Confessions of a Laid-off Lawyer

Just Your Average Joe Blogging Away His Debt—In One Year or Less

Keeping It Down

with 4 comments

Total Black: $143.32
Total Red: $226,236.75

Finally!  My debt is slipping back!  In fact, I’m so ecstatic over this news because it is the lowest my debt has come since starting this project!  Even if a portion of the reduction in total red belongs to an as yet uncapitalized amount, the total is still down.  At this point, I’ll take whatever I can get.  Now just to keep it down.  And speaking of keeping it down, I arrived home to a curious piece of mail with another set of my financial data kept down in records.

The Social Security Administration periodically sends out a statement of estimated benefits and an earning record.  I never know what to do with that form so I typically glance at it, smirk at the portion that tells me I’m qualified for disability benefits and then push images out of my mind where I’d need to call on that benefit, and then toss the form into the recycling bin.  Today though something struck me: the Social Security Administration keeps a record of your annual income and includes it in the statement.  The financial data intrigued me so much that I’ve posted my data below.

1992     $3,441
1993     $4,282
1994     $3,029
1995     $1,396
1996     $5,159
1997     $4,383
1998     $8,111
1999     $4,534
2000     $2,700
2001     $1,485
2002     $0
2003     $0
2004     $580
2005     $39,132
2006     $34,716
2007     $164,677
2008     $234,045
2009     not yet reported

I started working before 1992 because I had a paper route as a lad, so these records aren’t complete.  But it is fascinating to look back at my total income over the past eighteen years.  From 1992-1994 I worked in a supermarket.  From 1994-1996 I worked various mall jobs and telemarking jobs.  I served in the United States Peace Corps from 1999-2001 and studied in Germany from 2001-2002.  Law school and graduate school covered the years from 2002-2006, with my summer associate position happening in 2005.  And 2006-2008 I worked at the law firm as an associate.  A quick glance at 2008’s income and you see why I owe over $28,000 in taxes.  Clearly I’ve never earned that much.  And I only had two years as a six-figure earner.  I forgot that I didn’t work in 2003—the only year over the past two decades.  I did work in 2002 but that was in Germany while studying abroad and wasn’t enough to report to the United States Government.

A lot of data can be extrapolated from the numbers above.  For 1995, for example, one could look up federal minimum wage for that year, assuming that was my rate, and calculate the amount of hours of my life I spent working that year.  Not possible in 2008, for example.  And if I calculated the numbers correctly, I’ve earned $511,670 over those eighteen years, clearly the bulk of which occurred in 2007 and 2008.

It’s amazing how one’s life can be mapped out in numbers so clearly.  Or is amazing the wrong word to use?  Frightening, perhaps?

Off to bed.  Gotta get into work early tomorrow.  I took today off—well, from the contract attorney job at least.  Got both jobs to work tomorrow.

Written by Laid-off Lawyer

February 27, 2010 at 22:26

4 Responses

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  1. Why are you not on IBR for student loans, and why are you not moving yet to mitigate your cost so that you can spend more in the IBR?

    advice

    February 27, 2010 at 23:27

  2. What the numbers illustrate, is the fallacy of paying new law grads $160K plus bonus. I’ve been a lawyer for 10 years, and only now am I earning $140K. My salary progression was slow, but it is >sustainable<. I have real experience and expertise in a valuable niche.

    I expect to earn $200k within 5 years, after a few more years of hard work. I can't fathom why anyone would pay someone with 1-2 years of experience so much!

    The law firm model is broke– they should be recruiting lawyers with 3-5 years of real experience from the SEC, FDA, etc., pay them $120-$150k and train them to become corporate lawyers– instead of the naive 24 year-old new grads who come straight from undegrad to law school.

    Jonathan

    February 28, 2010 at 12:59

  3. What i really want to know is how much debt you started out with once you finished ALL schooling. Presumably, you were able to take out most of those loans without actually having to pay while in school (and most probably did not accrue interest, although some probably did).

    As far as I can tell, at the same point that you really started raking up debt (i.e., during law school), you also started making more money than the average American, and by the time you were laid off, you had made at least 475K. Furthermore, I have no idea how much you have made during 2009, 2010, but I am assuming you made a somewhat substantial amount of money (I’ll assume some 25K, and I am sure that is on the low end).

    Accordingly, you made some 500K pre-taxes, and post-taxes could not have netted less than 375K (assuming you could take advantage of quite a few deductions/credits throughout the years).

    So, how in the world do you still owe some 230K to your creditors? Prior to your job termination, you had made 375K net! Assuming, on the extremely high-end, that you lived off some 40K during the last 4 years post-school, you still should have netted some 215K! What did you do with all of that money? Did you really start out with more than 200K in debt, coming out of school in 2006!? I’d like to see an accounting (doesn’t have to be detailed). As far as I can gather, you did not manage your finances well at all, and as such I don’t feel particularly sorry for you, but seeing the true numbers might change my mind just a bit. Anyway, just a few thoughts.

    anon

    February 28, 2010 at 17:39

  4. I love looking at stuff like that too. Thanks for sharing. I was going to post about the IBR too. You should do it so you don’t have to worry about the federal loans while you focus on paying off the higher interest debt. By the time you are ready to move on to the fed loans who knows maybe you will have met someone who is incredibly rich and wants to give you a ton of money. You never know. Anyway, I really enjoy the blog. I’m in my last semester of law school so I really empathize with you. Thanks for sharing!

    Heather

    March 2, 2010 at 11:01


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