What Happened When I Retired for a Year at 35

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On February 4, 2019, I quit my job. February 19 was my last day at work, and February 20 was my first day of freedom. On this one year anniversary, I’d like to look back at what happened the year that I retired at 35.

The “Accomplishments”

I read another blogger’s early retirement post and he could quantify a great deal of accomplishments. And I guess I can rattle off things I’ve done, but that seems like running a different kind of rat race. 

I kept busy on my time off. I’ve traveled a bit – to L.A., New York, San Francisco, Redmond, Capetown, Johannesburg (South Africa), Lisbon, Porto, and Sintra (Portugal). This is what I would say if people asked me what I had done with the year. Travel seems to be the only “real” accomplishment worth noting when you’re retired. And to be fair, South Africa was eye-opening, especially after listening to Born a Crime: Stories from a South African Childhood. But to me, the really interesting changes were when I was home. 

What I’m focusing on in this post is not necessarily my choices during the year, but the repercussions. I often would made one choice that led to another choice and all those choices led to a different trajectory. It’s like when I started this blog, then I started Twitter to promote it, then I met friends, and two of those friends were the duo that started Chain of Wealth, who will figure significantly in some of these adventures. You just never know where things are going to take you. And the oddest part of any journey may be where you end up. 

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How to (Finally) Feel Like You Have Enough

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When I was paying down my debt, it felt like I was fighting for every last penny. I’ll feel so much better after my debt is gone. But then, after my debt had been paid, I looked at my paltry bank account and still felt fear. I wondered, when would I ever feel like I have enough?

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Why Dating Sucks for Female Lawyers

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A money and power imbalance is why dating sucks for female lawyers. Couples often fight about money, particularly if the distribution of money is uneven. Money is a proxy for power, and power imbalances lead to disagreements.

When the Woman Earns More

Because of the pay gap, most heterosexual relationships involve a higher-earning man and a lower-earning woman. But in 29% of hetero relationships, less than 1/3, the woman out-earns the man. This figure has been increasing for decades, but is still a small minority of couples. It’s unlikely, then, that either person in a couple has experience with a higher-earning mother. The newness of this type of relationship and the high likelihood that women lawyers will be involved in such a relationship can lead to growing pains.

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Don’t Go To Law School! (Without a Financial Plan)

Law students dream of big starting salaries – but will high salaries be enough for a comfortable lifestyle with law school loans? This post intends to find out.

don't go to law school (without a financial plan)
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Law school is billed as a “safe” bet but I’m telling you – don’t go to law school without a financial plan! When I looked at law school tuition prices recently, I was shocked. Prices have doubled since I went to school 10 years ago. And even when I was in school, the tuition prices and student loan loads were burdensome. Meanwhile, BigLaw salaries (the highest salaries a law graduate can expect when she graduates) have only increased slightly.

The rising cost of law school tuition should give any potential law student pause. My last post touched on how the rising cost of college should encourage more students to think critically before attending – and the same is true for law school.

What I hope you’ll find by the end of this post, is that even if you end up with a high salary, attending law school is a risky investment. That doesn’t mean you shouldn’t go, but you must go in with open eyes and a financial plan.

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Why College Is Not Worth the Cost

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Many Internet articles inexplicably conclude that college is a must for your child. But based on basic economic facts, college is NOT worth the cost.
Costs for four years in college average between $44,000-165,000 (public to private schools) JUST FOR TUITION.  Adding minimal living costs, this total could easily balloon to $84,000-$205,000 at 5% interest. Meanwhile, the median entry-level salary for a college graduate is only $48,000. But, more and more college graduates are stuck in low-wage jobs when they can find a job at all.
Going to college could be the single worst financial decision of your life. If you look at it honestly, you’d be hard pressed to make an economic case for college.

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How Being Single Helps a Woman’s Finances

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Being single seems like it would be an impediment to advancing in your career. For instance, a significant other can halve your chores and expenses and provide advice and support – clear benefits. For me though, being single helped advance my career. It turns out that my experience is typical for highly educated women professionals. Here are 9 ways being single can help a women’s career (or how being married/coupled can hurt it) and my experience navigating these obstacles.

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A Lawyer Defines Terms: Emergency Funds

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My tweet earlier this week got me thinking about emergency funds:

Screen Shot 2019-12-18 at 6.36.15 PM

What counts as an emergency?

According to Vanguard, an emergency fund is a stash of money set aside to cover the financial surprises life throws your way.  A number of people commented that one shouldn’t use an emergency fund to attend a wedding because a wedding “obviously did not fit the definition of emergency.” But, as a lawyer, I have to say, it depends.

According to Merriam-Webster, an emergency is:

an unforeseen combination of circumstances or the resulting state that calls for immediate action

So does a last minute destination wedding count as an emergency? Some people say a wedding is not unforeseen or does not require immediate action. But this year, I’ve attended four weddings, three were destination weddings and all four occurred between three to eight months after the engagement. For a destination wedding, given that kind of notice, I needed to buy a plane ticket quickly. It’s hard to start saving money for a significant purchase in a few weeks (especially assuming you couldn’t save prior to knowing about the wedding).

[As a side note, my comments section asked what jerks have short-notice destination weddings. My friends are wonderful thoughtful people. As people get older, they want to get the wedding done ASAP and their friends and family can’t necessarily plan a year in advance. The weddings were in the most convenient locations for the most relatives, particularly the elderly ones. So though it’s a destination wedding for the bride and groom and for me, it’s the closest one for a majority of the guests. And finally, it’s an invitation, not a subpoena! I have the choice to say no. I chose to go.]

So I think last minute destination weddings can meet the definition of “emergency.” But what does that matter if you value having the money in your account more than going to a last minute destination wedding?

Your Definition of Emergency Will Vary (And It’s Ok)

A number of commenters noted that they prefer to have separate savings accounts for unexpected good things. I mean, yeah, if you have a wedding fund, take the money out of that instead of the emergency fund. Duh. But let’s say you only have one batch of savings and you call it emergency savings. If there’s enough money to carve out a section for wedding savings, that’s the same thing as having a separate wedding fund. So there’s no real reason to get angry at someone for dipping into their emergency funds when there’s enough money to get everything done.

If all your savings in the whole world equals the amount you would spend on this wedding, then yes, that’s a risky idea. But you are entitled to make that risky choice. And it might be a rational choice. As much as personal finance bloggers talk a big deal about preparing for once-in-a-lifetime doom and gloom moments, sometimes once-in-a-lifetime happy events turn up on your doorstep. I think, for most people, unexpected happy events are more likely to occur than the worst case scenarios.

There is a chance that you will lose your job and your life will collapse all at the same time. There is also a chance that you will miss out on all sorts of fun events and the worst never happens. And even if the worst happens, it’s ok to believe that you’ll be ok and find a way that doesn’t mean your life is an utter disaster.

But if you prefer to have the money in your emergency fund and never use it, you are entitled to make that choice too! When we think of emergency funds, we have to think of what we value, the odds that the worst will happen, and most importantly, what we are most comfortable with.

My Emergency Fund

I don’t have an emergency fund anymore. When I had just started working, I squirreled money away in case of an emergency. And that money started to accumulate until I had saved the recommended 3 months. 6 months. 9 months. That was quite a bit of money sitting in a savings account. And not that I was complaining, but I barely dipped into it.

I was steadily employed. My car was 13 years old, and lasted for 5 years after that, and then I went car-free for 3 years after that. My laptop was 4 years old, but lasted another 3 years, and actually buying another laptop wasn’t that expensive. I had an unexpected medical emergency but that didn’t cost as much as I expected it to. So I just had a bunch of money sitting around.

Meanwhile, I was also saving in my 401k and my Roth IRA. I had paid off my loans. And I got to thinking, let’s say I lost my job. I wouldn’t need all of the money immediately – I would only spend it one month at a time. If I lost my job, I would get a 0% interest credit card to float me for a year, and even if I lost my job during a recession, I would have that year to liquidate a month or a few months of stocks assuming I didn’t get another job for over a year. And I don’t have any dependents or a mortgage, so worse to worse, I could drastically reduce my lifestyle rather quickly. And there’s also the possibility that I wouldn’t lose my job and that I would have missed out on all the dividends and growth from keeping my tends of thousands earning 1% in a savings account for years.

So I started moving money from my emergency fund into my investment accounts and I haven’t looked back. This is a bit of a moot point now because I quit my job in February without pre-planning. The stock market is booming and I’m happy that I’ve let my money grow over the years. That was the choice that I was the most comfortable with.

Conclusion

What’s an emergency fund? It’s the savings you have to give yourself peace of mind in light of the existence of unexpected events. It can be any amount, and it can go up or down. You can dip into it for any kind of unexpected event and you shouldn’t have to answer to anyone else about what constitutes an “emergency.”

Also check out J. Money‘s great post about this topic!

 

6 Things Introverts Get Wrong About Extroverts (And Why It Matters)

6 things introverts get wrong about extroverts
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I wish I could counter Susan Cain’s groundbreaking book about introverts, Quiet, with one about extroverts, and I’d call it, Also Quiet.
You may be thinking that if a book about introverts is called, Quiet, then a book about extroverts should be called “Loud.” But as much as Ms. Cain’s book dispels some myths about introverts, it creates quite a few misconceptions about extroverts. Here I’ve written a few things that introverts get wrong about extroverts.

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What If We Stopped Teaching Women to Be Afraid?

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How Fear Became Common Sense for Women

Why do we teach women to be afraid? For years now, I’ve seen articles and social media posts discussing how #yesallwomen live in constant fear of violence.  This fear means women refrain from many enjoyable routine activities like exercising, going out at night, or traveling by themselves.

This idea bothers me every time I see it. The fear is grossly outsized compared with the actual risk. For example, Wikipedia states:

Although fear of crime is a concern for people of all genders, studies consistently find that women around the world tend to have much higher levels of fear of crime than men, despite the fact that in many places, and for most offenses, men’s actual victimization rates are higher. [emphasis added]

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