About Me

Making it as a lawyer

When I made the decision to go to uni and study law, I had visions of myself as a qualified lawyer earning enough to be able to live the lifestyle I wanted, beyond what my parents were able to.  I was aiming for the next level.  My parents worked hard to move from working class to what is now referred to as entry-level-middle-class.  I wanted to shoot for more.  I indulged in that fantasy for far too long before reality finally struck me... that I simply couldn't afford the lifestyle I had been living if I ever wanted some sense of financial security.

Sure, I could afford my monthly payments and month-to-month things were fine,  I enjoyed new cars, holidays and the latest gadgets, but never really paid for them.  Because of my profession, I had lenders bending over backwards to give me loans, credit cards, overdrafts, and it all seemed far too easy.  I did't need to worry about paying it back, as long as I could cover the monthly payments, I would make so much money in the future as a lawyer that this debt would be a drop in the ocean, right?!  Wrong.  That mindset of always waiting for future pay rises tomorrow to pay for the things I was buying today got me into debt and kept me there for 15+ years.  

I had to fund my way through university with student loans but my spending habits then were nearly as bad as they grew to be later.  I spent everything I was "given" without really a thought about paying it back.  Fast forward to 10 years into my career, I am a salaried Partner in a law firm so I have made it, right?!  Wrong again.  My professional career is going well but I never stopped to fix my broken spending habits along the way.  At 38 I have no savings and live from one payday to the next.  My non-mortgage debt totals over £55,000 (see below), which is all from consumer spending, as my student loans were paid off some time ago but the borrowing habit stayed with me.

Changing my outlook

I don't recall exactly when I started re-thinking my life and it certainly wasn't an instant change.  It is still an ongoing battle, as I try to work out how to turn my financial position around and pursue a life of Financial Independence and security instead of financial dependence and stress.  

It started when I was working in the City, on my daily grind of a train journey, listening to podcasts instead of music and getting different perspectives on personal finance and personal development generally.  

The biggest turning point came for me when I read the classic personal finance book, Rich Dad Poor Dad.  My wife read it too and it had the same effect on her.  This is a book I think every adult should read.  This is the point I can identify lclearly as being the moment when I started viewing things differently.  I didn't cure all of my consumerist tendencies, nor did it set me on the right path immediately, but it started a chain of events that would alter the course of my life, both personally and professionally.  

I will write more about exactly what I did after reading Rich Dad, Poor Dad in another post and talk about the start of my journey into property investing, which is something I will continue write more about as my investment journey continues.  For now, I just want to mention that one of the big changes this lead to was me leaving the high paid City job to join a smaller firm and get a better quality of life.  That was a huge change for me and, again, something I will write about separately in a future post. That alone brought financial challenges for a couple of years until my salary caught up with where it used to be.

My personal development journey continued down the road of reading personal development books (my favourites of which are listed in my Reading List here and consuming other peoples' blogs, YouTube videos, websites and inspiring content wherever I could.  I absorbed as much information as possible, which throws up conflicting views and confusing issues a lot of times but I will try to explore those in this blog and give my take on them.  

One thing I learned was that I had to take action.  Waiting for that future large income or bonus was not an option and it may never come.  It was time to be a grown up and take back control of my financial future for my own sake and that of my family's.  

My Financial Starting Point

At the time of writing this post, my financial position looks like this:

DEBTS:

    Credit cards (of which I have 3 with balances) - £18,000

    Unsecured loans - £18,000

    Car finance - £20,000

    Mortgage on our home - £350,000

    Total personal debt - £406,000

ASSETS:
    Home equity of circa. £150,000
    Savings - None!
    Joint income - £100k p/a together
    Investment properties (of which we currently have 2):
                       - £600 p/m total net income (after expenses but before tax)
                       - £50,000 equity

I don't count the investment mortgages on the buy-to-let properties as liabilities, because both properties have a positive net cashflow.  I use the Rich Dad, Poor Dad definition of assets and liabilities now: 

     Assets put money into your pocket; Liabilities take money out.

I view my home as a liability, despite the equity in it, because it costs money every month, which means I have to continue working or generating income to pay for it.  My investment properties make me money each month, so in my book, they are assets.  

I know many people might look at this and say "Oh, they've got a 6-figure joint income and his wife only works part-time, they will be set for life..." but that is exactly the attitude that got me into debt and kept me there for so long and this is something that people in professional careers are even more susceptible to, because they expect to earn big in the future and solve all of their financial problems.  I have almost no pension investments either, which is something else I will write about separately, as that is a big topic all on its own.    

It doesn't matter what your income level is if you do not control your spending and your lifestyle.  Keep lifestyle in check as you progress through your career and things will be fine.  But if you fall into the trap that I did of thinking "I'm a [insert chosen profession] now, I deserve to have nice things and I should be seen in a big house and driving fancy cars", then you will never escape the 9-5 grind.  

My Goals

I am keeping my goals clear and simple.  They are:

1. Pay of the credit card debt as fast as possible;

2. Pay off the consumer loan and car finance as fast as possible;

3. Build a Security Fund (which for us is at least 12 months' worth of expenses);

4. Invest towards FI at the same time as then trying to pay our home mortgage down as quickly as we can.  

I have more specific goals and checkpoints that I will share in a further post with more detail but this is the high level picture of what my family and I are trying to achieve.  

I will be writing about my journey and I would welcome your thoughts, advice and encouragement along the way.  

Thanks for following along.

Jake