I remember when I first went to law school, the salaries of first-year lawyers were $125,000 a year at all of the major law firms. If you were enrolled at one of the T-14 law schools, as they were known, you were virtually guaranteed to get one of these jobs at graduation (or at least that was true back in 2006). To someone who had been accustomed to living well on 1/10th of that as an English teacher in Barcelona, this seemed an impossibly large salary. One of my best friends in law school was from New York, though, and had many friends who had already been through law school, and were working those jobs. He told me that some of his friends struggled to live on that salary.
This was incomprehensible to me! How could a person make that much money struggle to live on that income? That’s insanity!
My friend gave me an explanation of why this happens, and why it’s so common, that has stuck with me to this day. He said, “You may think that $125,000 is a lot of money now, but everyone at the law firm makes at least that. Second-year lawyers make $135,000; third-year lawyers make $145,000. All the partners make millions a year. Right now, $125,000 is a lot of money to you. But when you get to the law firm, all it makes you is the poorest person in your new social circle.”
I did go to one of those law firms. And I worked there for nearly six years. I stayed as long as I could while doing the least work I possibly could have done to keep my job. When I left the firm after six years, they were in the process of firing me.
I am what economists call a “threshold earner.” I don’t need $1,000,000 or even $250,000 a year. Would it be nice to have? Sure. But I don’t value every marginal dollar above $75,000 a year as much I value the time it takes to earn it. And so I earn less money than I could if I valued money more. My hourly rate is now a fraction of what it used to be. My house is smaller than many of my peers. I still drive a 1997 Toyota Corolla.
But time, oh sweet time! Oh great, fickle non-renewable resource of the Gods, how I treasure thee so! In the last four years since I left the old firm I’ve run 100-mile races and traveled to Central America five times and I’ve read every book I ever wanted to read. I taught myself to program (badly) in python and I’ve created a blog that I hope some day, some one will read (not much doing yet).
And it was all possible because of time, and time in abundance. Which, at the margins, is so much more important than money.
All around the globe there are beautiful, near-empty beaches where you can watch the sunset or go surfing in complete peace and tranquility. But if they’re beautiful and nearly empty, they’re almost certainly far away from major airports and traffic hubs. You need time to get there. But instead, most of us pay hefty sums to travel to crowded beaches and fight stress and crowds along the way.
Every day, great novels don’t get written, genius is wasted, and families are torn asunder, because we mistakenly believe that a few extra dollars can get us what we need and want. But most Americans already have most of the material items they need, along with a whole bunch that they don’t. What most Americans don’t value enough is time.
Frank McCourt told us that, “After a full belly all is poetry.” But most of us with full bellies still spend most of our time obsessing over having a fuller belly. Or, perhaps more accurately, ensuring that we will have a full belly until the day we die. But true security is impossible. Any one of us may die today or tomorrow. And no matter how full our bellies are, and no matter how much we’ve prepared for tomorrow, we will still be dead.
So work hard. Make sure you, too, have a full belly. Maybe even help someone else fill their belly, too. But after that, remember that life is about the poetry or whatever art or music moves you.
And that, is why being a threshold earner, is very much underrated.