I didn’t make more than $40,000 in a year until I was 31. Before law school I did a lot of things – I researched psychology and neuroscience at Harvard, Princeton, and Northwestern, I designed websites for small companies in Portland, I taught the MCAT, I traded for clients’ accounts as a futures broker (it’s not what you’d expect), and I ran a get-out-the-vote operation for a national campaign when I was 21. I lived all over the country and met people with very different lifestyles.
I wouldn’t trade those experiences for anything, but I didn’t make a lot of money.
But now at (almost) 38 I can maintain my current lifestyle for about 20 years, even if my money doesn’t grow. 8 of those years are because of capital appreciation.
How did I do it? Like anything, some skill, some luck. I was fortunate that I had a full ride for law school. That took some of the risk off the table. I didn’t spend a lot in school – my budget my first semester of law school for dinner was ~$3.30 to cover three items from McDonald’s dollar menu. I ate a lot of peanut butter raisin sandwiches (I got tired of jelly).
I joined biglaw after I graduated, and although my income went up a lot my expenses did not follow suit. I maxed out my 401(k) contribution every year and bought more stocks on top of that (in a simple index fund). I bought a condo well within my budget but not in the coolest part of town (but I loved it). The luck part is that I caught a strong bull economy cycle at the same time my income grew. But year over year my investing went up, but my expenses didn’t. I got excited when I got that salary bump to see how much more I could contribute to my monthly investments.
I’ve been financially self-sufficient since I was 19 and paid for most of my college education, so that self-sufficiency and the thrift that comes with it is a core part of me. I’ve moved to an inexpensive part of the country where I can enjoy the outdoors. I’m further away from Whole Foods and Trader Joe’s, but I’m closer to farms and farmers’ markets. I miss the city, but it’ll still be there when I want to return.
I could probably live comfortably on even less than I spend now. I still like eggs and I still like beans. I had heard of golden handcuffs before I entered law school, but only really understood them when I saw how my peers spent their money. The exotic bottles of scotch, the trips to Vegas, the luxury condo in the ritzy part of town or the big house in the suburbs. They’re all still at big firms, working big hours.
You don’t have to go that way. Learn the basics of investing and personal finance. The rules are far simpler than you think they are. The key ingredients are discipline and patience.
Don’t look to your peers for how to spend. Use your own judgement about what do to with your money and play the long game. I can assure you that it’s worth it.