A lawyer who makes $200,000 per year recently asked Dave Ramsey for advice in a published YouTube Short. The lawyer explains that he has $88,000 in debt and feels confident about paying it off, thanks to what he learned from Ramsey. However, he doesn’t enjoy his job and feels stressed about the hours. He’s competent at his job, but I’m wondering how long he should stick it out for his finances.
I’ll share my thoughts, but it is always good to speak with a financial advisor if you can.
Start Off By Paying Off the Debt
The lawyer should keep their job, for the bare minimum, until he pays off his debt. While the lawyer shouldn’t rush to leave his job upon becoming debt-free, he should treat it as a mandatory benchmark. Leaving the law firm before paying off debt gives the remaining balance more time to compound as the lawyer looks for a new job.
It’s also possible for the lawyer to end up in debt again if he leaves the law firm shortly after paying off all of his debt. While strategies like picking up a side hustle and developing new skills can come into play for some professions, it’s more difficult for this lawyer. He’s working 80 hours per week and still has to sleep and attend to his relationships.
Consider Your Long-Term Financial Goals
The lawyer should set long-term financial goals, such as how much money he needs to retire. Another big factor is how many children the lawyer wants to have. Your cost of living will look very different if you raise one child compared to raising four children.
Working longer at a job with a high salary can help you support a larger family. However, not everyone knows how large they want their family to be. Some parents who only intend to have one child may want a second or a third child after having the first one. The more money you make now, especially before having children, the easier life gets in the future.
It’s also good to consider how much of a pay cut the lawyer will have to take to become a government prosecutor. If lawyers save and invest enough money, they can take a pay cut while having a similar quality of life. Living below your means and staying that way will offer more flexibility when the lawyer decides to switch careers.
Listen to Your Body
During some “seasons,” people have to endure more stress than they would like to achieve their long-term goals. While young people have more energy to pursue rigorous careers, you have to listen to your body. Health problems can shorten your life and prevent you from using all of the money you put into your nest egg. Some people make millions of dollars in high-stress corporate careers only to pass away at young ages without having touched their fortunes.
The young lawyer understands stress, but if the lawyer’s health declines, he should start looking for a more flexible opportunity. It takes a lot of ambition and a strong mental to get as far as the lawyer has come. The lawyer should remember this about himself when the time comes to leave the law firm and look for a more flexible career. Paying off debt, knowing financial goals, and listening to the body can help the lawyer know the optimal time to make a switch.
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