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After the Bar

Personal & Financial

The $83,583.20 Latte: Tips for Building Wealth

Jennifer Belmont Jennings JD CFP


  • There is a financial impact of small daily expenses, like a $6 latte, over time.
  • Regardless of income, lawyers must focus on building wealth through financial planning by identifying personal priorities, seeking professional financial guidance, finding life balance, making spending cuts, and prioritizing contributions to retirement plans.
The $83,583.20 Latte: Tips for Building Wealth
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Are you, by chance, reading this with a fancy cup of coffee in hand? Have you ever thought about what impact that cup of coffee could have on your financial future? My customized drink of choice (grande almond milk latte with one pump of sugar-free vanilla) is $5.98, basically $6.

You might be thinking, “I make plenty of money; I can afford a $6 latte.” Would you feel the same way if I told you it could potentially cost you $83,583.20? Perhaps you do not have a Big Law salary, and you are drinking the office coffee. I, too, have consumed the bad office coffee. As a financial crisis law school grad, I worried that I might never recover from the financial burden of law school coupled with the nonexistent job market in 2009. I did not learn anything in law school about personal finance, which only made things more challenging.

Whether or not your salary or student loan balance contains an extra zero, all lawyers can benefit from financial planning. Sometimes it is even harder to recognize the need for it when you have that Big Law salary. There is a difference between making money, though, and building wealth. Building wealth takes commitment and discipline, but it is the path that will help you enjoy that fancy cup of coffee in retirement. Below are some steps you can take as you begin your financial journey.

Remove Hurdles

Think about what is important to you. If the appearance of success is your number one goal, then you are not on the path to building wealth. There will always be someone who has more than you. Worrying about what your peers think is a hurdle. Remove the hurdle. 

Seek Help

You can only have one day job. Work with a financial planner whose day job is to help you prioritize and fill the appropriate financial buckets based on your unique circumstances. A planner can help you figure out how much emergency cash you should have on hand, a student loan paydown strategy, the best retirement savings vehicles for your situation, and how much you should be investing. Your financial planner can also help you avoid making poor financial decisions by pointing out tax consequences or how a decision might impact your long-term objectives.

Find Balance

Prioritizing does not mean you can not enjoy life (or an occasional latte). Build fun into your plan and understand how the decisions you make today will impact your future. I am willing to work an extra year or two if it means I can take vacations now. I am also willing to split that fancy entrée with my husband even if we can afford to have our own. Balance exists.

Make Cuts

Think about where your money goes. I often hear people say they do not have enough extra money to save. In non-pandemic times, what was your last bar tab? Did you HAVE to have $349 headphones, or would the $150 headphones have been sufficient? Dare I even mention using the ones that came in the box with your phone? How frequently do you buy that fancy cup of coffee? If you really examine your spending, you will likely find places where you can cut.

Pay Yourself First

One of the nice things about contributing to your work retirement plan is that you never see the money in your checking account, and it can’t tempt you to spend it. Be sure you contribute as much as you can to that 401(k) or explore other retirement options if you do not have a work plan. Many employers match a certain percentage of your contribution. You do not want to miss out on that extra money. 

Start Small

It is ok to start small. I started a nonretirement investment account with $125 a paycheck. When I began earning a little more money, I increased that to $150 a paycheck, and so on. Start with what you can. It will add up over time.

Don't Wait

You have heard of compounding interest, right? Check any online financial calculator, and you will not be able to deny the math. Using a 6 percent return assumption, $300 a month over 20 years yields $136,031. If you wait 10 years and invest $600 a month, you will have $97,484 after 10 years. You invested the same $72,000 in both scenarios, but time was on your side when you started earlier, even with smaller payments. That $6 Latte? That’s $83,583.20 over 20 years. The little things add up.

Unfortunately, there is no magic unicorn when it comes to building wealth. (If someone offers you one, run!) It takes commitment, discipline, and time. Decide to prioritize financial planning. You won’t regret it!