‘The Lawyer Millionaire’ author shares the 7 biggest money mistakes lawyers can make

Episode Notes

Transcript

Lee Rawles:

Welcome to the Modern Law Library. I’m your host, the A BA Journal’s, Lee Rawles, and today I’m joined by Darren Wurz, author of the book, the Lawyer Millionaire, the Complete Guide for Attorneys on Maximizing Wealth, minimizing Taxes, and Retiring with Confidence. Darren, thanks so much for joining us.

Darren Wurz:

Yes, Lee, thank you so much for having me. I’m excited to be here and share some great wisdom with you.

Lee Rawles:

So right off the top, we may have some real newbies when it comes to financial planning. They may be feeling some panic. Don’t worry, we’re going to hold your hand, we’re going to talk about it, but it may be helpful for them to hear a little bit about what you do and how you decided to focus on supporting lawyers when it comes to financial planning.

Darren Wurz:

So I describe myself as a Chief wealth counsel for lawyers and law firm owners, and really there are three main areas that we help lawyers and law firm owners with. The first is business expansion because a lot of lawyers are business owners, and so we help them think through how they’re going to grow and expand their business and eventually sell their business because not only most law firms, most businesses in general don’t make it beyond the owner, and so how can we help you to think about monetizing and growing the value of that practice? The second thing is profit maximization, tax planning, cashflow, helping you keep more of what you are earning, which is critical. And then the third area where we really help lawyers and law firm owners is wealth growth. How can we grow your portfolio, cultivate passive streams of income that can one day support you and a lifestyle of financial independence?

And so that kind of sums it up in a nutshell. As far as working with lawyers, I’ve been at this almost 10 years now. That’s hard to believe, but I started as a generalist working with just anybody. I started my own business, so I can relate to a lot of lawyers and law firm owners who’ve struck it out on their own. Did a lot of networking, was pretty successful at that. A lot of my early clients were lawyers, and as I learned more about marketing and about growing a business, I started to learn about this idea of niching and how important it was to have a well-defined market. And so just looking at my current list of clients, I decided to focus on the legal profession firstly because I had a lot of folks who were clients who were attorneys, but then also I just really had a love for TV dramas, legal dramas and things like that. So I thought that was really exciting and the more I get into it, I really started to have an appreciation for law firm owners, being business owners. I love the growth mindedness, the entrepreneurial nature, the ambition, and those are really fun people to work with. And on top of all that, there really are not a lot of financial planners out there to the legal community and there’s some really unique things that lawyers and law firm owners face

Lee Rawles:

And I’d love to jump on that. What are some unique difficulties or opportunities that lawyers have when it comes to financial planning?

Darren Wurz:

Absolutely. I think you mentioned newbies. So from the get go, student loans is a big one and a lot of folks are concerned about that. Rightly so. Law school is becoming more and more expensive and you may have hundreds of thousands of dollars in student loan debt, and I know folks in their fifties who are lawyers who still have student loan debt hanging out there. So it’s a big priority for folks, and that’s a big challenge right away when you’re just getting started in your legal career. And it can be really hampering because a lot of folks feel like, well, I’ve got to go work in big law and I’ve got to make $300,000 a year just to pay off these student loans. Like this is crushing me. And I think it can really hold people back in a lot of ways. So that’s one area we try to address with younger folks. The other side of the coin is you have the opportunity to start your own practice, and we work with a lot of law firm owners and I think that’s a really unique space. It’s really, really challenging to be a business owner just by itself, but to be a business owner in the legal space and a practicing attorney, there are a lot of challenges there. So we’ve developed kind of a unique way of working with those folks.

Lee Rawles:

One thing that you said towards the beginning of your book, the Lawyer Millionaire, I thought was pretty profound, and hopefully it helps people frame our discussion in this way. You said a financial plan starts with goals. Be aware that money itself is not the ultimate goal of this plan. Rather it is what that money can do for you. That is the goal. I imagine you have this conversation with clients all the time. So can you talk a little bit about that philosophy and what you hope our listeners or our young attorneys, attorneys looking at retirement, can you help them frame maybe their money anxieties in that way?

Darren Wurz:

Well, thank you. I’m glad I said something profound, but it’s so true. I think this is a trap that many of us fall into, whether you’re an attorney or not, we are prey to this idea of the American dream and we’ve got to grow and we’ve got to chase and we’ve got to climb the ladder so to speak and grow our careers. But you will ultimately never be truly happy if the only thing you’re chasing is the bigger paycheck and the bigger bank account. Life is about so much more than that, and I think it’s easy to fall into that trap where you’re trying to get to a certain milestone. I challenge people to really think seriously, think critically. How big of a house do I really need? Let’s start there. You know what I mean? Do you really need different things in your life? Do you really need a certain lifestyle? And I think that’s where a lot of people get tripped up. As we grow, as our incomes grow, we expand our lifestyle,

Lee Rawles:

And there can be a lot of social pressures, especially if you’re part of a firm, maybe you want to make sure that you’re able to socialize with people who you think you need for your business. So you might be laying out, okay, well do I have to buy a country club membership? Do I need more golf lessons? The lifestyle creep can come really fast. Do you have any just advice beyond, please don’t do that for people who feel that pressure.

Darren Wurz:

Well, you really got to dig deep and try to identify what we call money scripts. What are some of those underlying money beliefs that may be impacting those behaviors? And it can get very deep very quickly when you start doing that, but a lot of us inherited these ideas from childhood, and I think being an attorney and being in a competitive environment like that, going through law school, being in that kind of a competitive environment, you are perhaps kind of conditioned to believe that hard work is related to money that you have to chase this idea of money and hard work. And so you have a lot of burnout in the legal profession. A lot of that’s the nature of the legal profession perhaps, but I think it’s also kind of some of the ways that people have been conditioned to think that they have to work hard, that they’re not truly deserving of money and success unless they are burning the candle at both ends and working 70 hours a week and just exhausted. It’s very interesting when you start to think about how that plays into it.

Lee Rawles:

We are going to be talking about retirement planning, we’re going to be talking about people in the middle of their careers, but I do want to talk just right up at the top about young attorneys. So let’s say you and I are talking to each other in May, there’re going to be a lot of people graduating, a lot of people studying for theBar, a lot of people about to launch into their profession. This is kind of a perfect stage for a good healthy start. What would be your advice to these law grads, these really early professionals to do right off the bat?

Darren Wurz:

Yeah, I would say from the beginning, make sure that you’re tracking where your money is going, tracking the money that’s coming in and the money that’s going out, use of software to help you. One that I really love is Monarch money. I think it’s like 15 bucks a month or something, but it’s really fantastic. I used to mint a lot and then they got rid of Mint, so I was disappointed with that, but it’s critical to keep track. I talk with so many really successful attorneys who have no idea how much they’re spending on a monthly basis, and that is not loan by itself a problem, but it can set the foundation for potential problems. It can be a contributing factor to poor money management, and you find yourself spending more than you really want to spend because you’re just not aware. So number one is start a budget, and I know people don’t like the word budget, but hey, guess what?

None of us has unlimited resources. That’s just a fact. Even Bill Gates has limited resources, so we just have to be aware. Just a higher limit. Yeah, just a higher limit. That’s right. Set some percentages. I really encourage you, if you’re just starting out to start investing, I know you have debts to pay off. I know that you have those student loans and things that are hanging over your head, but you’ve got to start investing from day one even if it’s a very small amount because you need to build that habit. It’s really, really critical. The other thing is that there is the potential of opportunity cost. Opportunity cost is the price You pay to choose one thing over another. We don’t know what the stock market is going to return, so there’s risk there. The stock market, it could go down, that would be terrible or it could have some really great years.

Generally over time, the stock market does go up and generally over long periods of time, the rate of return on your investments is going to be greater than the cost of debt, at least usually student loan debt, unless it’s double digits, percentage wise, 10, 11, 12% or higher than those things you may want to target. But if you’re not investing at all, you’re missing out. There have been years, the stock market has given us 30% returns or higher, and if you’re not putting anything in, you’re going to miss out on that. Now, it doesn’t have to be a small amount, and so I would encourage you to set maybe targets, right? Set a target of 1%. I’m going to save 1% of my income and invest it. Guess what? You’re not going to miss it. 1% of everything that comes in, put it aside an investment account. Don’t worry about it. Whether it’s a Roth IRA or traditional IRA, just open a standard brokerage account, invest in the s and p 500. Real basic, easy way to start and just set it and forget it and keep it going. I think that’s really critical.

Lee Rawles:

Well, thank you so much for those tips for the beginners. When we come back after a word from our advertisers, we’re going to hear about the biggest money mistakes attorneys make. Welcome back to the Modern Law Library. I’m your host, Lee Rawles here with Darren Wurz, author of the Lawyer Millionaire. And Darren, you have a whole list of the biggest money mistakes attorneys make, and I promised you I was not going to make you recite these from memory. I have them and I’d love to chat about them. So you identified seven in the book and just to I think start going through ’em, the first biggest money mistake attorneys make for you is insufficient savings rate.

Darren Wurz:

Yeah, this can be really easy to fall into because especially for law firm owners, if you own a practice, you don’t have a big company, a big law firm that is contributing to your 401k on your behalf. If you’re part of a big firm, maybe you have a 401k and your company is putting in 5% or maybe they’re providing a match, it’s very easy to be saving like 10% of your income, but if you own your own practice or you’re a solo, you don’t have that benefit. And as a result, there’s nobody like poking and prodding you like, Hey, you need to sign up for the 401k plan for the company and get the match. So it can be really easy then not to be saving enough money. And if you really want to be able to build some wealth and be able to retire one day, you really need to be saving, I would say, at least 10% of your income and investing it. So that’s a very easy one to fall into.

Lee Rawles:

The second one, and I found this interesting because I too have heard this advice, well, the opposite end of this advice, you say too many people are neglecting their savings to pay off debts, and I’ve definitely heard uncles at barbecues talk about how important it’s to, oh, you need to be paying off your debts instead of putting money into savings. That’s be double paying your mortgage, really try and pay off those student loans. But you say that that can actually be a mistake. Could you expand on that?

Darren Wurz:

Yeah, well, yeah, there are some folks that might come on the other side of this, but from a very elementary perspective, to begin with, you need to have a bucket of emergency savings. So that’s step number one. Before you pay off any debts, build up your emergency fund, and that should have at least three months worth of expenses in it for you. Okay, so the reason you want to do that, if you don’t have that emergency fund and something happens, your water heater dies and you got to get a new one, whatever it is, all of a sudden you’re going to just ramp that debt back up again and you’re going to be in this vicious cycle. I have some clients that I’ve worked with recently and they were being paid on kind of a quarterly basis, and what happened was they were putting all kinds of expenses on their credit cards and then every quarter when they would get paid, they would pay down the credit cards.

So they were accumulating 20, 30, $40,000 on credit cards each quarter and then paying it down. The problem is, of course, they were incurring these interest charges and things, and the bigger the cause of this was they didn’t have a slush fund, they didn’t have an emergency fund. So I said, okay, we’ve got to build up some reserves so that you’re out of this cycle. Because if you’re in that cycle and you don’t have savings set aside, you’re just going to stay in that cycle. There’s some psychological reasons why that is. You would think, right, I just plow all the money into debt and it’s going to get me out of debt. Well, you got to get that emergency fund up first. The other side would then be the opportunity costs that I mentioned earlier. Let’s say your debt has an interest rate of 5%, and if I can earn over a 10 year timeframe or longer, if I could potentially earn 10% in the stock market, if I choose to direct my money towards my debt with a 5% rate instead of towards the market with a 10% rate, it’s costing me 5%.

Now, there’s some risk involved that debt has a fixed interest, whereas the stock market can vary of course, but there is the potential you could be missing out on that delta between the interest rate percentage on the debt and the potential returns on the market. So if you actually directed that money towards investments and accumulated a lot more money, then down the road you could pay off the debt completely and have a lot more money left over potentially. Now, of course, we’re going into a world now where interest rates are a little bit higher than they were when I wrote the book. So you really have to think critically about that rate and what level of risk you’re comfortable with.

Lee Rawles:

The next one on the list, we’ve already discussed living too large. And number four, not maximizing tax advantages. You have an entire section in the book, which I urge people to pick up, lawyer millionaire, where you really get in depth about tax minimization and different opportunities for attorneys and tax tips. But the next one, on the list number five, it kind of surprised me, but then when I thought about it made sense, number five in the biggest money mistakes attorneys make is too much tied up in real estate. And I was like, what do you mean? And then I’m like, actually, no, the attorneys I know, do they really like the idea of rental properties?

Darren Wurz:

They do,

Lee Rawles:

But can you talk about this and having too much tied up in real estate and what the dangers are?

Darren Wurz:

Right. They probably all like pickleball too, I’m guessing. No, it is a common theme. It’s interesting. A lot of attorneys I know who are clients and others have a keen interest in investing in real estate. I think there’s a couple reasons why potentially. Maybe it’s something that you can own and control and see. It’s physical so I can touch it and see it. It’s tangible, whereas the stock market is maybe a little bit more intangible. And so from that perspective, maybe it feels less risky. But I tell you, Lee, I have heard so many horror stories from people who are investing in real estate. If you’re going to invest in real estate, great. It should be a part of your overall portfolio. Make sure it’s not so dominant in the portfolio because it does represent some specific risks by itself. Number one, it’s an asset class, a particular asset class. And while over the last few years we have seen real estate just go bananas, any of us remember the days of 2008 when real estate values did actually slump and you had landlords who didn’t have tenants, and you had sellers who couldn’t find buyers and who were underwater on their mortgages. And so there is a lot of risk involved in real estate. I think we’ve come full circle now so many years after the great financial crisis where people still are now viewing real estate kind of as this risk-free asset all over again.

Lee Rawles:

I am reminded of the title of the classic financial history book this time. It’s different. Yeah,

Darren Wurz:

Yeah, right. No, it is so true. The other thing is real estate takes money sometimes, and you may think that you’re getting a great return, but I know so many folks that are heavily invested in real estate and there’s expense involved in the upkeep and you have tenant issues and lots of problems like that. So I would say be careful about getting into real estate. Do it only if you’ve done your homework really seriously. Do your homework about it and make sure you have a balanced approach that all your money’s not going there, that you still have money going towards traditional investments and other things as well.

Lee Rawles:

And then the last two that you list as the biggest money mistakes that attorneys make, they’re not two sides of the same coin, but they’re at least cousins, I would say. One is not having a plan, and then the other is too much planning, not enough doing. So I imagine you have to see this in action with your clients all the time. And what do you advise people who are stuck either in this, oh, I don’t have a plan. I’m, I’m so busy at work and the important thing is serving in my clients and the people who are like, oh, I have a detailed plan and I put it in a drawer and someday I’m going to do something about it.

Darren Wurz:

Right. Okay. So much to unpack here. Well, number one, yes. I think a lot of what I see is folks who are so concentrated on just making payroll this month or this quarter, I just need to go and find the clients. I’m just trying to solve the income problem, so I don’t have time to plan. I don’t have time to do any of that. Well, the problem is you have to at some point get off that boat and onto a different boat because it’s very easy to stay right there. And I see folks that are approaching retirement age and they’re still operating in that same mindset. They’re still just chasing income and they haven’t created a plan for what’s next. And so all of a sudden you find yourself close to retirement age and it’s like, oh crap, I haven’t done any planning. So I see that a lot and I see that as a big mistake that a lot of folks make.

It’s very easy to do. So if you don’t feel bad, because there’s so many pressures on you as an attorney or a law firm owner, you’re trying to run the business and you have a lot of demands on your time and you’re just busy. So I totally understand that, but it’s so critical to plan. Now, the opposite is true analysis by paralysis. Two things. Number one, I think I struggle with this too. Sometimes I go to a store and I need to buy something, and I sit there for the longest time and I’m just comparing the options and it just get paralyzed. I dunno if anyone else can relate to that, but that’s a struggle I have. So

Lee Rawles:

If a grocery store rearranges the locations of the items that I’m used to buying my time at the grocery store will triple.

Darren Wurz:

Yeah, yeah, absolutely. It’s tough. So that can be easy to do if you are an analytical person, and I am an analytical person as a money person, so a good plan in action is way better than a perfect plan, never executed. The key is execution. And that’s why at our firm, working with clients, we’ve made the way we work with clients, a very close partnership where we’re not just helping you create the plan, but we’re helping you with the execution of it. I’ve created so many financial plans for folks, and then nothing happens. And then they call me a year later and they’re like, Hey, remember that plan you made for us? Could you send that to us again so we can start doing some of that stuff? And I’m like, oh my goodness.

Lee Rawles:

Well, another challenge you address that a lot of attorneys face is I think about my job. I am a salaried employee. I kind of set it and forget it when it comes to all, well, please employer send this much to my 401k every month and I know what my check is going to be. So many lawyers do not have that. They can be partners in a firm, and it’s going to depend on what’s the firm income this year, or contingency based attorneys. My father took cases on contingency, and so he could work on a case for three years and there would be zero money until there was money, or maybe there would not be money. And so I can see where executing on a plan could feel a lot more complicated for those folks then perhaps the salaried employee.

Darren Wurz:

Absolutely.

Lee Rawles:

So when you have that kind of irregular income, what are some of the things you need to be considering to make that financial planning longterm work?

Darren Wurz:

Yes, and that’s a big problem. I think that’s one of the number one things that a law firm owners, when they come to work with me mention as one of their biggest struggles is cash flow. I’m struggling with the cash flow. I don’t know how to predict it, and it’s up and down. There’s no way to really know. I’m just trying to find clients and do work and keep the firm running. So you have to plan, you can plan for that irregularity and you can try to instill regularity in your life. So I’ll give you a great example. A lot of attorneys and law firm owners have to make quarterly estimated tax payments, and every three months we have to write this check to the IRS and we know it’s coming, and then it’s this huge drain on our bank account, right? Well, you don’t have to pay the IRS quarterly.

Wow. Actually, you could pay your estimated tax payments monthly. What I like to do actually is create a separate bank account, and I call it my tax savings bank account. And instead of paying the IRS quarterly, I divide that by three, and every month I put money into my tax account, and then every quarter I take money from the tax account and send it to the IRS. So you can try to instill some regularity in some of those up and down things. Income would be a great example too, so that we could think about that. And this is where budgeting becomes really critical because you need to know what’s your baseline, what’s your minimum operating expenses for your family for the household? And if you have that fluctuation in income, maybe you have a certain baseline, right? I need X amount of dollars to go into this account to pay for groceries and the mortgage and et cetera.

But then maybe above and beyond that, you create a policy for yourself and you have some percentages, right? We’re going to have a percentage of what comes in, go over here for savings, a percentage of what goes in go over here for travel. So one thing, I’m going to back up here. You may notice I’m talking about different accounts. So that’s a very helpful way to try to organize that cashflow when it’s hard to predict, is to separate your money into different bank accounts for different purposes. And that way if I have just one account for the mortgage and the mortgage is $3,000 a month, every month, I’m going to make sure that account has $3,000 in it every month so that the mortgage is going to be paid. And that way when I go and I look at my bank account and I have all my different bank accounts and I have my list of accounts, I can see, oh, the mortgage account has $3,000 in it, the mortgage is going to be paid. So you could segregate your banking that way into different accounts for different purposes. And that way, okay, this is covered, that’s covered, and you want to cover the main ones first, cover the most essential buckets. And then if you have money above and beyond that, fill up the discretionary buckets, the travel and fun stuff,

Lee Rawles:

I can see how that would be helpful. Rather than looking at the one big bucket and then saying to yourself, well, there are Memorial Day sales coming up, and well look at that big number that’s in that one bucket. That’s fine. I can buy some new toys this Memorial Day. So

Darren Wurz:

That’s right. Or having to worry about what’s coming out of that and not knowing. And I want to just insert this real quick, a psychological trick for yourself. If you have one account that has, let’s say $20,000 in it, you will feel more wealthy and as a result, you’ll spend more than if you have let’s say five accounts with $4,000 in each of them.

Lee Rawles:

Sometimes for your own good, you have to trick yourself.

Darren Wurz:

Yes.

Lee Rawles:

Alright, well, we’re going to take another break to hear from our advertisers when we return. Let’s talk about the big one. Let’s talk about retirement and succession planning. Welcome back to the Modern Law Library. I’m your host, Lee Rawles here with Darren Wurz author of the book, the Lawyer Millionaire. So Darren at the top, we talked to young professionals who are just starting out in their careers and retirement may seem a long way away. Let’s talk about some other folks who may be listening, mid-career professionals, and then people who are getting close to retirement. You said something interesting in the book, which is that unlike many other professions, while law can be very taxing as a profession, it’s not as physically demanding as some other jobs. And so the retirement age can really fluctuate and many attorneys like to extend their work life. And so you ask people to think not necessarily about, okay, retirement as a work stops, but you’re encouraging people to think of living a work optional life where, hey, if you did decide to put down your pen, you could, you’re financially prepared. So let’s talk about that. When you are helping people work their way towards a work optional lifestyle, what are the things that you really tell them to keep top of mind?

Darren Wurz:

Yeah, absolutely. I think this is a much better way of looking at retirement for lawyers and especially for law firm owners. Many lawyers don’t want to retire. It can be very difficult to think about that. I mean, your identity is often wrapped up in what you do. And so the idea of retiring is like, oh my goodness, what would I do? And rightly so because I forget exactly what the number is, but I think it’s something like 75% of business owners who sell their businesses regret the decision to sell after they’ve done it. And that’s because they didn’t do any planning about what else they wanted to do. So I think one of the big reasons that people want to get out of legal practice is just that it can be so demanding on your time. And what a lot of folks are looking for is not necessarily, I want to get out completely, but I want to have a little bit more time freedom.

Lee Rawles:

Well, and the flexibility to say, I don’t need to take this client. I am going to take the clients and the work that I am interested in and that I find fulfilling.

Darren Wurz:

And it is really a very similar way of looking at retirement, but it’s a language change that really changes your perspective. So instead of saying, I want to retire at 65, you can say, I want to be work optional by 65. I still want to have the same target. I still want to target the same amount of money, but I can still have some flexibility and it doesn’t mean that I’m going to completely retire. And I think a lot of folks think that. Here’s one I run into. People have this misconception that when they file for social security, they have to retire. I’m like, no, actually you could file and keep working. So let’s think differently. One of the powerful things about continuing to work is you may not need as much money. So hey, that could be cool and maybe we can plan for that. Maybe we could plan for, you’re going to continue working part-time in retirement, and as a result, we can plan for having a stream of income for some period of time after retirement age or whatever. That’s going to reduce the amount of money that you need to accumulate, which can be very powerful.

Lee Rawles:

You also make a real point in the book of talking to lawyers about, I would call them protective measures. So life insurance, disability liability, all those things. You have a number of tips about how and why to take those into account. But also when you are planning succession for your practice, where are your clients going to go? And you mentioned the possibility of selling your practice, and I have not seen as much discussion, I would say, among a lot of solos when it comes to, oh, I could actually, this could be another financial asset. I have spent my entire career building up my client base and accumulating goodwill in the community. And instead of my succession plan being gradually shutting everything down and making sure my clients are handed off to someone else who could take care of it, and being a winding down, you actually can use that as an asset itself. Could you talk about that just a little bit? Obviously there’s more in the book about exactly how this is done.

Darren Wurz:

Yes, Lee, this is my favorite topic of all because there’s so much potential here, and there are so many different ways you can think about this. Let’s say you have a solo practice, you, like you said, you’ve built an asset and your law practice may be your largest financial asset. You may not realize it because no one has told you that, or you may not be aware of what kind of value it has. I talk to so many law firm owners who feel like their practice doesn’t have any value, and it may not from the perspective that it may not be transferable yet. And most law firm owners, the objection that I get to why they should sell their firm or think about selling it as an asset in the future is, well, who would want to buy it? Is it really transferable? These are the same issues that every business owner faces.

Business owners across all industries face very similar challenges around transferability, owner dependence and turning their business into a sellable, truly sellable asset that someone else could pick up and run with. Now, there’s lots of ways you could do this. If you’re a solo, one very easy way to do this, you could merge with a bigger firm. And the powerful thing about that is you could get some compensation for coming on board for bringing your practice over, and then you could continue working and maybe a reduced capacity. You could continue that work optional plan. You could become of counsel, continue to serve as your existing clients while working to slowly transition those relationships to other attorneys within the practice. Another idea, what if your practice could be extremely helpful to a young attorney just starting out now that could take some more work, bringing on somebody who’s fresh out of law school, kind of training

Lee Rawles:

Them, also mentoring, right?

Darren Wurz:

But that could be life-changing for somebody that could be so powerful. Think about if you started your own practice. Think about the work, the blood, sweat and tears that you had to go out there and find the clients and do the work. And it’s tough. And no, you can’t sell a client relationship obviously, but you can help facilitate a transition of those relationships to your successor. And how powerful would that be for someone stepping into your shoes? But you want to think about how you could potentially maximize the value of your practice because the value of your practice is going to be a range. It is going to be a range of values. Most people think that profitability is the number one factor that determines how valuable their practice is. It’s, I mean, it’s a very big contributor. It’s half of the equation. But the other half of the equation is have you positioned the practice to run without you? And if you have achieved some level of owner independence where your team can function without you for the most part, and you’ve kind of stepped into more of a leadership position, you have really developed a transferable asset. So you want to think about your systems, your processes, your procedures, your intellectual capital, your human capital, the people you have on your team, all of that stuff is extremely valuable to somebody else potentially.

Lee Rawles:

And lastly, I’d love to talk about the mid-career professionals. And here’s one thing that has just popped up. Obviously this isn’t in the book because this is more recent. A lot of mid-career professionals are being impacted positively by law student forgiveness. Now, whether that’s through the public service loan forgiveness program or the Biden Administration’s student loan forgiveness, a lot of mid-career professionals all of a sudden have a different financial situation than they thought they had. I’ve seen people post about literal hundreds of thousands of dollars of debt that they had suddenly they no longer have. So let’s say you’re in the middle of your career. Maybe you even had a plan, maybe you had this destination. All of a sudden, it’s not a bad problem to have. It’s a great problem to have. But how should the people who are experiencing these loan forgivenesses respond financially?

Darren Wurz:

Well, don’t go out and buy a Maserati. I would say think carefully about the amount of money that you were directing towards that debt, right? Let’s say your debt payments were a thousand dollars a month or whatever. Where now should we direct that money? Right? Don’t let fizzle out. Don’t let that just kind get absorbed into everything else in your life and don’t immediately upgrade your lifestyle. Maybe some upgrades would be available to you or okay for you, but I would say prioritize some savings and some wealth building out of part of that money. So identify how much money was going towards debt, and then think about where you want to redirect that. Strategically, how much do you want to direct your investments? How much do you want to direct towards maybe some improvements to your lifestyle? How much do you want to direct maybe to charity, right? Maybe this is the time to start becoming charitably minded now that you have some additional cashflow. So that would be how I would encourage people to think about it.

Lee Rawles:

Well, Darren, thank you so much for joining us for this episode of the Modern Law Library. If people want to hear more from you, you have your own podcast and would love to hear more about that. And if people want to reach out or pick up the book, the Lawyer Millionaire, the Complete Guide for Attorneys on Maximizing Wealth, minimizing Taxes, and Retiring with Confidence, how can they do that?

Darren Wurz:

Yeah, I’ve made it very simple for folks. You can just go to the lawyer millionaire.com there. You can learn more about me. You can schedule a call with me if you want to talk one-on-one. We also have the book, and the podcast is there as well. Also by the same name, the Lawyer Millionaire. You can find it on Apple, Spotify, or wherever. We talk with successful law firm owners about their secrets to success, and we dive into financial planning, insights and business insights on growing your business and expanding. So great resource for all your listeners.

Lee Rawles:

And thank you listeners for joining us for this episode of the Modern Law Library. If you enjoyed, please rate review and subscribe in your favorite podcast listening service. That’s very helpful. Gets us to the top of the algorithms. And if you have a book that you’d like me to read, having the author on to discuss, you can always reach me at books at ABA Journal dot com.