Hypothetical of the Day
March 14, 2010Here’s an interesting article from Financial Samurai:
The Curse Of Making Too Much Money And Not Pursuing Your Dreams
What would you do if you were Lyndon? Can you feel any sympathy for him?
Thoughts of an Anonymous Lawyer
Escape From the Rat Race . . . BigLaw Style!
Dude,
good luck with your plan. I applied to law school, and got into Harvard!
Then I started interviewing lawyers. It seemed there were a few law firms that allowed you to keep your life- but they were few and far between.
I would look into trying to find one of those- you may be able to still pursue financial independence and not work such insane hours.
I decided not to pursue law because it would be too difficult to keep a life.
however, you are already there, so I wish you luck in your drive to escape from the chains.
It is no easy feat to get into Harvard Law — so congratulations for that. It must have been a difficult decision for you to balance your ego vs. your pocketbook, but I think you made the right decision if you want to lead a balanced life. What did you decide to do instead of law?
Harvard is more about having a perfect LSAT and having some cool life experience more than being intelligent.
I ended up writing computer software, which is what I still do. I am working towards financial independence as well, but am not as crazy about getting out of the work world as I once was.
I actually took a big salary cut to go to a firm where you work less hours, and I am very pleased, although it set back my financial independence by a few years.
On a more serious note, with regards to investing:
The market really does seem overvalued at the moment. However there is no way to know what the future market will bring. The market is always undervalued if you look to a long enough time horizon. If the time horizon of the investors in the market is always long term, you will never buy into the market. This creates a problem for you, you will always be waiting around.
Here is the way I have been looking at investing, which you might like:
Look at investing as not buying assets which will go up in value- but as assets which produce income, and may go up in value (or may not). Now, instead of buying any stock- only buy dividend stocks which are paying a decent yield (and are stable companies). Now you are buying the cash flow coming to you as a dividend. It doesn’t matter if the asset itself goes up in value- if it goes down- as long as the dividend stream is maintained- you are still fine in your goal of financial independence.
The goal of this is not to have the largest asset base at the end of your investing ventures- but the largest secure cash stream.
Now you have a new problem- how do you find dividend paying stocks which are stable and pay a decent yield? (Financials used to be considered part of this elite group, so there is room for failure here). I would start by looking at the stocks in Wellington fund- a very stable mutual fund paying about 3% in dividends. Then pick stocks in here paying above 4%.
personally I would pick MO, and KMP (which has some hassles being a MLP but I think this would be worth it). Some MCD with a bit lower yield. Try investing $20k or so in a mix of these stocks and sit on them for a year.
Even if they go down- if the income stream is still coming off them.
It is less volatile than other stock investing, but also you know what you are aiming for now- a cash stream, not a particular value of investments.