The Modern Law Library
The Author of ‘The Lawyer Millionaire’ Shares the 7 Biggest Financial Mistakes Lawyers Can Make
Finance is a complicated area for many lawyers. Despite high earning potential, new lawyers often start out at a financial disadvantage due to the opportunity cost of years spent in school and preparing for the law, along with high student loans.
People who choose to earn a JD instead of an MBA are often forced to operate as entrepreneurs to launch a small business or solo practice. In The Millionaire Lawyer: The Complete Guide for Lawyers on How to Maximize Wealth, Minimize Taxes, and Retire with ConfidenceDarren P. Wurz addresses personal finance and business finance.
“A financial plan starts with goals,” writes Wurz, who has a master’s degree in financial planning and is a certified financial planner. “Please note that money itself is not the end goal of this plan. Rather, the goal is what that money can do for you.”
In this episode of The Modern Law Library In the podcast, Wurz provides advice to lawyers at the beginning, middle and end of their working careers and tells ABA Journal’s Lee Rawles about the seven biggest financial mistakes lawyers can make. The seven errors that Wurz identifies, which are exposed in the episode, are:
- Have an insufficient savings rate
- Neglecting savings to pay debts
- live too big
- Not maximizing tax benefits
- Too many resources are tied up in the real estate sector
- Not having a plan
- Too much planning, not enough doing
Wurz, who also presents The Millionaire Lawyer Podcast, says retirement is often different for lawyers than for other professionals. Many lawyers would like to continue practicing at least part-time, even after the age at which most people retire. He says the goal for many of his clients is to have the financial security to have a “work optional lifestyle” that allows them to take on only the cases that truly interest them.
One of the messages Wurz wants to convey to older lawyers is that their most important asset might be something they didn’t know could be sold: their own practice. The time and effort invested in building a client portfolio can also pay off late in your career, not just during your active years of practice. While it may take more time and planning to organize than selling real estate, selling your practice to a younger attorney can provide continuity for your clients and a financial blessing for your retirement.
While Wurz offers advice on how newly minted attorneys can get started on the right financial foot, he and Rawles also discuss options for mid-career professionals who are just now getting a handle on their finances. He also shares what his general advice would be for the thousands of people who have recently had their student debt unexpectedly erased through programs like Public Service Loan Forgiveness.
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