In the world of personal finance, a little sacrifice goes a long way. Cost-cutting coupled with aggressive saving and the initial avoidance of money drainers like gas-guzzling cars, bar-bought booze, restaurants and fancy lofts will enable young law folks to repay their student debts in record time.
Some readers have been loathe to accept my advice. Indeed, they are correct in that there are many ways to tackle debt. One can manage debt without a rapacious attack. That being said, the young lawyer who lives downtown, hits the bars four nights per week, noshes at the food court every day, drives to work, purchases two skinny no-foam extra-whip lattes daily and refinances their debt multiple times over will be in debt for a lot longer than the wise counsel who chooses to follow the advice I’ve laid down. I have several friends who’ve made short-term sacrifices in favour of long term gain. After a few short years of practice, their debts have been abolished and they’re contemplating real estate purchases and investment opportunities.
Regardless of personal finance strategy, all young lawyers want to fatten their respective bottom lines. To do so, I advise all recent law school graduates to develop their financial literacy. As lawyers, we have substantial income earning and, consequently, investment-making potential. Therefore, best practice is to acquaint ourselves with the basics of investing.
This can easily be accomplished using the Internet, newspapers and financial advisors. Read The Globe and Mail’s “Report on Business,” the National Post’s “Financial Post” and Google Finance on a daily basis. Flip through an issue of the Economist or The Wall Street Journal while you’re riding the rocket to work. If you’re taking a break from contract drafting or factum writing, both Wikipedia and Wikinvest are excellent sources to learn about the basics of investing.
Young lawyers should get to know their financial advisor, as they are typically full of useful debt-repayment and investing knowledge. Discuss market trends, investment options and ask them to help you expand your financial literacy. I speak with my investment advisor at least twice a week. We discuss bonds, shares, mutual funds, TFSAs and RRSPs, among other topics. He has been invaluable to my evolution from financial know-nothing to informed investor.
I urge you to increase your financial literacy and expand your personal finance acumen. While everyone may have different investment, debt repayment and savings strategies, what we share is a desire to manage our personal financial affairs in ways that will lead to personal prosperity — and that’s the bottom line.
Adam R. Freedman practices corporate law in Toronto.
Photo by Chris Dodson