In reading some investment books recently, such as Robert Kiyosaki’s Rich Dad Poor Dad and Cashflow Quadrant, I have been trying to answer some questions that have arisen in my own life. Lawyers, unlike business owners, cannot “inventory” their services. Meaning, if the lawyer is not working, and billing hours, then they are not getting paid. On the other hand, a business owner can spend his days on the golf course and as long as he has developed a profitable system, the business can continue to grow and prosper without his input. This type of passive income can provide for the business owner long into his “retirement” years. What does a lawyer do when he is ready to retire? What does a young lawyer do to prepare for his retirement down the road?
In general, the strongest part of being a lawyer is the ability to practice in a large amount of practice areas. Within many of these niches there is a strong opportunity to make a lot of money. In order for lawyers to build this passive income, they will not be able to become a senior partner at a firm and then do nothing until they die and expect the checks to keep coming. The key will be to live below their means – to be read: not spending all that they have earned, and converting this earned income into passive income as efficiently as possible.
How do you turn that earned income into passive income? That’s the question? Real estate? Developing your stock portfolio? Purchasing a small business that provides passive income? These are all answers, but I imagine that it depends on your personality and what works best for your situation.
More on this to come…
Hi,
I think being a highly paid professional, being able to retire comfortably is not that hard. As you mentioned, live below their means will certainly made it to comfortable retirement. But for most successful businessmen I encounter, they are like living a retirement life only after a few years in a growing business. Retirement might not mean doing nothing. I think financially free is more appropriate to describe them.
Hi,
Thanks for your comment and participation on the blog! I think that is what I am going after with this post. I have seen a lot of lawyers that are not “financially free” because they are stuck in the pattern of “working to live.” If they don’t work, then they don’t charge a fee, and they don’t get paid.
I don’t think I would be able to retire to “do nothing” but I guess I would like to have the flexibility to take off and do whatever I want from time to time.