2020 is finally drawing to a close.
It’s the first of December, meaning it’s time for another update to my net worth series.
As a reminder, I’m documenting my progress as I try to reach two goals: a $1 million net worth and a $30,000 annual passive income.
My Experience in Law School
I’m preparing to graduate law school within the next couple of weeks.
Granted, I still have to take the bar exam this February. But, I wanted to talk about what I actually learned in law school and go over whether or not I feel it was worth it in hindsight, especially considering the impact it has and will have on my finances.
For those of you who don’t know, I currently attend Chicago-Kent College of Law.
I started law school right out of undergrad, but I also started my career around the same time. Initially, I attended school on a part-time basis. I took night classes while working my day job in property management.
The biggest reason I chose to attend law school, and Chicago-Kent in particular, was the fact that I got a full ride scholarship.
I thought that attending school was definitely worth the time risk since I could avoid the financial burden often associated with law school.
I went into law school with a real estate lens. Starting out, I knew I wanted to be involved in the industry in some way – definitely through investing, ideally in development in the future.
I knew I wanted to build my skills in real estate and start building my network.
I thought I’d leave school as a “JD-advantaged real estate guy” or something like that. I wasn’t really planning on being a practicing attorney.
Let’s just say those plans changed.
I quickly found out that my best opportunities were, in fact, in the legal field. Lot’s of investment firms I applied to in the years before and during law school were actually turned off by my law school attendance since they assumed I would just jump ship and leave to be an attorney.
Well, enough people kept saying the same thing and I found myself looking at some great opportunities at law firms and pretty much no where else. So I made the commitment to go full-on into a legal career.
In hindsight, it makes plenty of sense. It’s just not what I was picturing going into school. So was it worth it?
Is Law School Worth It?
Was law school worth it for me? Did I learn anything useful about real estate? In short: yes.
When it comes to real estate specifically, school really isn’t that great for it.
Classes are very generalized most of the time, or are very high level. They’re teaching you broader skills and frameworks.
They go over a lot of broader laws, but that’s not always what applies in real estate as a practicing attorney, especially since there are a lot of state-to-state issues. You have to know the state law very well if you’re going to be a successful attorney in one specific state.
You’ll learn a lot more by actually working at a law firm and talking with practicing attorneys. Law schools just can’t cover all of the specific nuances with a particular practice area in a particular state or city.
In short, you can study all you want, but the best way to learn is to actually practice in the field (like just seemingly any other industry).
Law school’s real value comes from teaching you a way of thinking. Most of the time, there’s a very logic-driven approach to pretty much everything. It’s valuable, but not directly practical until you get into the real world.
When it comes to “hard skills,” law school definitely refined my writing skills. Law school writing it pretty formulaic and it forces you to write logically and coherently.
It’s a bit of a sink or swim game.
I did well enough with my writing that I made law review and moot court, and both of those further helped improve my writing and research skills.
To that, I just published my first book. I am very comfortable writing (and even more now that I’ve been through law school).
That said, the biggest things I gained from law school were connections with great people, at least before we went fully virtual. I met a lot of people from very diverse backgrounds, from mothers with decade-long careers, to fellow 20-somethings who (maybe) were working during school.
I made some good friends out of it as well. Can you really put a price on those??
All told, I am slated to start working at a large law firm in Chicago in their real estate department. It should be a really great start to my legal career.
Of course, that’s only after I pass the bar in February.
December 2020 Net Worth Numbers
As a reminder, last month our net worth was at $71,248.00.
Assets – December 2020
The markets have been surging on the vaccine and (more) stimulus news. So that definitely helped our stock holdings.
I’ve pulled my money out of broad index funds for the most part (besides my IRA, which remains entirely in index funds). I’m trying to be a little more careful about what I invest in now, because of how overvalued I feel some stocks are.
In the meantime, my portfolio is up, so it looks good on paper.
While I’m wrapping up school, I’ve been making money writing blog articles for a couple law firms. That’s been a nice little side hustle – which I covered in this video a while back.
One of the more significant changes to our assets this month has been opening up an HSA, which is a health savings account. It’s similar to a retirement account that’s specifically for health expenses.
I’ll continue putting some money in there since it’ll grow tax-free. The HSA will probably end up replacing a large portion of our cash emergency fund since it can be used for potential medical emergencies.
Otherwise we still have a decent amount of cash ready to go on the side. We’ll see what opportunities January brings while I’m studying for the bar.
In total, that leaves us at $375,857.03 in assets.
Liabilities – December 2020
Nothing much has changed here.
We threw a little bit of money at the HELOC again, which I’m still focusing on. Once we start earning more income, I’ll be able to start pouring money into paying down debt.
My wife’s student loans are pretty hefty, so I’m eager to start paying those down. Though payments on those are frozen and interest is not accruing thanks to the CARES Act from many months ago.
I’m also going to start tracking accrued property taxes on this tab. I hadn’t been doing it before, but I’ll start including about $130 a month in monthly property taxes for my primary residence.
I’m not including the expenses from my Indianapolis rental property since those are pretty contained in a separate business account and are being paid out of reserves (which I’m not counting on my asset sheet). It wouldn’t really make sense for my to include them with my personal finances.
In total, that leaves us with $299,149.31 in liabilities.
My Net Worth – December 2020
Our net worth has climbed to $76,707.72.
That’s a total gain of $5,459.72.
Our debt ratio decreased to 79.59%.
And our passive income remains at about $350 per month.
Overall, it’s been a pretty good month.
I do want to be careful heading into January, since many of those famed stimulus programs from the CARES Act are set to end. If they’re not extended, I would think that’ll definitely do some damage to the market.
In the meantime, I’m still focusing on debt pay down for the most part.
Once I start making some significant income, that’ll likely be geared toward paying down debt, or for opportunistic investments.
Now let’s go finish this JD!
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