Finances can be a tricky area for lawyers, despite their potential to earn a high income. Many new lawyers start off at a financial disadvantage due to the years spent in school and the high student loans they have to repay. Those who choose to pursue a JD instead of an MBA often have to take on the role of entrepreneurs to start a small firm or solo practice.
In his book, “The Lawyer Millionaire: The Complete Guide for Attorneys on Maximizing Wealth, Minimizing Taxes, and Retiring With Confidence,” author Darren P. Wurz, a certified financial planner, emphasizes the importance of setting financial goals. He highlights that money itself is not the ultimate goal, but rather what that money can help you achieve.
Wurz identifies seven common money mistakes that attorneys can make, which he discusses in detail on The Lawyer Millionaire Podcast and The Modern Law Library episode. These mistakes include having an insufficient savings rate, neglecting savings to pay off debts, living beyond one’s means, not maximizing tax advantages, having too many resources tied up in real estate, not having a financial plan, and focusing too much on planning without taking action.
Retirement for attorneys often looks different from other professionals, with many wanting to continue practicing part-time even after the traditional retirement age. Wurz suggests that attorneys should consider their practice as a valuable asset that can be sold for a significant financial gain in retirement. Selling a practice can provide continuity for clients and a financial boost for retirement.
Wurz also offers advice for newly minted attorneys to start off on the right financial path and discusses strategies for mid-career professionals who are now focusing on their finances. He also touches upon the impact of student loan forgiveness programs on recent graduates.
Overall, the key takeaway is the importance of setting financial goals, creating a solid financial plan, and taking action to secure a comfortable financial future. By avoiding common money mistakes and seeking professional advice, lawyers can work towards achieving financial security and a fulfilling work-optional lifestyle in retirement.