‘The Lawyer Millionaire’ author shares the 7 biggest money mistakes lawyers can make
The Modern Law Library
‘The Lawyer Millionaire’ author shares the 7 biggest money mistakes lawyers can make
June 19, 2024, 9:45 am CDT
Finances are a fraught area for many attorneys. Despite a high earning potential, new lawyers often start out with a financial disadvantage because of the opportunity cost of the years devoted to school and bar prep, coupled with high student loans.
People who chose to get JDs instead of MBAs often find themselves having to operate as entrepreneurs to launch a small firm or solo practice. In The Lawyer Millionaire: The Complete Guide for Attorneys on Maximizing Wealth, Minimizing Taxes, and Retiring With Confidence, Darren P. Wurz addresses personal finances and firm finances.
“A financial plan starts with goals,” writes Wurz, who has a master’s degree in financial planning and is a certified financial planner. “Be aware that money itself is not the ultimate goal of this plan. Rather, it is what that money can do for you that is the goal.”
In this episode of The Modern Law Library podcast, Wurz gives advice for attorneys at the beginning, middle and end of their working careers and tells the ABA Journal’s Lee Rawles about the seven biggest money mistakes that attorneys can make. The seven mistakes Wurz identifies—which are expounded on in the episode—are:
- Having an insufficient savings rate
- Neglecting savings to pay off debts
- Living too large
- Not maximizing tax advantages
- Too many resources are tied up in real estate
- Not having a plan
- Too much planning, not enough doing
Wurz, who also hosts The Lawyer Millionaire Podcast, says retirement often looks different for attorneys than other professionals. Many lawyers would like to continue to practice at least part time, even past the age that most other people retire. He says the goal of many of his clients is to have the financial security to have a “work-optional lifestyle” that will allow them to take on only the cases that really interest them.
One of the messages that Wurz wants to convey to older attorneys is that their most important asset might be something that they didn’t realize could be sold: their practice itself. The time and effort put into building a book of clients can also pay off at the end of your career, not just during your active years of practice. While it might take more time and planning to arrange than selling a piece of real estate, selling your practice to a younger attorney can provide continuity for your clients and a financial boon to your retirement.
While Wurz offers tips for how newly minted attorneys can start off on the right financial foot, he and Rawles also discuss options for mid-career professionals who are only now getting a handle on their finances. He also shares what his general advice would be for the thousands who have recently had their student debt unexpectedly erased through programs such as Public Service Loan Forgiveness.
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