Happy tiny Friday friends! I’m excited for another installment of Student Loan Conquerors. Student Loan Conquerors is an interview series where I talk with some awesome people tackling their student loan debt head on and finding out how they are doing it and what inspired them to start in the first place.
If you are interested in participating please contact me and share a little information about your student loan debt situation.
Today, I’m excited to have Joshua Holt from Biglaw Investor. Joshua Holt is a practicing private equity M&A lawyer living in Brooklyn and working in New York. He blogs at The Biglaw Investor where he interacts with other lawyers who are trying not to do stupid things with their money. In addition to personal finance, he writes about financial independence, early retirement and investing. Now onto the interview!
When did you graduate and with what degree?
I graduated in 2009 with a law degree (and 2004 with a bachelor degree).
What was the maximum amount of student loans you owed and where do you stand now?
The height of my student loan debt was $191,984.91. I also had a $10,000 salary advance that I owed to my law firm because they let us borrow money to help cover expenses during the four months we were deferred from our original start date. That means a total of $201,984.91. It was pretty ugly. Today I have no debt of any kind.
When did you start to focus on your student loans and what motivated you to do so?
I started focusing on day 1 at the new job. I could tell that many lawyers in Biglaw had a brutal, nasty, and short career. This was during the Great Recession, so it was quite common to read about law firms letting go significant percentages of their associates.
I also recognized pretty quickly that the average 6.8% interest rates on my loan were causing a lot of problems. The first year I paid over $12,000 in interest alone on my student loans. That’s a shockingly high amount of money, even when you are fortunate enough to be making $160,000.
Since I had to clear $12,000 before I could even begin to make a payment on the principal balance of the loan, I knew I needed to move quickly and decisively if I had any hope of paying off the loans.
Nothing motivates you more than an impending feeling of doom. (editor’s note: YES!!)
What is the one action you’ve taken that has made the biggest difference in your finances?
Tracking my finances and being conscious about spending.
In my experience, most people make good financial decisions when they’re aware of what’s happening. The problem that trips all of us up is that we get busy with our real lives and money is spent (or decisions are made) without thinking through the consequences. Just being present and aware has made a huge difference in my bottom line.
What is the best piece of financial advice you’ve received?
As a high-earner, you should be doing all kinds of saving at the same time. When I first started, I asked myself the common question of whether I should focus on paying off debt, contributing to retirement accounts, investing or saving for a down payment.
Then someone told me I should be doing all four and a lightbulb went off. It wasn’t going to be “good enough” to save $18,000 a year in my 401(k). I needed to do it all and I needed to do it at the same time. This meant maxing out my 401(k), getting in on the student loan refinancing and saving cash for a down payment.
I’m extremely lucky to be in such a position but getting caught up focusing on only one financial goal is an easy way to let money slip through your fingers. When I realized you should be saving for everything, it really put the pressure on me to make significant savings on my debt.
Related: How much money should I have saved?
What is one piece of advice you would give to others paying down student loans?
It gets better.
Nobody likes paying off debt and quite frankly you don’t feel much better owing $130,000 than you did owing $140,000. It’s hard to motivate yourself when you’re paying off what feels like an insurmountable mountain.
However, slowly but surely it does get better. Crossing -$100,000 is a pretty big deal. Getting down to 1-2 loans is a big deal. You just have to keep at it.
I think this means you need to be flexible with yourself when it comes to student loan repayment. Some months will be better than others and that’s okay. It’s a marathon, not a sprint, so focus on taking care of yourself so that you can make the long journey.
If you could do it all over again, would you? Why or why not?
I am not sure. It worked out well for me, but it’s such a gamble (one that I didn’t understand in 2006 when I started law school).
I enjoy my practice and am glad that I do what I do, but I’m also aware that many of my peers that graduated in 2009 didn’t have it so lucky.
Are you actually utilizing your degree? If not, why not?
Yes, I’m a practicing private equity M&A lawyer in NYC at a Biglaw firm, so as I mentioned previously – I’m one of the lucky ones (or, perhaps, unlucky depending on how you see it)!
Anything you’d like to plug/share with LDMW readers?
If you’re a lawyer, stop by my site The Biglaw Investor. You might pick up a few good ideas (or at least keep yourself from making a few mistakes).
Thank you, Josh! I appreciate you being a part of Student Loan Conqueror Series. I’m excited to have featured someone who has already reached debt freedom (I’ll see you there someday)!