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A lawyer recently got a $200,000 job at a law firm but called financial guru Dave Ramsey to establish his exit strategy. The lawyer doesn’t enjoy the job but sees it as a valuable resource to pay off $88,000 in debt and build wealth quickly.
The caller told Ramsey that the job isn’t sustainable and that he works more than 80 hours per week. He also said that he wants to eventually leave the job and become a government prosecutor, which would involve a big pay cut when he makes that jump.
Ramsey then shared how he would approach the situation and gave the caller advice.
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Ramsey immediately suggested that the caller stick out until, at a minimum, he pays off the $88,000 debt. The lawyer is on board with this idea and believes he can keep it up for two years. That gives him enough time to pay off the debt and make progress toward building wealth.
Becoming debt-free can produce an ROI on the lawyer’s years in law school and set him for a more flexible position in the future. The most immediate need is getting rid of debt, because it will continue to accumulate interest as it remains unpaid.
It’s no surprise Ramsey focused on paying off debt instead of investing in stocks. He is against having any type of debt and paying it off as quickly as possible, even if you got a low mortgage rate before the pandemic.
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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 debt, he wasn’t as happy about the lawyer’s projected career path.
The caller was set on becoming a government prosecutor after working at his current job for two years. The caller told Ramsey that government prosecutors usually earn $80,000 per year and top out at $120,000 per year, a steep income decline.
“Don’t get trapped in the nuanced thinking that there are two options,” Ramsey said.
Ramsey then suggested looking at other forms of law to boost earnings. That way, the lawyer may find a job that pays closer to his current job while having more flexible work hours.
