The Millionaire Next Door is a classic in personal finance literature. I can’t recommend it highly enough. It’s less a prescription for how to invest your cash but a description of who actually becomes rich.
Lawyers tend to want to think through what principles ought to apply in order to get to a certain result. Here are some examples: Make a lot of money, then you will be rich. Go to a good law school, then you will be successful. Make partner, then you will be rich.
These are all fine inferences if you want to think your way into disappointment.
Another way to figure out what gets a result is to look at when that result has happened, then study how it happened.
A while ago I got deep into triathlon. I’d work out for three or four hours in a day, then finish, eat, and think about triathlon some more.
Because there are limits to how much someone can really exercise in a day – and I hit them – I found myself still wanting to do something with triathlon. I was still thinking about triathlons.
So, what did I do? I read books on triathlon, I browsed blogs about triathlon, and – I say with no small amount of shame, given the forum – I bought stuff associated with triathlon.
Virtually none of this buying, reading, or browsing did much to advance my triathloning much. My abilities were not such that reducing the weight on my bicycle, for example, but 30 grams made a tremendous difference in where I placed in a race. (more working out, though, did a lot)
I’d max out my 401(k) (or TSP when I worked for the government) and, when my kids were born, put a set amount in their 529 plans. Then I’d go on my merry way, assuming that the 401(k) max and some amount in the 529 would be ducky.
If you want to lose weight, you should create a record of each and every calorie you consume, and record how much you exercise. This is a pretty successful approach when it’s followed, but it’s pretty tricky to follow.
Similarly, if you want to build wealth, you should spend less and save more. As with losing weight, gaining wealth comes from awareness. If you’re mindlessly eating in new restaurants night after night, you will be fat and poor. (Unless you’re also working out all the time and cutting back in other areas, of course).
So, if you want to save more – and if you don’t want that then I’m not sure why you’re on this page – you should have a budget.
Lawyers are known for being broken people. Compared to the average person on the street, we’re more likely to abuse drugs and alcohol suffer from mental illness, or commit suicide.
There are a lot of reasons for this. For one thing, the law attracts and rewards pessimists and being pessimistic doesn’t really correlate with happiness. For another, much of law is zero sum; someone loses every case that goes to trial or a contested motion. Lawyers are second guessed often, and we often see people at their worst.
All of that is important for why lawyers tend to be miserable. But I think there’s another important problem – lawyers think external rewards bring happiness.