Looking Ahead 18 Months

Graduating high school felt like both scary and exhilarating at the same time. Finally I left behind the rules and order of forced schooling but with great freedom came great responsibility. Where would I go to college? How would I answer the question on everyone’s lips: “What will you major in?”

And of course no sooner did you answer that question would you receive the follow up – “And what job are you going to get with that degree?”

It would have been daunting to make all of these decisions in the summer after my senior year.

Luckily for me (and most of you), most of the work setting up the future, like picking an appropriate college, had already been decided during my junior year. Like most high school kids, I spent the previous 18 months looking at various schools, applying for scholarships and financial aid and ultimately selecting a place to go to school.

In fact, from my junior year of high school onward I had a series of experiences and transitions that involved this 18-month advance look at the future.

In college, with another graduation looming in about 12-18 months, I started to think about the next step in life which led to practicing for the LSAT and looking at law schools.

I opted instead to move to Boston and spent two years working for a small law firm while I decided whether and where I wanted to attend law school.

But within about 12-18 months of moving to Boston, I began the pattern again and started applying for law schools, which would not coincidentally start in about 12-18 months.

The pattern repeated itself in law school.

Everyone is told that your 1L year is the most important year. From day one you’re focused on your grades and how they will impact your ability to find a job during the fall of your 2L year, which is about 12-18 months away.

Then you have your 2L summer which leads (you hope) to a permanent placement once you graduate law school, which is in another 12-18 months.

And then, assuming everything goes to plan, you start working.

The end of the 18-month cycle

Once we start working, there’s a perception that life now becomes an unimaginable stretch of time. No longer do we have the 18 month cycles to guide us forward. There’s no transition on the horizon.

It’s easy to lose sight of goals and planning once these 18-month cycles disappear. Without a transition point in the future, what exactly are you planning for anyway? Saving money for some future date in 30-40 years seems unpalatable. Paying off your loans is years away too.

Yet, those 18-month cycles propelled you forward from high school to law school to a career. If you abandon them, what becomes the driving force?

Rather than moving on to being an “adult”, I suggest that we should be embracing the 18-month cycle for planning and motivational purposes.

Twelve to 18 months is a perfect timeframe that seems reasonably close but is far enough away to allow you to accomplish quite a lot. Better yet, you’re already trained to respect this cycle. You’ve been living it for the last 10 years!

What do your next 18 months look like?

This article is set to publish in June, which means than in 18 months we’ll be at the end of 2018. It seems both far and near. If you’ve been working for any length of time, you’ll also recognize that it’s inevitable. Time marches forward.

If you were standing on your tiptoes peering out over the future of your financial life, where would you be in 18 months?

Would you have a higher paying job? Would you have saved up $36,000 in a 401(k) by maxing out your 2017 and 2018 contributions? Would your law school loans be under $100,000 or perhaps paid off entirely? Would you have a down payment saved for your first house? Half of a down payment?

Planning goes a long way. The great thing about looking 18 months out is that you can start adjusting behavior today to achieve those goals.

Bill Gates said, “People overestimate how much can be accomplished in a day but underestimate how much can be accomplished in a year.”

I think about that quote a lot.

Building wealth is obviously a long term goal and not something that can be accomplished in a day. And while you can get started today, it’s the power of hundreds of good days that will get you where you want to go.

Our own plan over the next 18 months is to continue integrating our finances as we get married and to hit our savings targets which we’re tracking each month. We’re already in the middle of shifting our income to take advantage of every retirement account we can. By the end of 2018 we should be a well-oiled machine with all of our excess income continuously building in retirement and taxable accounts.

Joshua Holt is a former private equity M&A lawyer and the creator of Biglaw Investor. Josh couldn’t find a place where lawyers were talking about money, so he created it himself. He spends 10 minutes a month on Empower keeping track of his money and is always negotiating better student loan refinancing bonuses for readers of the site.