September 17, 2007

Big Law Defectors Enjoy The "New" Lawyer's Life

I'm a broken record when I say, "You don't need to be an exhausted hamster in a cage at Big Law in order to enjoy a quality professional life.  And, once again, thanks to James Perrin of Atlanta, Georgia, who says, "I'm always looking for great articles for you," we get this terrific testimonial to jumping ship in from the Atlanta Journal-Constitution called "Laid Back Law Firm - BILLABLE HOURS AREN'T EVERYTHING"

These Big Law Defectors graduated from the likes of Harvard and Duke and decided they couldn't take 'Sunday stomach' anymore, that sickening feeling of the sun rising on another Monday, time to get back in the cage and bill hours for The Man.

Weekends, when they weren't working, were a brief respite from the endless chase of billable hours. But Sunday evening rolled around with a pending dread. "We called it 'Sunday stomach,' " said Kevin Broyles as his friend, James Fisher, laughed in agreement. "It was that feeling of 'Aww, I have to go back to work tomorrow.' "

It was back to the treadmill, back to churning out 2,000-plus billable hours a year and 60-hour workweeks.

Their stomachs are just fine now. In 2002, they left the big firms and started out on their own, eventually building FSB Corporate Counsel, a firm made up of 10 young lawyers who say there's more to life than billing clients. It's a business model one client calls "the wave of the future" as more attorneys leave the prestige firms for more flexibility.

These very talented lawyers, in pursuit of more life balance, take a full 85% of each dollar they earn home, unlike the paltry 33.3% of their billables as associates.  How? Intelligent use of technology, very low overhead...no hungry middleman partner's compensation package to feed.

But, in lawyer parlance, they can "eat more of what they kill" —- they keep a larger percentage of their billable hours, letting them equal or better what they earned as associates. FSB attorneys retain about 85 percent of what they bill, Broyles said. Associates at big firms —- about a third.

They say low overhead lets them do it: No high-paid rookie lawyers, no expensive office artwork, mahogany walls or teams of support staff and no top layer of partners sopping up revenue.

The attorneys practice general commercial law and technology law. They work at clients' offices or at home. They rent out conference rooms and share the costs of technology systems that let them pool their resources and act like independent contractors, working as much, or as little, as they choose.

"Technology allows us to do this —- laptops, voice-over IP, video conferencing," said Broyles. "You couldn't do this 20 years ago."

And they charge considerably less per hour then Big Law.  The one big difference, they go home at 5 - 6 o'clock each night taking on only those cases they want to work on.

Each one originally thought Big Law was the only way to go; partnership the brass ring.  No longer.

Quite often those who have not experienced traditional law firms or those who gave up much and survived the grueling soul-sacrificing hazing to partner will label those who leave for 'work/life balance' issues as slackers, lawyers who couldn't cut it, and feel the sting of all manner of insult to their work ethic or commitment to the practice of law. 

I find the insults and comparisons and the pointlessness of it right up there with the media originated wars between working mothers and stay at home mothers, breast milk or formula, Coke or Pepsi.  It's just plain stupid.

Professional and personal life choices are just those...choices.  It doesn't reflect on talent or commitment.  If you choose to go solo, find those who support your goals, will teach you how to achieve your goals and let your motivations be nobody else's business.  Let your professional life blend in the exact proportion you want with your personal life and, quite frankly, the hell with everyone else. Last time I looked we still had the illusion of freedom and your legal degree gives you even more of an edge if you have the guts to use it.

No one said it is was easy (although it's just not as hard as you think) but more than half a million lawyers are soloists.  What do they know that others don't?

Continue reading "Big Law Defectors Enjoy The "New" Lawyer's Life" »

September 13, 2007

How Much Does Your Commute Really Cost You???

If you calculated the hours you spend commuting, the actual commutation costs, auto maintenance, insurance, parking, gas..the hours you lose doing something else that is profitable or which makes hefty deposits in your other psychological bank accounts like family, pleasure travel, is your BigLaw job or the current way you run your solo practice the cash equivalent of working at McDonalds?

This is the question asked by Tim Ferriss of the '4-Hour Work Week' which discusses the New Rich, those with freedom of time while building their business.  While he espouses many different working philosophies which flies in the face of second wave thinking...read this terrific post called, "How Much Does Your Commute Really Cost You?  Calculate it..then Kill it."

I know I have reaped numerous benefits by making the decision to create a home-based business.  But it was my personal choice as I did serious calculations, weighing, then re-weighing all of the goals I was trying to achieve.  Creating a solo practice from my home from 2000- 2007 was the only satisfying and profitable choice on many levels.  Continuing my coaching/consulting business from home was only natural.

If you sit back and clear out all the noise from the naysayers, those who mean well but muddy your thought processes, shoo away the fears then start blue-skying and designing your perfect work-life balance, well, what do you come up with?  It doesn't have to include a home office.  This choice only works with certain personality types and in certain situations (the desire and discipline of the individual drives this option.)  However, how much time and energy and money do you want to spend commuting to and tethered to a distant environment with fixed overhead costs?   Does this work for you on every level?  What other options exist for you?  These are very important questions that deserve thoughtful answers because when you create your solo practice you have to look past the present and start actively designing your future. 

August 27, 2007

The Economics of Solo/Small Firm Lawyering - A Survey

Reader of Build A Solo Practice, Attorney Emily Finger of Minnesota e-mailed me this very interesting information regarding the economics of solo/small firm lawyering.  Over 300 solo/small firm lawyers participated in the 2007 Solo & Small Firm Economic Survey conducted by Minnesota Lawyers Mutual for the state of Minnesota. (Full 24 page survey here.)

You may say, "I'm in New York (or California or Kansas) so how does this relate to me?  It's fair to respond, " it does" when you read some of the more interesting revelations:

Of the 340 attorneys who responded, they either worked full or part-time but exclusively in private practice. This can have a tremendous impact on the statistics. The majority of respondents, 51.4%, described themselves as a solo practitioner, with another 39.8% indicating they work in a firm of 2 - 5 attorneys.  This means of all respondents, 91.2% are in firms of less than 5 attorneys.  Whether this is indicative only of those who chose to respond or a statistical representation of the division of lawyers in private practice in Minnesota is unknown.  But, regardless, the number is impressive.

Almost half of those who responded practice in what is traditionally known as general practice areas, family, estate planning, probate and real estate (total 42.6%).

With hourly billing between $150-199 per hour solo/small firms who responded are grossing up to $150,000 per year. 28.1% reported under $50,000; 30.3% reported $50,000 - $100,000; 23.3% reported they earned between $100,000 - $150,000.  There is a caveat here, though.  17.8% of lawyers reported working less than 32 hours per week.  (This is interesting because the majority are part-time by choice due to family considerations and/or other business interests.) It would be a reasonable assumption to believe those who considered themselves part time are the majority of the 28.1% earning under $50,000 although this is not necessarily true.

Among the solos who responded, more than half claim their overhead expense goes to paying for non-lawyer personel (28.5%), rent, phone and utilities (28.2%).  Those who had gross sales between $100,000 and $199,000 said their total expenditures, excluding wages and salaries was $25,000.  It makes a strong argument for outsourcing to either technology or per diem remote or virtual assistance in order to earn more money working smarter rather than harder.

I find this study enlightening because it shows gross sales with an hourly billing range.  If you are in a state which commands higher hourly billing rates your gross sales will be higher.  If you bill a significant number of hours per week your gross sales will be higher.  If you are solo and high tech, commanding higher hourly rates and/or value billing and can reduce your non-lawyer wages, technology knowing no demographic or very little variation state-to-state, your income will be significantly higher without working harder, just smarter.

As with any study there is margin for error but it does cast an interesting light on the earnings of the solo/small firm lawyer, something you can also read about here.  If you wish to see a copy of the summary in PDF, please send me an e-mail. ( I was unable to provide a link to the summary PDF on this post.)

Also, on Thursday we will be featuring Attoroney Emily Finger on "Going Solo; Confessions and Inspirations." 

August 15, 2007

A Very Sobering Article(s) on Life At Big Law

Stephanie West Allen of Idealawg brings us excerpts of a newly published article (and numerous links of valuable commentary) by Alec Scott called Exile on Bay Street which documents one attorney's experience at Big Law in Canada and beyond.  It is truly worth reading. 

But I would like to preface the introduction to the article with the following.

This blog, Build A Solo Practice, is all about going solo for those who truly want to go solo or believe they have no other options.  It is a full road map for the solo option and information to help you determine if going solo is the best or only option for you.

There are countless numbers of law students who expressly desire the experience of BigLaw and do remarkably well, profit from it in bankable and psychological ways the truly solo-minded would not.  The truly solo-minded would feel caged in BigLaw and not appreciate their environment.  Conversely, someone who goes solo when they really want BigLaw will always feel isolated and third rate.  The proverbial square peg in a round hole.  We never appreciate what we have if what we really yearn for is something else.

It is this blog's passionate purpose to bust the myth that getting a legal job in Big Law or Small immediately upon gradaution from law school is a mandatory right of passage in order to practice law. It emphatically is not!

This blog is about having options.  I rant against law schools not publicizing and supporting other options and the professional landscape is littered with the overly-educated bodies of those who never believed the solo option was really viable.  Life is about finding those true choices.  And true choices come from honest information.  This is the goal for this blog, to provide a realistic perspective of the solo option from myself, all the guest bloggers and great commenters, the valuable tools and how to use those tools to make the most of your choice, and responsible economic and demographic trends to help shape your personal and business future as an entrepreneur in the legal profession.  I hope I am achieving my goal for you.

August 07, 2007

When In Doubt About Going Solo, Look For Life's Little Affirmations You Are Making the Right Decision.

This post is a little more intimate because I am going to share a personal story. But then, again, going solo, being an entrepreneur is a very personal and intimate decision.

Every entrepreneur has days when they question why they went into business for themselves as well as their transition from employee to self-employed, self-employed in one business to another business.  (And I've been in business for myself for 13 years.) They think, "I can't believe I've done this (or am doing it)?  What was I thinking?"   And they enter a period of self-questioning which if left unchecked can unravel the whole ball of yarn, especially in the early years.

The reality is if you remove all emotion from the process of opening up your own solo practice and become robotic in the experience, it isn't technically hard.  What distorts the process, helps you take three steps forward and then two steps back is the emotions which get amplified, the fear, the anxiety, the famous "what ifs? and the naysayers ready to say "you're crazy" or "I told you so" when you confide a temporary down moment."  They project their fears upon you.

Well, I'm not immune from these moments. After thirteen years of practicing law on my own terms the doors to the Law Offices of Susan G. Cartier (Liebel) are closing.  It was a very profitable and exciting chapter but it is completed. My consulting work teaching new attorneys and big law defectors how to open their own solo practice (hang a shingle) is now taking its rightful place full time along with teaching as an adjunct professor at Quinnipiac University School of Law about, that's right, how to open your solo legal practice right out of law school and writing; all this from my newly renovated home office. 

So where is the emotional distortion, you ask?  During the last four year transition (winding down my solo legal practice from home so I could be home with my son) my income will temporarily drop from four to three sources until my rapidly growing consulting business expands to fill the void.  It is really just a blip on the economic screen. Emotions removed, it's a no-brainer.  This is exactly what I love doing. I do it well and I'm right on track to meet my personal and professional goals which include permanently establishing a home office for my coaching/consultancy and being home for my son.  More and more days I enter what I call the 'serenity zone' and I know I'm doing the right thing. This is my personal definition of success. What is yours?  It's important to define it.

However, recently, after staying up very late working (some of my blogger friends laugh when they get e-mails from me at 2 and 3 a.m.) I was awakened by my little guy, who is always happy, saying, "Mommy, you need to make me funky pancakes. It's Sunday."  (He's 3 1/2.)  My eyes were glued shut and as I stumbled out of bed I knew I was going to have one of those 'non-serenity' days....the days where I get anxious about the professional decisions I've made, our financial future, etc.....the days my husband wants to run for the hills but listens patiently as I detail for the hundreth time why maybe I should keep my solo legal practice and consult full time and teach and write my column, blah, blah, blah, blah, blah. 

So, on this beautiful Sunday while we were outside, my son happily splashing in just his underpants through the sprinkler, my husband and I weeding our garden I said, "maybe (our son) should have been in all day daycare so our income could have been even more these past three years so we could have done ABC (waste of money) and then have DEF (keeping up with the Jones') and save for XYZ (something extemely frivolous).  I just don't know if I (we) made the right decision?  (Picture hands in the air, one filled with pathetic little weeds, voice going up an octave in question, sunglasses sliding down my sweaty nose.) Just at that moment my son comes up giggling, asks me to bend down, puts his wet little hands on my cheeks, kisses me on the lips, says, 'I love you, Mommy" and then places his slippery little hand into my weedless one.  One of life's sweetest affirmations I made the right decision. (At least it was this for me because it reminded me of my personal definition of success, my personal mission statement, my own priorities.)

Even if you know you want to go solo, you will have doubts about your decision, of this I'm sure.  When it comes to your income, you are only as good as the next retainer agremeent, this is indisputable. Look for life's little affirmations you are making the right decision.  Give them more credence then the niggling (or shouting) doubts.  Then trust yourself through these periods.  You'll come through to the other side just fine.

July 30, 2007

"You Ask...I Answer" - I"m a Solo Growing By Leaps and Bounds. Should I Hire an Associate?

There will come a point in your solo career when you will feel the pinch of too much work and not enough hours in the day.  You begin thinking, "I can't service my clients properly, this is impacting my profitability, and I don't want to turn away business."  In my experience this happens anywhere between the three to six year benchmark, the time most solos are comfortable with their flow of business, their reputation has grown, they've networked well and referrals keep coming in. (Yes, Virginia, there is a Santa Claus!)  And this is when the million dollar question gets asked, "Should I hire an associate." 

The following question is a composite of several questions, the answers come from myself, two respected fellow entrepreneurs, Carolyn Elefant of My Shingle and Lisa Solomon of Question of Law . and a 38 year verteran lawyer, Dick Howland who offers his valuable insights.

Question:

I have been a solo practitioner since 2003. This year I have experienced a tremendous surge in referrals as well as an increase in my 'ideal clients.,  As a result I am consistently
inundated with more work than I find myself able to handle while still maintaining the level of excellent service I am known to provide. 

The hallmark of my success turns on quick turn-around times and rapid response to my clients' needs.

I know this is defined as a good problem to have. It appears I may need to obtain the services of another lawyer to assist me. I need someone who can cover routine motion hearings and can do high-caliber legal and research writing.

Should I hire an associate? The conventional wisdom from my peers is 'yes,'
that I would profit off of an associate, I would not be chained to my office and
my overall well-being would improve.

Will  I really be able to afford to pay an associate, can I really count on an associate to increase my firm's profits or will it be a net drain on profits?, what about providing benefits like health care, unemployment, worker's compensation and the like?

First Answer:  Lisa Solomon, Esq.

"There are many lawyers who work as independent contractors.  There are many benefits to this kind of relationship.

One benefit is cost. Hiring an associate requires a significant investment in both time and money. When you outsource to a contract lawyer, you pay only for the time it takes to complete the project, but when you hire an employee, you immediately add to your fixed expenses. Searching for and training a new associate (particularly a junior-level associate) is time-consuming. Your practice may be busy enough to benefit from project-based outsourcing, but not busy enough to support another employee. 

Hiring an associate has other downsides that can be avoided by retaining one or more contract lawyers. An employee adds to your administrative burdens, especially if you are a sole practitioner. Your malpractice rates will rise, and you will be subject to all the financial and legal responsibilities that accompany "employer" status. Retaining an independent contractor is much less complicated, both initially and on an ongoing basis.

In fact, outsourcing to other lawyers can help your firm's bottom line. With one exception, all of the bar associations that have addressed the issue - including, most notably, the ABA - have determined that an attorney may charge the client a premium or reasonable measure of profit in excess of the contract lawyer's cost to the attorney, as long as the total charges to the client are reasonable. (The sole exception is the Maryland Bar Association, which did not give any reason or cite any rule in support of its position). Regardless of whether or not you choose to charge your client more than you pay for the services of a contract lawyer, outsourcing is still cost-effective for your client, since even a rate that includes a reasonable profit to you will generally be lower than your own hourly rate.

You could hire a local lawyer to handle routine motion hearings, and a legal research and writing specialist to handle those tasks (the research and writing specialist can be located anywhere in the country). Many lawyers on this list do contract work.

I'll be speaking on this subject, on a panel moderated by Carolyn Elefant, at the ABA 2nd Annual Solo & Small Firm Conference, on October 6 held in Philadelphia."

Lisa
Lisa Solomon, Esq.
Concentrating exclusively in legal research and writing, including appeals
Located in New York | Serving attorneys in all jurisdictions
Read Lisa's Article, "Taking an Appeal," at www.QuestionOfLaw.net
e-mail: Lisa@QuestionOfLaw.net | phone: 914-674-8573 | fax: 815-346-3468

Second Answer:  Carolyn Elefant, Esq.

As Lisa has already commented, you can find highly qualified 
attorneys to use on an independent contract basis.  In addition to 
all of the benefits that Lisa listed, you can also use independent 
contractors to assess your need for a full time employee.  If you 
hire an IC lawyer and it turns out that you're still understaffed and 
scrambling, at the time, you could ramp up.

If you are looking for someone local, one tremendous source of talent that you can tap are female attorneys who've left the practice of law and want to return.   
At a contract panel that I hosted here in DC, I met at least 20 
female attorneys who'd left jobs at BigLaw to stay home with kids and 
now that their kids were older, were looking to find some part time 
work or a way back into the law.  These women are incredibly smart, 
will have the kind of experience with complex issues that you need 
and are very motivated.  So you might try that as a potential source 
of steady work - perhaps two attorneys on a part time basis.

Third Answer:  Dick Howland, Esq.

Over some 38 years in practice I hired over a dozen associates, all of whom
(save two) I was very fortunate.  This is reminder that colleagues are more than mere employees.  They have their own careers and aspirations.

You need to do your home work if you accept an associate much more, a partner.
An associate should never be viewed as a revenue source for about three
years.  The cost of supplying, teaching, coaching, correcting, reviewing,
the individual takes considerable time.  I have always felt that hiring a
young lawyer needed special handling.

Today's young men and women hunger for praise and recognition as much as
income.  Many will not think they are paid what they are worth if below Wall
Street salaries and benefits.  Many will not know much, if anything, about
practicing law day by day without frequent recourse to Constitutional
issues.  If law school is their only legal experience they need more
attention and guidance. 

One other point, numerous restaurants in my area have enjoyed lines out the
door, back up and superb reviews.  They doubled their dining area and
offerings.  Most closed within a year or two.  Having too much business is a
pleasure indeed and rewarding.  If I were doing it again, I would prefer to
do my job for my clients and new clients I could not assist reasonably for
any form of space/time problems, I would refer.  When you add another lawyer
in any fashion it is your practice and what the new lawyer does is your
reputation one way or the other. 

As in your practice, only you can judge which make sense in your practice and life.  Don't forget the quality of life component -- schedule it.

Fourth Answer: Susan Cartier Liebel, Esq.

You are in an interesting place in your growth.  The most important
question was eluded to in a previous reply.  "Do you want to grow beyond
your current position of one attorney/one paralegal?"  This isn't a trick
question.  You are apparently very good at what you do and whether your
business is growing through word of mouth or a strong marketing effort or
both you have to figure out what you want to be 'when you grow up? :^)
Is all this new business 'equal' in terms of revenue and personal reward?
Are these all your 'ideal' clients, the ones you have actively sought
out?  If you sifted through the business you are getting does it match
your overall short and long term goals for your professional (and
personal) life?
If the answer is no, you need to establish a referral relationships (if allowed in your jurisdiction) with other comparable attorneys and keep the cream.  If you
have not achieved your financial or personal goals for your practice and
envisioned more attorneys working in your firm with you to elevate you to
where you want to be both professionally and personally, then you need to
consider all the discussion previously about expansion...slowly with
contracted work to determine the needs you really have and limiting your overhead
costs PLUS learning your capability to supervise contract lawyers.
If you then decide to go the associate route are you ready to supervise and
mentor/massage new associates and willing to financially support these
individuals with the hope of creating an environment they want to continue
in so you get some longevity from your investment?
These are all critical decisions and you've gotten some great input
from those who responded before me.
But you have to decide first, how big (or small) you want to be, why, and
if you are truly capable of handling growing your legal practice beyond 'solo'and all this entails.
If you have suffered growing pains or can offer advice on this common predicament, please contribute to the discussion.

July 28, 2007

Is Your Life Well-Lived? Do You 'Hum' When You Go to Work?

If you were to die tomorrow, would you be happy with your life as lived? And what has this question got to do with going solo? Everything.

There is a new blog out there called Pursue the Passion, four young men touring the country interviewing people who are passionate about their jobs.  Their mission:  to learn what makes people 'hum' when they go to work, working occupying a disproportionate amount of our lives.  Do we toil for another or for ourselves?  Do we toil in service for the greater good or someone else's bottom line?  Do we have time to enjoy all the pleasures in our lives, is it balanced?  Do we have our priorities straight? Do we have more or less days where we sit back with a sense of serenity about the choices we've made in life?

Well, on a recent interview early on in their tour Brett Farmiloe interviewed Jim Cox, a helicopter news cameraman in Phoenix, Arizona.  Brett got his first helicopter ride over the city and met a professional who loved going to work every day.  It was a great interview. 

Jim Cox, a passionate cameraman, talked about how he one day dreamt of getting in the pilot seat and reporting. He was described to me by Bruce as one of the best photographers in America because of his unrelenting drive to get the shot that told the story to the viewer.

Rick Krolak was riding his bike around, like every morning, when he found me aimlessly walking down the runway in search of my helicopter ride. He happily guided me over to the place where I was supposed to be at, and merrily went on his way.

Today Jim Cox, Rick Krolak and two other dedicated professionals died in a spectacular helicopter crash over Phoenix...doing what they loved.  (Video)

It gave me pause.  Does it give you pause when you reflect on the direction of your personal and professional life?  Do you 'hum' when you go to work? If you were to die tomorrow would you be happy with your professional life and is it personally well-lived?

July 10, 2007

When Big Law Lawyers Leave Standard "Success" to Create Personal Success

Just loved this story about how this Big Law lawyer, Jim Karger, dumped the usual trappings of success, chucked it all to follow his own heart...as a solo in Mexico.

“I had the giant house and the fancy cars . . . stuff that had been defined to me as evidence of success,” he says. But he also grew hostile at corporate America for creating the problems he was helping to diffuse, he says, and says he grew tired of solving problems that would later be repeated.

dogSo in 2001 Karger stopped practicing law, sold everything and moved to San Miguel de Allende, Mexico. In 2003, after seeing that there were “thousands” of homeless dogs in the region, he and Kelly started “Save A Mexican Mutt,” an animal rescue group that takes dogs such as Goku, a male terrier (pictured, left), out of pounds and off the streets; rehabilitates, spays and neuters them; and finds them homes in the U.S.

Karger, 55 years old and a father of three (and owner of eight dogs), spends half his time working for SAMM, which he funds, and much of rest as a management consultant. He also does a little labor law on the side, but only for clients who let him do it his way by addressing the fundamental problems that led to employee discontent. It’s “not the standard Sherman’s March to the sea,” he says, but a chance to “leave the place better than I found it.”

I know there are more of you out there.  We just don't hear about you.  Tell us.  We want to hear your story.

June 26, 2007

Yet Another Reason to Go Solo....You Can't Afford Not To!

(UPDATE:  6/28 An interesting acticle to add to the discussion.)

"Boomers Expect To Work Longer; Can't Afford To Quit" so says this recent article from USA Today.

Well, it is the reality. People are generally living longer, healthier lives and they need to finance that longevity as traditional benefits such as social security and pensions are no longer the bellweathers they once were.  At the same time, most don't want to stay in the daily grind dealing with the hectic pace of a traditional nine to five job with managers younger than their children, and children who are (unfortunately)ready to set them adrift on the ice flow because they have their own families to feed.

In the legal world it may also explain the increase in older students entering law school as second and third careers, careers they now have real control over in terms of length and enjoyment of work life.  It is also what makes the solo option even more attractive to these older students.

In the category of "Passed the Bar - Hung a Shingle" there are several 40+ new lawyers who have made this choice; Ann McDonoughSusan BeecherGregory Napier.  I have clients over 40 who have just graduated law school.  They have transitioned from other careers, raised their families, and now are embarking on the next chapter of their lives....and this 'legal career' chapter has no ending written.  That is the beauty of going solo. You are the author.

Boomers are healthier and wealthier and wanting to be productive into their sixties, seventies and eighties. A legal career combined with self-employment is a challenging and fulfilling option because only you decide when you are 'too old to keep doing this anymore."  And it may very well be never because the media is full of stories of practitioners in their 80's and 90's who are beloved by their clients and their communities.  And leading a productive, fulfilling life combined with friends, family and good health is, in my opinion, the real fountain of youth!

June 22, 2007

Going Solo Brings 'Real Riches'

Thanks to Victoria Pynchon at SettleItNow as she points us to a great article on the 'value' of health, relationships, friendships, and family....something we sell down the river for actual greenbacks.  In this article it translates psychological and physiological riches into actual dollar amounts so we can theoretically see the value of all the choices we make and our real annual 'income' from these choices:

Money really can buy happiness, but good health and social interaction provide an even more dramatic boost, concludes a University of London study that creates financial equivalents for life's pains and pleasures.

....an improvement in health from "very poor" to "excellent" provides as much happiness as an extra $631,000 a year. By contrast, a decline in health from "excellent" to "poor" has a psychic cost of $480,000 in financial losses.

Increasing face time with friends and relatives from "once or twice a month" to "on most days" feels like getting a $179,000 raise, while talking to neighbours more often is worth the equivalent of about $79,000 extra per year.

Using an economic regression analysis known as shadow pricing, Powdthavee determined exactly how much extra money per year a person would need to earn to move from one point to another on the scale.

For instance, an individual who sees friends or relatives less than once a month to never would require an additional $133,000 annually to be just as satisfied as someone who sees friends or relatives on most days.

This is a very interesting read and drives home an important point...yes, money can buy happiness, but are we going to work that hard professionally to achieve that happiness in real dollars only or can we achieve that happiness with a combination of all three, emotional, health and financial?

Going solo certainly gives you a better chance of satisfactorily making deposits in the emotional and health accounts because you control your time more then when you work for another.  If taking the time away from work to improve my health (hypothetically, as I am fortunately in great health) will actually increase my income the equivalent of $631,000 dollars, I will certainly do this before I will spend time and energy never achieving an additional $631,000 in actual spendable dollars, wouldn't you?

While there will be those who feel this type of equation is a little farfetched, is it really?  When have you felt the happiest with your life?  And how much was that moment in time, however long, worth to you? I'd venture to say priceless.