Chapter 1: The Myth of Wealth

Many individuals assume that increasing their earnings is the sole path to financial success.

"Of course!" you might exclaim. "We already know that higher earnings lead to greater wealth."

However, allow me to offer a different viewpoint. My journey began in a prestigious New York law firm, renowned for its exorbitant starting salaries for new associates.

What value does a junior lawyer bring, earning upwards of $200,000 annually, when they possess minimal skills? Keep in mind, these figures reflect current salaries, not what I earned at the start of my career!

For most junior lawyers, possessing a modicum of self-awareness, this scenario feels like a grand illusion, and they sense there must be a catch. And indeed, there are several.

To begin with, those starting lawyers will face intense workloads—significantly intense. For me, it was my introduction to the reality of working 100-hour weeks. For those who enjoy math, that's over 14 hours daily, without weekends or breaks.

Looking back, I can appreciate those challenging days. Why? Because no one else's notion of a long week could compare. Transitioning to an in-house counsel position, where I worked only 60–80 hours weekly, felt like a vacation. I genuinely perceived a 40-hour workweek as part-time.

Another catch is that, despite those jaw-dropping salaries, the law firm bills clients at a far steeper rate. A typical annual billing of 2,000 hours, which was considered modest when I began, at an hourly rate of around $500, implies that your firm is charging clients $1 million for your services.

Sure, the firm has overhead costs and doesn’t bill for all your time, but there's still a handsome profit margin. This business model is highly leveraged, relying on the labor of associates.

It's safe to assume that law firm partners are savvy in promoting those eye-catching salaries, which is why over 80 law firms in the US report profits exceeding $1 million per partner.

Returning to the idea of wealth, one would think that making $200,000 or even $1 million annually guarantees financial prosperity. Unfortunately, for many, their income doesn’t equate to their likelihood of amassing wealth.

Why is that, you wonder?

Consider the scenario of being a lawyer in New York City, where I found myself. Like most major cities, the tax burden is steep (often around 50% total), and living costs are high (30% for housing and another 10-15% for daily expenses). You might end up with just 5-10% of your gross income to spend.

Where does it all vanish? Here are some possibilities:

• Employing a nanny or a housekeeper.
• Taking lavish vacations because you work so hard and deserve a break.
• Owning a second home, as your family shouldn't have to wait in a cramped city apartment while you work long hours.
• Funding your children’s college education.

Far more critical questions in assessing someone's potential for wealth include:

• What portion of your income can you save?
• Are you able to consistently spend less than you earn?

If you can manage to spend less than your income and begin investing your savings in low-cost funds that mirror the broader stock market, you are setting yourself on the path to harnessing the power of time and compound interest.

Among us are individuals who have made significant strides toward independence with wealth levels that defy traditional expectations.

I’m referring to those embracing the “Financial Independence, Retire Early” (FIRE) movement, who exemplify that you don’t need substantial financial resources, as typically defined, to experience happiness.

One common misconception is believing that substantial money is necessary for wealth. Another pitfall is equating income with wealth and overspending.

The true keys to wealth, health, happiness, and much more lie in small, consistent actions taken over time.

Spend less than you earn, regardless of your income, and you will set yourself on a path toward positive outcomes. With patience, good things will follow.

Be well.

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An earlier version of this article appeared in the ACC Docket, the global publication for the Association of Corporate Counsel.

Chapter 2: Insights on Wealth Building

The first video titled "How to Get Rich" provides valuable insights into the mindset and strategies for accumulating wealth. It emphasizes that the journey to financial success often involves understanding your spending habits and cultivating a savings discipline.

The second video, "How to Get Rich from $0 (I Was Homeless Until I Learned This…)", shares a personal story of transformation, illustrating that wealth is not solely defined by monetary assets but rather by mindset, persistence, and smart financial choices.