH should be contributing the max allowed to his 401(k). I am going to have to convince him of that.

Thanks again - I knew there were nice people on these boards.

 

[Tracker]

http://www.washingtontimes.com/national/20060823-122252-7667r.htm

I am not alone

Nearly half of women fear life as a bag lady
By Jennifer Harper
THE WASHINGTON TIMES
August 23, 2006


They may have money in their purses and a decent salary, but many women fear they'll lose their income and end up a bag lady, forgotten and destitute.
A "startling" 90 percent of women say they feel financially insecure, according to a survey of almost 1,925 women released yesterday by Allianz, a Minnesota-based life insurance company.
Almost half are troubled by a "tremendous fear of becoming a bag lady" -- 46 percent of women overall, and 48 percent of those with an annual income of more than $100,000. An additional 57 percent are sorry they had not learned more about money matters in school.
Such concerns foster an array of behaviors and thoughts.
Women, for example, are twice as likely as men -- 18 percent to 9 percent -- to set aside a secret stash of money, the study found. Roughly the same number counseled their daughters to do the same. And the feminine thrill of shopping took a back seat to practicality: Two-thirds said the best thing about having money is the feeling of security it brought them, rather than buying power or status.
"They want to know they can handle what might lie in front of them," said Ken Dychtwald, a gerontologist who consulted on the project.
Women have made substantial financial progress, the study said, noting their median income has increased 60 percent in the past three decades. They are expected to control 60 percent of U.S. wealth by 2010. Half of all stock market investors also are women.
And yes, men and women have different attitudes about money, which often spawns disagreements between the sexes. Women, for example, think financial arguments revolve around "power and control" while men say it's a matter of trust.
Are American men unnerved by financially independent women? Not likely. According to a related Allianz poll, more than 90 percent found such a quality to be "sexy."
Both polls were conducted May 4 to July 5, and have a margin of error of two percentage points.
Meanwhile, "the adage of 'marrying well' no longer works," the study states.
Indeed, only 8 percent of female respondents said they hoped a man would solve their financial woes. More than one-third considered themselves financially competent, almost a quarter said they had a financial partnership with their spouse and 18 percent said they felt financially "empowered." But 18 percent said they were confused and worried by money.
"Money fears of women are complicated. They fear failure, or making mistakes. They fear they are expendable. Their fear of being poor, however, has topped the list for two decades," said Judith Briles, a Denver financial adviser and author of 23 books on money management.
It seems an ingrained girl thing, though.
"Bag lady syndrome is a fear many women share that their financial security could disappear in a heartbeat, leaving them homeless, penniless and destitute," MSN money columnist Jay McDonald wrote in January. "Lily Tomlin, Gloria Steinem, Shirley MacLaine and Katie Couric all admit to having a bag lady in their anxiety closet."

 

[chris2008]

Hello Tracker,

As you mentioned to be in the LBYM style, you might also enjoy the www.slnet.com pages, mainly the forums. Some of it is based on the book "Your money or your life" by Robinson/Dominguez but no problem if you have not read it.
The investment ideas (bonds only) of that book are not totally my cup of tea, though.
I got from it a sense that ER is doable for DH and me if we do the steps. Then I found this forum and combined the ideas from both. We will probably be there between 2008 and 2010 at age 51 / 57 (+-1).
I am a legal counsel in the corporate world, so your comments are familiar to me...
Burnout is not unusual, so you need to develop a perspective and a support system.

Take care,
Chris

 

[DRiP Guy]

Tracker,

You might reflect back on what led you to get a law degree. If it was family pressure, or tradition, that's not too much help.

But was it because you wanted to help the downtrodden? Wanted to orate in front of a crowd? Wanted to passionately argue until your precise verbal skill and wit had worn down all opponents and won the day? Was it the dream of big bucks?

If you can reconnect with what it was that made you stick through school all the way to that degree, that might be a beacon to redirecting your new career.

One field I know where you might think of being able to rely on your schooling, but without having practiced, is if you were to join a Regulatory Affairs Dept at an aviation company, or a medical device firm, or other regulated industry.

Of course, that may be just exactly what you are running from!

 

[uncledrz]

Tracker
I am an attorney and have been for a number of years. I know many people who have legal degrees and work in related fields but are not actually in the practice of law. I also know many people that have come into the law latter in life. If you are still interested in the practice of law, take a shot at it. The local prosector's office is a good place to look as you'll get quite a bit of in court experience. Also try the State. Another option is to try and connect with a civil practice attorney who may be looking to retire in a few years. Sit down for lunch with the local bar president, ask who might be in that situation, and then call up and see if you might not fit with that person (i.e, if not a job, ask about office space/occasional clerking, spill over work, all of which may lead to a job and eventually taking over the practice).
The practice of law is often high pressure, often frustrating, but rewarding as well.
Might be worth a try.
Tio z

 

[CCdaCE]

I just ran across this book yesterday. Cordell Parvin, a lawyer specializing in Construction/Contract Law, I think.

Say Ciao to Chow Mein

<The above site> is aimed at law school students and young lawyers striving to mesh their reasons for becoming lawyers with their reasons for remaining in the profession.

Although not aimed at senior lawyers and partners, the book would be valuable reading for anyone interested in the lessons I've learned (and taught) during my thirty-four years of practice:

Focused goals are critical to success.
Goals are more easily achieved when they align with passion, purpose and core values.
Provide value to a client, and the money will follow.
Mentoring and regular feedback engages and energizes young lawyers.
It is better to nurture internal motivation than manufacture external motivation.

Notice the "articles link" on right side of the page, too. There's a couple worth reading.

I have nothing to gain from you buying this book, just ran across it yesterday and thought I'd pass it along.

He says it could be applicable to other professions... I guess I can see the link since it's pretty general advice... His website was in an engineering magazine I was reading.

-CC

 

[Tracy42]

Hi Tracker, Welcome!

I too am an attorney (married to an attorney) living in a smallish midwestern city. We graduated law school in 1987. I went directly into corporate law, then transitioned to management. My husband has his own law practice.

Have you considered joining your local Bar Association (if you haven't already) and doing some networking? I second what Tio z said, in that there are a lot of solo attorneys out there (my husband included) who are looking to downshift their practice and would welcome a (hard working, reliable, more mature) attorney to train and eventually become partners with/sell their practice. You can still make good money in the practice of law, and from what I've experienced with my husband's practice (social security disability) there is a whole lot less BS than at mega corp. Tracy

 

[Tracker]

Thank you for the thoughtful replies.

It would be so great to leave behind the corporate BS. I really need to explore what options are open for me at this point. I can't remember why exactly I decided to go to law school, probably because I thought it would be a nice secure, prestigious career. That thought rings a bell. I know that I wanted to obtain the American dream. I've made a lot of decisions in my life/career based upon vague notions of what I thought the output would be. (rather than concrete facts, or deep instrospection, or research)

I did enjoy the course work in law school and thought it was interesting. My deciding factor on choosing a career after law school was who was willing to give me a J O B offer, and would it be enough money to survive. After living the poor student life for 7 years I wanted to be able to fill my gas tank and pay for an oil change. Fourteen years later.............I am still there.

I read a book once, "Die Broke"............ I thought it was terrible and I disagreed with everything in between the pages.

There was one thing in the book that stuck with me though. It said (and I am paraphrasing here - I read a ton of books, I hope I am remembering the correct book title, that would be embrassing, but I think that was the title 8) )...............................

The book said...... that not everyone can be a social worker or some do-gooder type of job. It's unrealistic to believe that you can "do what you want and the money will follow" . The world would just not function.
In other words, you are working for money and your goal is to maximize your mone, not be happy. Happy is something you do on your free time.

I'm rambling here, but I need to do some career self-reflection.

 

[Cut-Throat]

I read a book once, "Die Broke"............ I thought it was terrible and I disagreed with everything in between the pages.

There was one thing in the book that stuck with me though. It said (and I am paraphrasing here - I read a ton of books, I hope I am remembering the correct book title, that would be embrassing, but I think that was the title 8) )...............................

The book said...... that not everyone can be a social worker or some do-gooder type of job. It's unrealistic to believe that you can "do what you want and the money will follow" . The world would just not function.
In other words, you are working for money and your goal is to maximize your mone, not be happy. Happy is something you do on your free time.

I'm rambling here, but I need to do some career self-reflection.

I checked out the same book at the library, and you are correct, it was pure self-engrandizement drivel. I thought there would be some well- thought out plan to use up your assets while you are alive. No, this book claims jobs are miserable, don't try to find happiness in them. But, then goes on to say that you should work the rest of your life and continue to spend money. :

The guy gives advice on everything. Some, I could tell, he had absolutely little little knowledge of. I think the guy was a lawyer!

Can you tell us what state you reside in?

 

[shiny]

Welcome Tracker! I graduated from law school around the same time as you I think, but I did practice. I'm glad not to have to do it anymore.

I just wanted to tell you that I really understand the bag lady fear, I've had it, but I don't now. I know this sounds crazy, but once I got a fortune cookie that said "relax, you will always have everything you need," after that I started studying some psychological and philosophical literature and really came to believe that I could provide for myself no matter what (having that nest egg helps!)

I second getting your DH to max out on 401k, even if he doesn't put it all in stocks, the deduction and tax-free growth can really make a difference. IMO this should take precedence over the mortgage pre-pay.

 

[Tracker]

I live in the midwest, some may say East. I'd rather not say the state.

My job is adminstrative/regulatory type deal.

That's an interesting thought on the mortgage pre-pay. DH and I are going to have to discuss that one. He thinks we are doing great, and I guess in some ways were are (compared to the general public) ............. and in a lot of ways we could do better (compare to the people on this board - wowie)

I like reading this board. It keeps me from feeling smug and complacent.

 

[shiny]

He thinks we are doing great, and I guess in some ways were are (compared to the general public)

You are! Keep it up!

 

[Telly]

I read a book once, "Die Broke"............ I thought it was terrible and I disagreed with everything in between the pages.

There was one thing in the book that stuck with me though. It said (and I am paraphrasing here - I read a ton of books, I hope I am remembering the correct book title, that would be embrassing, but I think that was the title 8) )...............................

The book said...... that not everyone can be a social worker or some do-gooder type of job. It's unrealistic to believe that you can "do what you want and the money will follow" . The world would just not function.
In other words, you are working for money and your goal is to maximize your mone, not be happy. Happy is something you do on your free time.

This caught my eye... A neighbor where I used to live worked at a gov't. job. It was incredibly boring. He did the same thing day after day after day, year after year. Benefits were very good, pay less than private market. Pension plan good. He stuck it out, got all of his enjoyment of life outside of work. Made his peace with the situation. Figured (correctly) that the pension would be there as-specified when he retired. It was, and he is!