<p>Assuming this is a single person with no kids, I doubt it. They’re also not eligible for the student loan interest deduction if they make over $75K. I’d be surprised if their take-home pay was over $60K, though it depends where they live.</p>
<p>Income taxes, payroll taxes, state income taxes… they add up quick.</p>
<p>The point remains that rhetoric like “poverty line” is absurd and stupid.</p>
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<p>Is the threshold 75k? My memory is slipping.</p>
<p>Back to the OP’s question. </p>
<p>I think the answer depends on where you want to go to law school and where you want to work. Great Lakes/Midwest covers a lot of territory. </p>
<p>If you are aiming for a fairly competitive legal market like Minneapolis or Chicago, go for the higher ranked LS, IMO. If you are willing to live in the same city where the law school is located and it’s one that’s not a city where lots of folks want to move, then it may be wise to take the money. </p>
<p>I’d be checking out where recent grads ended up and how many did/did not get jobs before making the decision.</p>
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<p>for young professionals, having pay increase substantially is in fact the norm. for example, engineers can usually expect to double their salary or more between graduation and age 30. </p>
<p>furthermore, folks in their 20’s usually are not looking to buy a home or anything like that. instead, they are looking for a nice/trendy apartment, money for clothes, and money for going out/hanging out with friends. that is all extremely possible taking home 60k, or 5k/month.</p>
<p>sample budget for boston:</p>
<p>1k/month savings (20% is recommended)
2k/month REALLY nice 1BR apartment in the city
200/month groceries
400/month “going out money”
400/month clothing/shopping money</p>
<p>that leaves another 1k for either aggressive saving or anything else you want. </p>
<p>sure, maybe if you are looking at a wife + 2 kids 90k is not THAT much (still doable though), but for a yuppie it is more than plenty.</p>
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<p>I was wrong; it’s actually just $70K. And the maximum deduction is only $2500, anyway. [Tax</a> Topics - Topic 456 Student Loan Interest Deduction](<a href=“http://www.irs.gov/taxtopics/tc456.html]Tax”>http://www.irs.gov/taxtopics/tc456.html)</p>
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<p>That may be true generally, but not necessarily for lawyers. The large majority of biglaw associates who don’t make partner or counsel usually take a pay cut when they leave their firm. I doubt in-house legal departments (which virtually never hire straight out of law school, anyway) are going to offer substantial pay increases from year to year.</p>
<p>Something else I meant to mention is that you should carefully review the terms of these scholarship offers. They may require you to maintain a fairly high GPA to maintain funding. My friend at St. Johns said that they regularly redistribute money each year based on class rank; I’m sure other schools do the same.</p>
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<p>I guess I’m very far ahead of the curve then. That rent on a trendy apartment at the end of the day is just money down the drain. I’m not paying someone else’s mortgage. My goal is to get someone else to pay my mortgages, not pay someone else’s mortgage in perpetuity. </p>
<p>And how long do you think it’s going to take for this hypothetical lawyer to come up with $150k (20% on $750k for a decent apartment/house/whatever) when he eventually decides he wants to buy something of his own? That $90k better beat inflation. Not to mention in Los Angeles that $1k leftover will be eaten up by the costs for a car. And there has never been a single month that I spent less than $400 on groceries. The days of spending $200/month on groceries are over. Try like $500.</p>
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<p>If you take the standard deduction, yes. If you choose to itemize, you’re subject to a floor and phaseout provisions depending on your taxable income. Not to mention, there is the exemption for being human. There’s also, as of this year–and something I hope and believe will be extended–a deduction for tuition expenses. You could probably get away with that deduction for the year you start your job.</p>
<p>I mean, there are so many ways to chisel down at that AGI to arrive at a significantly lower taxable income. Not to mention, I believe, state and local taxes are also deductible above the line (so, not subject to the limitation of the standard deduction if you choose to take it). I also think that the student loan interest deduction is above the line, but I cannot be certain. </p>
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<p>You should probably focus, first, on getting a girlfriend…</p>
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<p>A whole lot of people who thought they were “far ahead of the curve” and rushed into homeownership are underwater now.</p>
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<p>Because if you buy someplace for less than $750K, you’ll be living in a tenement with your $90K starvation wage.</p>
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<p>I don’t see where you’re getting that from. According to this: [Publication</a> 970 (2009), Tax Benefits for Education](<a href=“http://www.irs.gov/publications/p970/ch05.html]Publication”>http://www.irs.gov/publications/p970/ch05.html), the maximum is $2500, and even that gets phased out between $60K and $75K (which apparently is the new limit after all).</p>
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<p>Oh, I misread. I thought you meant there was an overall limit on the amount of a deduction you can take, not a limit on the amount you can deduct for student-loan interest.</p>
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<p>This too. But I also wouldn’t dare get involved with property until I know I’m having a family. Maybe I’m the only one with this notion? I can’t imagine owning a place as a single person.</p>
<p>i agree with you. owning property ties you down substantially to not only a city but even an exact neighborhood. you also lose the chance to pursue a graduate degree (well not so applicable to jd students/grads) and lose the opportunity to relocate for jobs. </p>
<p>there are benefits to owning a home, i just don’t think the pros outweigh the cons for those in the pre-married w/ babies state.</p>
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Your patting yourself on the back for your naivete is getting tiresome. There are substantial costs associated with homeownership, such that purchasing it too early is a major economic foolishness. Paying realtor’s fees and a down payment is usually better spent on a different investment early – such as paying back student loans.</p>
<p>I expect to have zero loans (withdrawal from Bank of Mom and Dad), so yeah I guess I am ahead of the curve. And being a risk-averse investor, I’m not buying into any investment that isn’t immediately net cash-flow positive or neutral and nearly zero risk. So it’s either a CD or real estate and excludes everything else. And you can only put so much money in CDs before you lose FDIC coverage ($250k now, used to be $100k-dunno did it go down to $100k?). </p>
<p>Besides, people who are underwater on their mortgages are fine as long as they keep making payments. They were rushed into ownership when they didn’t have the 20% down and that’s why they got ****ed. I suspect if bankers have any brain whatsoever they’ll start demanding 20% down and this bubble won’t repeat itself.</p>
<p>Besides, I can’t imagine buying a house with someone else. If I buy on my own, I just have to like it. If I buy with a gf, I suspect we’ll be fighting a lot. Besides, if I can pay the same $2k (or even a bit more) and pay myself instead of someone else, why not?</p>
<p>Say what you will but all of that extra money has to go somewhere.</p>
<p>Besides, I’ll get a girlfriend when I get a girlfriend. Finding someone to live with for the rest of your life is REALLY something you shouldn’t rush. I don’t believe in rushing into relationships. Divorce can leave you bitter and financially bankrupt. Why take that chance?</p>
<p>If I’m 40 and single, so be it, it wasn’t meant to be. Just means I have yet to find the right person.</p>
<p>I’m not stupid. It’s not like I’m going to go into a bidding war with 30 different buyers to get a house.</p>
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<p>So houses and CDs are equally risky? Rather than simply open a CD at more than one bank, it makes more sense to buy a house, whose value can never possibly decline?</p>
<p>Also despite the fact that they are obviously not equally risky, CD’s right now are basically useless. Long term CD averages are around 3-4 percent and short term being around 1-1.5 percent. You’d be much better off playing mutual funds and diversifying through stocks then doing CD’s or home ownership right now. On average about 90-95% of stocks go up after 10 years and on average those stocks that go up go up around 9%. Just don’t buy healthcare stocks.</p>
<p>this cracks me up. </p>
<p>futurenyustudent, maybe consider that if 3+ people are saying a singing a totally different tune, that you aren’t 100% correct.</p>
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<p>Yeah, I had a hunch that you’re single (I wonder how I got that…). I’d focus on beginning the hunt now. It isn’t rushing, in your case. For people like you, you’ll need a head-start.</p>
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<p>On this I’ll let nature take its course. gfs are expensive. And very few girls come with no emotional baggage. Before I make that investment, I need to know that it’s worth it.</p>
<p>gotelf, nobody agreed with Galileo either. I frankly don’t care. What one should do with their finances should be individualized to that person’s particular needs and wants. If ROI is solely what I’m after, then fine, I’m not 100% right. But I want to own a house, don’t give a fig about ROI, and want the tax benefits. For someone in the middle class, owning real estate seems like the right choice in that case. Outside of a hugely overheated market that nobody should get into, I will do that once I have money for the 20% down. </p>
<p>As for stocks, blue chips are blue chips until they’re not blue chips anymore. Lehman was a blue chip. Bear was a blue chip. Merrill was a blue chip. So was AIG. Citi was the bluest of blue chips. Look where they are (either bankrupt or reduced to penny stocks). Stock investors should be prepared to lose every cent they invest into stocks. I’m not prepared to do that. I lost $70 investing in stocks already, I’m not putting a cent into stocks again. Fool me once, shame on you. Fool me twice, shame on me.</p>
<p>Given closing costs and whatnot, you really need to hold onto real estate for at least 5-10 years to make any money whatsoever. if you do sell after that time period, you basically spent all your money on interest rather than equity and are just breaking even.</p>
<p>so one risk you are taking is that you will want to and can live in the same location for the next 10 years. this is pretty uncertain for a 23 year old. what if you find a girlfriend who loves some other city? what if your job offers you an exciting opportunity in seattle?</p>
<p>given the past few years, you can see there is also a risk in the leverage you are taking out with a mortgage. the value of a house is not guaranteed to go up (just like the stock market) and you could find yourself underwater.</p>
<p>finally, if you are aiming for buying a “decent” 750k house, you will really need to make 250k per year reliably to afford the mortgage. in general, salary should be 1/3 of the house price to make it affordable. there are literally zero jobs where you can safely make 250k in your 20’s. banking can easily turn to **** and you can’t guarantee that you will be able to stay at a law firm, as many are shown the door after 3-4 years. doctor could be an option but the types that make 250k+ don’t graduate until they are over 30. so there is another risk that you will not be able to comfortably afford your mortgage.</p>
<p>if you KNOW you want to stay in a given city, then buying a studio for 150k or something like that can certainly be a good idea. even once you move into a better place, you can keep it as an investment. i think there are still plenty of negatives but at least it is rather safe as long as you are making 70k+.</p>