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A lawyer recently got a $200,000 job at a law firm, but they called him a financial guru David Ramsey to establish your exit strategy. The lawyer doesn’t enjoy the job, but sees it as a valuable resource to pay off an $88,000 debt and build wealth quickly.
The caller told Ramsey that the job is not sustainable and that he works more than 80 hours a week. He also said he eventually wants to leave the job and become a government prosecutor, which would mean a big pay cut when he makes that jump.
Ramsey then shared how he would approach the situation and gave advice to the caller.
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Ramsey immediately suggested that the caller stay until at least the $88,000 debt was paid off. The lawyer agrees with this idea and believes he will be able to maintain it for two years. That gives you enough time to pay off debt and move toward building wealth.
Becoming debt-free can produce a return on investment in a lawyer’s years in law school and prepare him or her for a more flexible position in the future. The most immediate need is to get rid of the debt, because it will continue to accumulate interest as long as it is not paid.
It’s no surprise that Ramsey focused on paying off debt rather than investing in stocks. He is against having any type of debt and paying it off as quickly as possible, even if before the pandemic you had a low mortgage rate.
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Although Ramsey was happy to see that the lawyer had a $200,000 job and was willing to work hard for a few years to pay off his debts, he was not so happy with the lawyer’s projected career path.
The caller was determined to become a government prosecutor after working in her current position for two years. The caller told Ramsey that government prosecutors typically make $80,000 a year and top out at $120,000 a year, a steep drop in income.
“Don’t get caught up in nuanced thinking that there are two options,” Ramsey said.
Ramsey then suggested looking at other forms of law to increase profits. That way, the lawyer can find a paying job closer to his or her current job while also having more flexible work schedules.