MtoM #35 - The Attorney Millionaire

This is the White Coat Investor Podcast. Milestones to celebrating stories of success along the journey to financial freedom. Here is your host, Dr. Jim Dali. This is Milestones to Millionaire podcast number 35, the Attorney Millionaire.

No more wading through dozens of books at the library, scrolling through hundreds of blog posts on dozens of blogs, or checking in daily with online forums, trying to gain a financial education the way the hobbyists do for a fraction of the price of hiring a professional financial planner. The Fire your financial advisor online course will take you from feeling anxious and having no plan to having a written financial plan. You can follow the rest of your investing career as a professional and a retiree. This course is the material that should have been taught to you in college, medical school, or residency, but never was. Fire your financial advisor also has a version eligible for CME credit. Get your financial life in order today. Go to whitecoatinvestor.com courses to sign up.

You can do this and the White.

Coat Investor can help.

This is a podcast where we take your inspiring stories and the milestones that you've accomplished and celebrate them with you and use them to inspire your colleagues, your trainees, and everybody in whatever profession they're in to try to accomplish those same milestones. If you'd like to be on the podcast, you can apply@whitecoatinvestor.com milestone and we may have you on this podcast to celebrate your milestone, whatever it might be. Maybe it's paying off student loans, maybe it's getting out of debt, paying off a mortgage, getting back to broke, becoming a millionaire, becoming financially independent, whatever it is. This is your chance to come on and we will use your story to inspire others. We have a special guest today, an attorney that's become a millionaire. Let's get this attorney on the phone. All right, we have our guest today. Our guest today is an attorney. This is Paul. Welcome to the Milestones to Millionaire podcast.

Thank you very much. It's great to be on.

I understand you are a millionaire, is that correct?

Yep, that's correct. A little bit more than that, but yeah.

All right, well, tell us about your profession and how far you are out of school.

Yeah, so I'm an attorney. I'm sure other attorneys listen to your podcast, but I find it very relevant and you know, 95% of the content is is great for us even if we're not in the medical field. So thank you for that. I'm a transactional attorney. I practice in the area of commercial real estate. I work at a kind of medium to large size firm in The Midwest. And I've been practicing law for about eight years now.

Eight years. And what's your approximate net worth?

So I should say. My wife's also an attorney, so we have a dual income and we're at about 3.3 million, a little over that right now.

Awesome. Congratulations on that.

Thanks. Yeah, it's amazing. I never expected to be where we're at. So we feel very fortunate.

How do you divide that up? How much is home equity, how much is investments, et cetera?

Yeah, so that doesn't include our home equity. We own a townhouse which is actually structured as a cooperative, which is kind of rare. It's similar to a condominium. So we own that free and clear. It's actually kind of hard to get financing for them. And we bought it pretty inexpensively in 2013 when home prices are much lower than they are now. So yeah, that number is all investments. It's about one third in retirement accounts, about 2/3 in outside of retirement accounts. Taxable brokerage account, and it's pretty much all index funds of one sort or another. About 75 plus percent equities and about 20% in bonds and a little bit in gold and REITs.

Now I'm kind of surprised. I was expecting a commercial real estate attorney to have a real estate empire. No real estate investments. Why is that?

That's correct. Yeah. Not that I'm opposed to it, it's just it's my profession, but I don't have a hands on role in real estate projects. But I think it's a great addition to one's portfolio and not opposed to it at all. It's just not something I personally have besides our house.

Okay, so eight years out of school, what's been your range of income throughout your career?

So like I said, my wife's an attorney as well. So our first year out of law school, I think combined we were making about 250 and it's gone up pretty steadily since there. In the last two. Two years we've been close around 600 combined and I don't really see it going much higher than that. So we've had a healthy income and that's been really a big. That's really been kind of what's gotten us to where we are now.

And at what point do you think you hit millionaire status? Was that four years in, five years in?

I think it was about four years. Yeah. Right around then.

And what were your secrets to success?

You know, it's just everything you talk about on your podcast, Jim, it's I don't think there's one secret. It's getting started early was helpful. We started Roth IRAs pretty early on, before law school and just contributing steadily, trying to be aggressive and saving as much as you can, really just living below your means. We could spend a lot more money than we do. We're comfortable not spending more than our peers, especially in the legal industry. Avoiding lifestyle inflation, I think is really key to building wealth. So I think that's it. Just investing consistently whenever you can, whenever you have money, throwing it at index funds, loving the stock market, do the work for you.

Do you think most people you work with would be surprised by your net worth?

Maybe, yeah. I mean a lot of lawyers have a lot of a student debt. My wife and I were fortunate enough to have scholarships, merit based scholarships throughout law school and we didn't have student debt. And a lot of people just spend a lot of money, I mean housing, cars. Especially in the legal industry, there's a lot of pressure to kind of keep up with the Joneses and kind of live like your clients, which we make.

Good money but not as much as the clients.

Depending on the client, but yeah.

So what do you think your savings rate was on average over those years? Years. Were you saving 40% or 50% of your gross income? What do you think it was?

I don't know, I've never tracked that number specifically, but I mean we save a lot. So yeah, I wouldn't be surprised if it was around 50% or so. And the more you make, the higher it is easier it is to get that rate up.

What do you think you guys were worth when you came out of school? You had a little bit of investing money and it doesn't sound like much. Student loans?

Yeah, very little. We both worked for a couple of years before law school. They didn't make much at all really. Enough to kind of carry us through law school with the scholarships. And then, you know, in the law school you work during the summers, you make a little bit money there. Basically, you know, this was kind of coming out of the Great Recession. Job market was pretty bad and we basically had enough in savings to get through law school. I think we might have had $100,000 to our name out of law school, which we used most of that in our house. And so we were pretty much starting at not at zero, but close to it out of law school and then.

Yeah, still beat starting at minus 400,000. Right. I mean that's a pretty good head start.

Yeah, for sure. We were really fortunate and we went to a smaller regional law school. My wife, for one, could have got into a more higher ranked, very highly ranked law school that I did not get into. And she. She could have gone there and got an even with a 50% scholarship which was offered there. It was, you know, she would have had six figures for sure, and student loan debt. We both chose to go to the same law school regionally where we were competitive, given our academic qualifications, and we got scholarships to cover everything. It was great.

None of this is from an inheritance, though.

I inherited about 10, maybe $20,000 from grandparents. That was early. My early 20s. So small amount.

That's when it's most useful, though. Of course.

Yeah, definitely.

So it sounds like you guys are on the same page when it comes to money. How did you guys get there?

Yeah, absolutely. I mean, that's so key to have your spouse on the same page as you and being sync in terms of spending decisions. I think we had some early conversations early in our marriage. I discovered the Bogleheads pretty early on, and I was really into them. And I credit the Bogleheads a lot with just teaching me about investing and giving me the confidence that it's really not that hard. You can do it yourself. And I would just talk to her about it, and she wasn't quite as interested or as enthusiastic as me, but she's very much on the same page and in agreement. And we have similar spending habits and I don't know, I guess you got to find someone who's. Who shares the same values as you and ideas around money. It's absolutely critical.

Now, I haven't heard anything about any debt. Do you guys have any debt at all?

No, we don't. Just credit cards that we pay off every month.

Okay, so there's some people out there who are a decade behind you. They're getting ready to graduate from law school or they just graduated from law school and they want to get where you are eight years from now. They want to have $3.3 million. What advice do you have for them?

You know, again, I think it's everything you talk about in your podcast. Live below your. Like you say, live like a resident. Well, we don't have residency, but with like a law student, I guess. Get started as soon as you can. Invest as much as you can. Be conscious of your spending and live below your means. When we get. When you get raises, invest it. Invest in index funds. Be as aggressive as you're comfortable with and really does add up over time. Not too long.

Really awesome. Well, it's very inspiring. Here you are, an attorney less than 10 years out of school, a multimillionaire, and you did nothing complicated, Right? All you did is typical attorney track earning and, you know, saving a whole bunch of your money and investing it in boring old index funds. I mean, that is a completely reproducible path for any other attorney. And so it's super inspiring just to show what can be done. I mean, even if somebody is not married to another attorney or they come out with a little bit of student loans or whatever, right? So what? So they can only get to be, you know, 2 million by eight years out. Right. I mean, it's just pretty awesome. Just to show how easy it is for anybody to do this that has gone through the trouble and has the discipline it takes to get through law school. So I think that's pretty awesome. And congratulations to you on that.

Thanks a lot. Yeah, no commercial real estate holdings needed.

Awesome. Well, thank you so much for being on the Milestones podcast.

Thanks for having me.

All right. Boring old boglehead investments, high savings rate and a reasonably high earning career. That's all it takes to become wealthy. And you've already done 90% of the work by the time you get through your training. The rest is relatively easy. All you have to do is turn that high income into a high net worth.

No more wading through dozens of books at the library, scrolling through hundreds of blog posts on dozens of blogs, or checking in daily with online forums, trying to gain a financial education the way the hobbyists do, for a fraction of the price of hiring a professional financial planner. The fire your financial advisor online course will take you from feeling anxious and having no plan to having a written financial plan. You can follow the rest of your investing career as a professional and a retiree. This course is the material that should have been taught to you in college, medical school, or residency, but never was. Fire your financial advisor also has a version eligible for CME credit. Get your financial life in order today. Go to whitecoatinvestor.com courses to sign up. You can do this and the white coat investor can help.

Keep your head up, shoulders back. You've got this and we can help. We'll see you next time on the Milestones to Millionaire podcast.

My dad, your host, Dr. Dahl, is a practicing emergency physician, blogger, author and podcaster. He is not a licensed accountant, attorney, or financial advisor. So this podcast is for your entertainment and information only and should not be considered official personalized financial advice.