Latest / Wealthy Woman Lawyer Podcast, Helping you create a profitable, sustainable law firm you love / Episode 280 Most Popular 2024 |The Dirty Word No Law Firm Owner Wants to Utter

Transcript

Episode 280 Most Popular 2024 |The Dirty Word No Law Firm Owner Wants to Utter · Wealthy Woman Lawyer Podcast, Helping you create a profitable, sustainable law firm you love

• 0:01
  Intro: Welcome to the Wealthy Woman Lawyer podcast. What if you could hang out with successful women lawyers? Ask them about growing their firms, managing resources like time, team, and systems, mastering money issues, and more. Then take an insight or 2 to help you build a wealth generating law firm. Each week, your host, Davina Frederick, takes an in-depth look at how to think like a CEO, attract clients who you love to serve and will pay you on time, and create a profitable, sustainable firm you love.
• 0:31
  Devina is founder and CEO of Wealthy Woman Lawyer, and her goal is to give you the information you need to scale your law firm business from 6 to 7 figures in gross annual revenue so you can fully fund and still have time to enjoy the lifestyle of your dreams. Now here's Devina.
• 0:51
  Davina: Hi, everyone, and welcome back to the Wealthy Woman Lawyer podcast. I'm your host, Devina Frederick. And today's topic might be a little bit painful. The title of this episode is the dirty word no law firm owner wants to utter. And no, even though it's February and everyone has Valentine's Day on their minds, that word is not love or relationships or marriage or anything like that.
• 1:16
  Before I reveal this heinous word, I wanna share with you how I came to know this information. For the past 10 years, I've been coaching women law firm owners, and I've literally had hundreds of conversations during that time with women law firm owners about their goals. When I meet a prospective client or I work with a new client, I ask, what is your goal? In other words, what do you hope to achieve by scaling your law firm business to and through $1,000,000 in gross annual revenue? What do you plan to do with that newfound wealth?
• 1:50
  And the top goals across the board are number 1, spend more time with kids, if they have them, or other family members or friends. And number 2, travel more, preferably internationally. So the goal I would fully expect to come up in conversation the conversation, but which never does unless I mentioned it first is save for retirement. And yes, it seems like this is a dirty word that no woman law firm owner wants to utter. And lately I've been thinking a lot about why that is.
• 2:23
  Before I delve into my thoughts on the subject, let me define preparing for retirement as I mean it because it may be different than what you think of when not when you hear the word retirement. What I mean when I'm asking other women law firm owners, are you prepared or you need to be better prepared for retirement? I'm asking whether any planning has gone into setting aside and investing money for future you. So if anything comes up in your life, that will cause you to maybe scale back on work or quit working as a lawyer altogether, or your life changes due to personal issues or illness or reasons, you'll financially be equipped to do so. As a former divorce lawyer and someone who's been through a divorce myself, I also know what can happen if a once happy marriage turns sour and nobody expects when they're going into their marriage that their marriage is going to end in divorce, but it does happen a lot.
• 3:20
  And women are often not financially independent or prepared to build their own wealth without a spouse. Also, as someone who's going to be 59 this year, I'm very aware that's also the average age of widows in the US. So fortunately, my husband is young and healthy, and my prayer is that he and I both stay that way for decades to come. But I know that that is a very real statistic. And I also know that anything can happen at any time to change our lives drastically.
• 3:51
  And most women I meet are woefully, financially unprepared. And it kind of surprises me that I think of these things, but I have conversations with so many intelligent and well educated women who don't seem to worry about quote unquote retirement. And I've always been curious about this disconnect. So I thought I'd explore it today. And I'd love to hear your thoughts as well.
• 4:14
  After you listen to this podcast, hop on over to our free Facebook group for women law firm owners only. It's called Wealthy Woman Lawyer. And the link is in the show notes. And I want you to share your thoughts on this podcast thread. And let me know what you think about when you hear the word retirement.
• 4:31
  And maybe if you're avoiding, investing or saving for the future, share why that is. So here are five reasons why I think women law firm owners don't want to think about retirement or talk about it, or hold it out as a goal that they want to achieve. Alright, so number 1 is they don't like the word retirement because they can't ever imagine retiring. They believe the definition of the word means to stop working and start doing nothing. And they can't ever imagine themselves not working or just doing nothing.
• 5:02
  I get that. I feel the same way. I can't imagine ever not having a purpose, in my life. And there's the old adage, old lawyers don't retire. They just die at their desk.
• 5:14
  And I think that's kind of sad. But I think where it comes from is that when you become an attorney, it changes your identity. It's not just what you do, but who you are. It's why so many attorneys have a hard time leaving the profession even when they're dissatisfied or unhappy. We quickly get used to the automatic prestige and respect that the word attorney conveys.
• 5:36
  And the notion that never being an attorney again is unappealing at best and really frightening at worst. We imagine ourselves being attorneys until we die. And what we don't often take into account though is that life can change. And even if we no longer practice, perhaps due to our age or illness or some other, shift in our family life, no one could take away our accomplishments or our identities. Hopefully your identity is so much more than attorney anyway.
• 6:07
  I know I want mine to be. Also hang out with 70 80 years old 80 year olds as I have done. I have my parents are in their eighties and a lot of family members in their seventies eighties. And also I'm from Florida, so there are a lot of seventies and 80 year olds there. You'll soon realize that retired people are some of the busiest and most purposeful individuals you'll ever know.
• 6:29
  In fact, many don't begin to live out their true purpose until they are free from that work world obligation. So retirement doesn't mean to stop living, but it may mean a phase of life where we cannot bring the hustle that we once could, or at the very least, we may have no desire to bring the hustle like we once did. Alright. Number 2, the second reason I hear most often, why people don't, have a goal of saving for retirement or investing for retirement is my spouse takes care of our retirement retirement. If you have a spouse who has a great retirement plan, and you know all the details of the retirement plan, you are the named beneficiary, you've seen that document, should something happen to them, and you have access to all the information, then congratulations.
• 7:16
  I'm really proud of you and happy for you that you have that. That said, most times women whose spouses handle retirement funds don't know all the details and often they must go ask their spouse. And that concerns me. So if that's you, I hope it concerns you too. Because as lawyers, we know what can happen if people don't know the details of their finances and they don't have access to them.
• 7:40
  So I would say, if your spouse is taking care of retirement, and you've kind of got your head in the sand a little bit about that, I would sit down and have a conversation with them and get them to show me everything. Alright. Thirdly, the third reason that, women don't really set retirement as a goal is they prioritize living in the moment over preparing for the future. So there is something to be said for spending money on travel while you're young, for instance, or and not waiting until you quote unquote, retire to live your best life. You may in fact be unable to travel by the time you're in your eighties.
• 8:16
  That's certainly the case with my parents, who while they could travel, probably wouldn't enjoy it now because of their physical limitations. Fortunately for them, they spent a lot of time traveling when they were in their 50s. As someone who loves to travel, I can really appreciate that live for now philosophy. Some women have told me how someone they've loved has been close to them has passed away early in life, and never had the chance to chase all of their dreams. And that can be a powerful influence on the way you live your life.
• 8:49
  So I'm all for traveling and spending money on all those experiences and things that we love and what brings you the most joy in life. And a fair amount of living in the moment is required, I think, really to live your best life. Still, as with most things in life, balance is good and something to strive for. Because there could be a 90 year old you one day who is eating cat food because she didn't save or invest anything for the future. No?
• 9:21
  Is that just me? Am I the only one who thinks this way? If you think that will never be you, then I wanna let's do some math together. This is simple, easy math. So just follow along with me.
• 9:32
  If you retire at age 65, and most people tell me they plan to retire a decade or 2 more than that, you women law firm owners, you really wanna retire in like forties fifties, but let's say 65 for our purposes today and you live to be 95. The average age of life expectancy for women in the US is about 81 years old. But I feel optimistic giving our 1st world resources. So I'm gonna say 95. And that's 30 years of income that you will need if you decide that you don't wanna work anymore as a lawyer or anything else, or maybe a part time doing something else.
• 10:07
  Not considering taxes, inflation, medical expenses, and other more complicated factors that would be a challenge for us to, calculate. Let's say you need a total of $50,000 a year for that 30 years. That means you'll need to have access to $1,500,000 in total for your that period of your life. Now if you're like most women law firm owners, I know $50,000 a year is not going to cut it. Most of us expect that we'll need at least 6 figures a year, at least $100,000 a year.
• 10:42
  So 30 times a 100,000 is $3,000,000 that you will need in a nest egg for that period of your life. If you wanna quit working early and or live in the laps of luxury, during that period of life, then you may need more. You may require more. Of course, if you only live to 85, and you don't retire until you're 70, and you like to live frugally, then you may not need as much. But most women law firm owners I meet don't plan to work full time until the age of 70.
• 11:11
  And many of you are used to the good life and probably will not want to get that up. You don't have to follow my math. But I do encourage you to do the math for yourself based on your own desires and needs, and really get a handle on what kind of a nest egg you would need if you live to be a certain age. Alright, the 4th reason that retirement, that people don't like to talk about retirement to think about retirement, is it seems like something only boomers get to do. Some Gen Xers, most millennials, and probably all Gen Zers are pessimistic about whether they will ever be able to enjoy the luxury of retiring as it's been defined in the past.
• 11:53
  We worry that all the Social Security we've been paying into won't be there for us when we need it. Because we know the baby boomer retirement wave is coming, and likely will deplete those resources or a lot of those resources. Many younger generations feel homeownership is out of reach, and rightly so. So generations of people may never be able to buy a house and pay it off before retirement like the boomers did, and the silent generation like my parents. Plus, we live in the gig economy age, where many expect to live a life that only retired people got to live generations before.
• 12:29
  We can be retired now living and working from anywhere making just enough money to cover our needs as we go. So why wait and save for the future? Well, there are many reasons why you want to do that, because you may not be able to actually work like you can now in the future. But not to mention that we all that a lot of, women law firm owners tell me they have hefty, never ending student loan payments that, can prevent them from saving and investing. Many tell me they can't even think about saving or investing for the future because they're so burdened by student loans.
• 13:07
  Yet weirdly, few ever tell me except as an afterthought that one of their goals is to pay off their student loans. Maybe because it's not sexy, but mostly probably because people feel so defeated about it. And certainly with the way the student loans are set up these days and the interest, it I can understand that. And a lot of people have given up on the idea they'll ever be able to pay off their loans. I wanna say that was encouragement to you.
• 13:33
  Women law firm owners are in a unique position to create unlimited income if we understand how to do so. Income to pay off student loans, to buy a house, to travel, and to prepare ourselves for the future financially. It it's not something that will likely happen overnight as many would have you believe, but it can happen. And the sooner you get started on generating, creating a higher income for yourself, the more you will have to invest over time and the more you will enjoy the benefits of compounded interest on those investments. I am not a financial advisor by any means, full disclosure.
• 14:12
  But one lesson I wish somebody had taught me a long time ago when I was much younger is that yes, you need to pay off your debt. But what you do not need to do is to not save and invest until all your debt is paid off. Now, there are a lot of financial gurus out there who are gonna disagree with me on that. But here's my reason. The reason is because I've seen people pay off debt, thinking that they will start saving and investing after all the debt is paid off, only to find themselves running up new debt, some emergency happens or some big change in their life happens, and they start running up debt again.
• 14:48
  And they start that cycle all over. And so they wind up never saving or investing, anything much less what they need for the future, because they're always with this goal of paying off debt first. So do both at the same time. Lastly, I think many women law firm owners don't wanna think about retirement or discuss retirement is they ignore preparing for their financial futures, thinking that everything will sort of magically all work itself out somewhere along the way. Learning about financial matters like taxes and investing can feel daunting, especially on top of owning, operating, and growing a law firm business, taking care of growing families, and traveling around the world.
• 15:28
  Even the savviest of us may feel overwhelmed by it all and wanna bury our heads in the sand. That is to say that 2 things. 1 is if you can get into law school, graduate law school, pass the bar and start your own law firm, then you are intelligent enough to figure out financial matters like investing and taxes. And also to your just like your physical and your emotional health, your financial health is too important to ignore. We live in a capital society, and it can be and often is expensive to do so, especially if we have big goals and dreams for our lifestyle.
• 16:08
  Just as it should be a priority to take care of you today, it all should should be a high priority to take care of future you above paying a priority above paying for your children's college above buying a house above taking care of others except minor children. I know for parents that is a highly controversial statement. But the reality is it will be a much bigger burden on your children. If you do not have if you've not adequately prepared for your financial future than it will be for them if they have to work and earn some scholarships to put themselves through college or pick an alternative career path. Perhaps this time we retired the word retired and come up with a better word that better represents how people live and work today.
• 16:55
  Until we do though, don't let your discomfort with the concept of retirement prevent you from making and executing a financial plan to protect future you, she is more than deserving of it. So those are some of my thoughts on preparing for retirement. I'd love to hear your thoughts. So be sure to join our free Facebook group Wealthy Woman Lawyer. Again, the link is in the show note show notes, and you must be a woman law firm owner to join.
• 17:24
  I hope you've enjoyed this week's episode. Even though it may have felt a little uncomfortable to discuss this topic, my goal for this podcast is always to inform and to encourage and really be able to tackle some of the things that we people don't talk about in polite society. If you've been feeling unprepared to take care of future you because you're not generating enough revenue and not taking home as much profit as you need or want, then I invite you to click on the link in the show notes to schedule a conversation with me about how I can help you create your own profitable, sustainable, wealth generating law firm, Machine. Until next week, I wish all of you joy, peace, and abundant resources. And I thank you for listening to the Wealthy Woman Lawyer podcast.
• 18:09
  Intro: If you're ready to create more of what you truly desire in your business and your life, then you'll want to visit us at wealthy woman lawyer.com to learn more about how we help our clients create wealth generating law firms with ease.