I agree, there are plenty of really good responses here. I was pointing out that I asked for opinions not advice to the poster quoted.

 

Well I have an advanced degree, and kids, and I'm not a pro athlete or entertainer. Yeah, we'll just have to agree to disagree. And I won't tell my sister that it was impossible to work her way through law school; it could turn into an Inception meets the Matrix moment for her.

The mistake many people make is paying way too much for their degree in order to get a certain school on their degree, only to find out later it doesn't mean as much as they thought it would. That and getting advanced degrees in fields that just will never pay off, even in the best of times.

I know plenty of people that were very financially successful by 40, even while raising kids and the like. They tend to be smart, hard workers who made good decisions. Funny how that last part seems to be highly correlated with financial success.

You do know that a successful accountant or lawyer can make Partner by around 35 and be pulling down $750-$1 million a year, give or take, right?

 

We actually agree on a lot. Hard work, smart decisions, etc. The dollar amounts for accountants and lawyers are also on the very high end of the spectrum. This is not typical. I am an Anesthesiologist. Top earning Surgical Dermatologists and Spine Surgeons make over $2M annually, but most physicians earn in the $250-500k range. From what I know, most accountants are in the $100k range, and most lawyers in the $200k range. Averages can also vary significantly between median and mean, and there are always extreme outliers. The average NFL salary is about $2.5 million. The highest is about $35 million....a 14-fold difference. As has been pointed out also, where you live makes a huge difference....We own 3 homes for the cost of one high-end NYC apartment.

 

One of my good friends worked through law school, and he went to a tier 1 school and graduated in 2 years. It's possible.

 

A lot is possible, but not typical, even for high achieving professionals.

 

I just turned 42 and I usually like to keep about 3 years of operating cash on hand in a bank account. I’m not talking about retirement accounts or money market accounts. Many would argue that’s more than I need like my CPA always tells me, but it helps me sleep at night. Who knows where this economy is going to land once we are allowed to open. And I have several colleagues that have about 3 months worth of burn rate that are pulling their hair out stressing that we bounce back quickly (and I do pray that is the case).

Personally, I would never put my families well being in a potential financial jam over a car. And I love cars. I’ve been thinking the 992 RS is set to come out in a year or two and if we are still in the weeds I have no qualms letting it go as much as I know I will love the car, I love my family more. Plus, I’m fortunate enough that I already have some pcars to keep me entertained. But a car is a car, if you can afford it, buy it. If it will possibly put a strain on you financially wait until things are better. Good luck with your decision making!

 

I agree that it's not typical, but it's not because people can't do it. It's just a matter of having good time management skills. Law school isn't like med school where you guys have rotations. In my opinion, law school is a lot easier than medical school. My brother is also an anesthesiologist, and I went to a tier 1 law school.

 

Would it be fair to say that memorization skills benefit you more in Law School than in Medical School?
That's my observation, but I couldn't even get into a Tier 4 Law School.

 

I think the correct cash allocation is highly dependent on the risks you personally face. If I was well established in a stable career, I'd be much more comfortable with less cash. If I ran a highly leveraged business in a risky industry, I'd want more.

One thing that our family does is put our entire anticipated annual spending in our bank account at the beginning of the year (technically, we deduct out large end-of-year expenses like property taxes and make some adjustments for pre-tax benefits accounts). We then spend from that account, while directing income to other accounts. This makes it easy for us to track whether we are sticking to our budget. If it's 6 months into the year, and we have spent more than half the money in our checking account, we should maybe pull back a bit. If we spent less than half, we are doing well. We have used this system for many years to track our spending, but it also doubles as an 'emergency fund' most of the year.

We also have a convention where if our actual income exceeds our budgeted income, we put 1/2 the after-tax excess towards retirement, and 1/2 in a virtual "bonus discretionary" account which we track in a spreadsheet. If we go over our budget for the year, or splurge on something special (say a sports car) we deduct it from our bonus discretionary account. The bonus discretionary account really helped my wife get behind the notion of saving our excess income, since we are dedicating half of it to future fun spending. Right now, we have about $270k in our bonus discretionary account, but we have spent a good amount from that account over the years on fun stuff, and annual budget overages related to major home repairs, etc.

We also have much larger retirement savings, and some of our retirement allocation is to bonds. During this period, I have shifted some of the bonds into shorter-term federally insured funds, which makes me feel more secure. If you count that shift, we probably have about 5 years of annual expenses in cash or short term bonds right now, and another 5 in slightly riskier bonds. If we lost all our income, I think we could go 10 years easily without touching our stocks. Our retirement funds are still over 75% in stocks though (just because I don't know how to time the market, and retirement is at least 20 years off for us).

To come back to your question, maybe the idea of keeping 1 year in cash as a reserve/budgeting tool, and/or of buying a GT4 from a 'bonus discretionary' account populated with excess income/savings from an annual budget, might be helpful...



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I think both require good memorization, but I'd probably guess that good memorization is more important for med school. Law school tests are typically about issue spotting, so you just need to have maybe 10-20 legal principles memorized for the exams. The hard part is knowing how to apply the legal concepts to the fact pattern. I know memorization is certainly more important for the MCAT versus the LSAT. The LSAT is essentially a speed logic test and is not that hard if you were to have unlimited time. The MCAT is a knowledge-based test from my understanding.

 

1st couple yrs of med school heavy on memorization. Not much logic or principles to be applied to anatomy or biochemistry. But once beyond that, it's almost 100% manipulation of an acquired toolset. I knew a handful of people who kicked butt the first two years, and then couldn't actually be a doctor no matter how hard they studied. They had no ability to apply the tools they'd worked so hard to memorize. Also saw plenty of the flip side- lots of folks had trouble with the rote memorization but then once they had the tools they did fine at working with them.
I think the second scenario is more common.

 

This is similar to the CA (CPA in US) designation process. First bit is learning the rules, which anyone can do tbh because it is just memorization. It's not difficult. The trick is being able to apply in "real world" situations. If you can't do that, you're not passing the final no matter how "smart" a person is. Then you have to be prepared to work like an animal (and get paid like one) for the first three years of your career. At least this is how is used to be...I've heard they had to soften the process quite a bit recently so they don't break the new batch of snowflake millennials currently being put through the paces.

FWIW, I was able to work full time during both the university and articling "study" portions and pass and I am no Mensa candidate. Just requires discipline and good time management.

 

Yup. In fact, a guy who was near or at the top of my med school class after the first two years was actually an MD/PhD. He ended up leaving clinical medicine entirely to focus on research. Couldn't practically apply what he had learned and really struggled in his clinical years.

 

When my daughter complained about the smart kids in class, back when they had class, we had conversations about what it means to be smart. Does it mean one memorizes stuff easily? Does it mean you manipulate tools well once you've learned them? Does it mean you're insightful and work well with people? Does it mean you're creative? Or does it mean you have the foresight to pick a job where you don't have to deal with other humans? All represent a different kind of smarts, I suppose.

 

Some replies in here make it seem like it’s so easy to be a multi millionaire. Just work hard and be smart! There are sooo many factors that go into finding financial success only part of which is hard work and smarts. Being in the right place at the right time is equally if not more important from my experience.