Financial Planning for Lawyers with Jeffery Lamont

Hello everybody. Welcome to another episode of Studying Law Around the World. Today I'll have the opportunity to interview Jeff Lamont from Lamont Wealth Strategies. We will be discussing different aspects of financing for lawyers, specifically their personal finances and how they can make the best out of those financial decisions early on in their careers. Jeff has been working in this field for a long time and he has some great tips and ideas for those of us who are interested in this topic. Thank you so much for joining us today, Jeff. Thank you, Claudio, for having me. It's a great opportunity. We're so happy to have you today. And to start off today's podcast, I'd like to ask you a little bit about what inspired you to pursue a career in financial planning. And then also, how did you come to specializing lawyers? Well, uh, kind of one answer will answer both of those. My, uh, I'm actually second generation, Claudio, in the financial services industry. My dad was in it for about 25 years before I joined him. But one of the things that happened is I had originally gone into a university to do a poli sci degree with the idea or the aspiration to go on to law school. And when I got into, I guess maybe it was third year. I went to a recruiting, recruiting seminar for one of the big financial institutions and realized that I, I took an aptitude test and realized that I'd have a pretty good opportunity to do that. Didn't tell my dad because I didn't want him to feel that he had to, you know, that I was going to join him. And I ended up joining him and worked for him. And then as I worked with him, I, we dealt with a couple of the large, large law firms in Toronto. My dad dealt with a few of the named partners on a couple of the firms. But the joke was he didn't actually like dealing with lawyers. And so here I was at 23 and he said, listen, why don't you deal with them? Maybe, maybe you'll have better luck with them. And so here I was, as I said, at 23, dealing with people that were in and around twice my age and older at that point. And it just kind of resonated and I worked well with them and they seemed to appreciate what I was bringing to the table. And here we are 26 years later. And Dealing with many of those same lawyers from my first days. Oh, that's incredible. What a story. So in 26 years of a career, you must have seen all kinds of things already. And if I may ask you, you know, I know, and maybe if I can recommend your listeners to take a look at your LinkedIn, you sometimes will post some, you know, plans and all of that and a little bit of a backstory to some of the people you work with, which I find amazing. But if I may start asking, like, what are some of the biggest financial mistakes you've seen professionals making over, over your career? I think it's one of those things, Claudio, and we talked about this earlier, you and I. I don't think people give themselves enough credit and don't get started early enough. I think that's mistake number one. With my average client being almost 70 years of age, when I talk to them and ask them what they wish they'd done or not done or started sooner, First thing they say, they wish that they'd started sooner. So that'd be the number one mistake that I see. People just think that they're not making enough money. So therefore they don't, you know, they don't need a plan. Well, in actuality, you do. That's when you do need a plan. So getting started early is number one. I'd say number 2, coming out of law school, especially, I find a lot of people, they concentrate too much on debt, focuses too much on their debt. And what ends up happening is that kind of leads to number 3, which, which leaves them vulnerable to Emergency. So I was dealing with somebody the other day who wanted to just pay down debt. That's what he was told. That's what the bank told him. That's what his parents told him. Problem was he's out on his own living in Toronto. And if something happens, he's got no savings to fall back on. So what happens? You'd end up back in debt. So number 3 is having an emergency fund, I think is the third thing, having some savings behind you is the sort of Second/third mistake that people make, too much on debt, not enough on savings. And then I think, you know, again, with those points, it's not starting soon enough. So people say, I'm going to wait until I, you know, until I'm making $100,000, or I'm going to wait until I'm making $200,000. They have this mythical time in their minds. So people don't start early enough. Every little Every bit counts, Claudio. So get started early, as small as it might be, as insignificant as it might seem, start early. And then I think the other thing, you know, again, coming out of law school, especially, and even young lawyers that are in their first few years of practice, is they don't think enough about the risk side of life. You know, what happens if their income stops for whatever reason, whether that be being let go, in which case that emergency fund would help, or If something happens to them from a health perspective, you know, I was 23 and ended up on, you know, being disabled for about 6 months. Never would have thought that at 23 that would happen. So having disability insurance and critical illness insurance, I think, are key things. And then the biggest one, the biggest problem that I see with lawyers is lifestyle creep, especially in Toronto or in the big centers, right? They, you know, we You know what it's like, you're living in the city. It's, it's, it's expensive. And as you start to make money and you start, especially if you're in big law and you start to make some real money, you know, you start looking around and you think you've got to drive the fancy car and have the right suit and the right purse or the right briefcase and the right watch. Lifestyle creep is a major, major issue at every age that I see. So really, I mean, those are the 5 things. It's ignoring the financial planning early, focusing too much on the loans, not saving enough early enough, not protecting their ability to earn. So, you know, lawyers just neglecting that part of it and then lifestyle creep. Wow. Those are really points that, as you say, it's like you can't have any, nothing comes to mind that could contradict those. So it's just incredible how that is, you know, and it's definitely something that You know, we, I often talk to my friends about, you know, different things and we usually talk about how, you know, maybe we'd hope that in high school you'd learn how to, you know, file your taxes and maybe know how to deal with all the different kinds of banking accounts that exist, right? You have all kinds of different saving plans and all of that. So it's just, I feel like it's a big There's a big gap on financial literacy all over the world. And sometimes it's hard to admit it as a lawyer that maybe that happens in your personal life too. So it's incredible that there's professionals like you that help with that. Well, I think you're absolutely right. And I think the problem, Claudio, gets compounded when you get into university and you get into your postgraduate degree and you can go that long without, you know, without getting any education. I think that You know, there are some people I talked to that can barely manage their, their, their debits and credits out of their bank account. You know, it becomes a major challenge when you don't have that, as you said, the financial literacy. But I think with a lot of the lawyers I deal with, the bigger issue is not even so much necessarily financial literacy as much as the time to devote to it. You know, they'll, they'll take more time to, to plan their next vacation than they will on their, on their financial affairs for the whole year. And so I think it's just having the time. in devoting the time to doing it, which is the, I think, as big an issue as financial literacy itself. But I agree, it's something that should be taught, you know, somewhere along the line, we should be learning that. That's right. No, that makes a lot of sense. And there's so much of a background, historical and all of that, to that of like why that is. But beyond that, you know, I'm thinking beyond, you know, correcting those things you said are the biggest mistakes, what are some of the things that you would say are things that young lawyers could do to, you know, or take early in their careers to set themselves up for financial stability in the long run? Well, I think the biggest thing is to be thirsty for knowledge, right? It's, you know, there's a lot of misinformation out there, but I think one of the first things that people could do is find a financial advisor, find somebody that you're comfortable talking to, ask around, you know, whether it's your parents, whether it's somebody at the firm that you're with, or whatever you're doing, just try and align yourself with a financial expert because that's going to be your number one conduit to getting good information. Unfortunately, the world of TikTok and Instagram and everything else, the social media world is wrought with some great advice. Yes, for sure. But wrought with terrible advice too. So I caution everybody that's listening to listen to what's out there, but You know, just be mindful that you should double-check with a, with a professional somewhere along the line. But I think from there, I think the biggest thing is figuring out what they want to do, figuring out what they want to do with money and then, and what they want to accomplish with it, what it means to them. Right. So many people I talked to, Claudio, and, you know, they, they come out of school with tremendous amount of school debt, you know, depending on how they grew up. They either grew up with a, I find, one of two trains of thought, a scarcity mindset or an abundance mindset. And that really dictates usually where they go in their financial lives too. So if they grew up with very little, they don't think that they're ever going to have enough money. It doesn't matter how much they make. They never think they're going to have enough money. It's aligning. And then from an abundance standpoint, they just think that money just grows on trees almost. There's a printing press that just puts money out. And that comes with a number of positives and negatives, but understanding which of those two you're coming from and which one is kind of ingrained in your brain can help dictate what you do with it. So I think talking to a professional and understanding and figuring out what you want to do with your money is probably the biggest first step. That makes a lot of sense. And Jeff, you, as we were preparing for the podcast, you mentioned to me that you have basically a personal mission to help lawyers with this and as early as possible, right? So if I may ask beyond, you know, the numbers, the strategies, uh, what are some of the personal values and philosophies that, that guide your approach to consulting? Well, there's a couple of things I think, you know, having been through, um, the dot-com crash, couple recessions, COVID, the banking crisis going back to 2008. You know, I think when I listen to and work with the older clients that I do, you know, I try to take wisdom from them too. The collective— that's, and that's part of the advantage of working with somebody like myself, Claudio, is that, you know, I've got the collective wisdom, not just of, you know, myself and my family and how I grew up, but those lawyers that have done tremendously well and those that maybe wish they'd done a little bit more. I think that the big thing is figure out what their goals are. Not just short-term. I think when you're younger, you start to think too short-term. You need to have a longer-term sort of perspective on how you view things and how you're looking at your life. And I think that really dictates, you know, a lot of what you end up doing with your finances or should. Yeah. That's— No, that makes a lot of sense. I have to agree. Having a clear vision, having clear goals, just helps in every single area of your life, right? I mentioned to you that I'm doing that project interviewing 75 lawyers, and that's something that I see often. You know, there's a lot of professionals that had such a clear vision for what they wanted out of the profession. And, you know, it took them 20 years or so to get there, but it felt like every single person that I talked to that had a clear vision, they got to it. And I'm sure there is all kinds of things. There is, you know, most of them had some flexibility along the way to get there. But ultimately they said, I came into law school thinking about this. I got it out of it. And it's incredible. I don't know if, as for myself, I have already that clear vision and goals, but it's been so inspiring to see all these professionals that do, because it does tell me that I need to have one just because I see that those that accomplish the most really have that in mind early on. And once you have those goals, it becomes easier to work towards it. Whereas it seems to me that if you don't, you kind of like invest a little bit in every different thing and then it doesn't have that compound interest, so to say, one, one single thing. So I do find that that focus is so important. Well, I think, and you bring up a very interesting point, actually, you know, so many of the people that I deal with, you know, when I, when I met a 62-year-old partner at a large firm during COVID and she was referred to me and she wanted to retire in 3 years. And when we went through, I took her through a process and when we went through, It became really clear fast that she wouldn't be able to do it in 3 years, not unless she saved every dollar of her 7-figure, you know, I won't say salary, but her 7-figure income for the next 3 or 4 years, she wouldn't be able to do it. And I think, you know, when I hear, and that's not an anomaly, unfortunately. So, you know, somebody like yourself, as you're saying, if you can go back and you can set sort of a larger vision, like I said, you know, at the very beginning, sure, things are going to change over 20, 30, 40 years, of course. But if you at least have an endpoint in mind, you can sort of start to map out the steps to get there. And I think that that's one, you know, the 2 things that people don't really pay attention to are one, as I said earlier, not having that long-term vision, but then strategizing on how to get from point A today to point B, you know, whatever that is at 25 or 30 years up the road and having clarity. Clarity is a great word and I'm glad you used it in what you want to do and what kind of lifestyle you want to lead both now and in the future is a huge, huge step and really taking the time to think about it and be clear on that. That's a great point. Well, that's incredible. And going back to what you said today, you kind of mentioned, you know, a few different pillars, I would say. of like financial health. So basically talked about, you know, savings, insurance, all of that. And if I may ask you, what about taxes? Is there something, you know, related to taxes also that, you know, lawyers should be aware of, that they should be talking to their accountants and with their financial advisors about? Is there something that they should— is that something that they also should have in mind as they're considering their— their assets and all of that. Absolutely, Claudio. I think that really at the end of the day, there are 2 big eroders to one's ability to grow wealth. One is divorce and 2 is taxes. Those are the 2 biggest issues that can erode somebody's finances real fast. So I think that, you know, and I just had a conversation the other day with a young lawyer couple. They're not quite at the stage of working through professional corporations yet. But being mindful of that and the opportunities that go around that kind of planning. So I think tax always has to be a part of the equation, whether it's being mindful and contributing to your RRSPs, putting money into your TFSA, which is a tax-free vehicle, having an FHSA, first home buyers plan. These are important. And I think that, you know, being mindful of tax and how to mitigate A little bit. We all have to pay it. Death and taxes, the 2 certainties in life, but you can certainly do things to minimize that. Now, Claudio, unfortunately the opportunities to really minimize it don't come along until you're working through some sort of corporate holding, but being mindful of that and working with, again, a good accountant's huge. Very, very important. And again, going back to a financial advisor, I'm not a tax guy. I know enough to be dangerous, but I would always recommend talking to a tax person. Amazing. Absolutely. And if I may ask you now in another sense, you mentioned about insurance and that also brings to mind the whole idea of legacy and estate planning as well. So I feel like lawyers have this specialty, they take care of their clients in that sense, but I don't know to which extent we as a profession prioritize our own estate planning as well. Is that something that a financial advisor can also, you know, give some tips or information about? What are some considerations that lawyers should have in mind regarding that? Well, I think, you know, estate planning and creating a legacy are huge, especially these days. A lot of the older people that I deal with, a lot of the older clients are very concerned about how they're going to leave tax effectively, going back to your tax question. tax-effectively leave a legacy for the next generation or 2. And I find that again, as I, as I mentioned earlier, younger lawyers, that seems so far off that it's, that it's not even on their radar yet. In fact, it's one of those things that should always kind of be in the back of your mind a little bit, but as you get along, so once you, you know, there's kind of a continuum. So at the beginning, it's get rid of debt, start a savings program, create good habits. And then as you start to mature both in your career, but also financially, that's when you can really start looking at how do I leave that legacy? I have a couple of clients that have left money to endow chairs at their universities as an example. So it's not just internal legacy, but external like that too, whether that's your favorite charity, favorite hospital, Leaving money behind is a huge planning point right now, especially in today's uncertain economic times. People feel, people that are making a lot of money are feeling compelled to leave a greater legacy. And I think that there are a number of ways you can do that. And I feel that there's a lot of ways that you can do that early, but it's all about priorities, but it's definitely becoming a bigger, a bigger part of the planning process for sure. And I love what you've been saying so far. You know, a lot of it has been about, you know, Having information, having that thirst for knowledge and taking that into consideration. I know that to some extent you've taken the matter to your own hands, also making content available for free to people through your podcast. So can you tell us a little more about this initiative, the name of your podcast, how can people find it, and also what kind of impact you're hoping to achieve, you know, in the lawyer community as they navigate their financial journey? Well, the podcast is a good one because, Claudio, as you know, with a podcast, you can reach a greater audience. And I think that part of my, my sort of internal personal mandate in wanting to help younger lawyers and wanting to help the legal community in general, I had to figure out a way to broaden that reach. And so a good friend of mine, Kelly Margani, who is the CEO of the Southern Group, a consultancy group within the legal community. We decided that we'd put together this podcast to help lawyers of all, of all ages and stages from, you know, those in law school still right through to the senior partners and beyond. It's been a couple of years in the making. We're only, we've only got a couple episodes out so far, but the hope is to provide greater education both on financial matters, which is what I speak to, but also from a How to build your book, how to build a practice, which I think is a huge, uh, and probably another thing really that isn't taught in law school either. You know, the business development part, how do I manage a practice? These are the things that Kelly speaks to. So the combination of both our viewpoints, our vantage points through the conversations we have with our clients, we're hoping to just spread that out to the world and just provide more of an education that's not already out there. Amazing. Yeah. Thank you so much for doing that. That's, that's in a way, you know, very, very graceful and generous of you and Kelly to be doing. We need, you know, we need more reliable information on that. And I'm sure that some people might, you know, feel a little ashamed to, to reach out for help right away. Also when they get to hear your podcast, when they get to get a feel, you know, I feel for your personality and all of that, it connects on a human level. And it becomes easier to, you know, reach out. They're like, this is such a cool guy. I want to talk to him. Listen, Claudio, I sure hope that that's the case, but I think more than anything, I think people need to know, and I think lawyers in particular are a great subset within the legal community, needs to know that they're not alone. I think there's a lot of people that I, that I meet that think that, as you mentioned earlier, because I'm a lawyer, I have to have my shit together. And the truth is. Most don't. And so it's okay. It's okay to ask for help. It's, it's, you know, I said this to a client the other, or not quite a client the other day, who is very, very well known in his particular practice area. And I said, listen, if I needed help in another practice area, what would you do? You'd help me find that person in that practice area. You're not an estate lawyer. So you'd refer me to somebody within the firm. Or if I needed help, you know, from a taxation issue or whatever the case is. So you can't be expected to know everything. So reach out and it's okay to reach out. So that's one of the other things we're hoping will become a, you know, a side benefit to all this too. Amazing. Well, to wrap up today's episode, if I may ask you for 2 things, is there, you know, a final piece of advice you'd wanted to leave with people? And also how could they reach out to you if they wanted to talk to you personally? Well, if anybody's listening or for those that are listening today, I think the big thing is Start early, start early, start as even if it's small, start a savings program today. That's number one. Number 2, find some help along the way. DIY, I know it sounds like it's easy enough, but it takes time, energy, knowledge, and a little bit of discipline to do all that. So, you know, having a professional helping you along the way is also key. Because I think at the end of the day, lawyers more than a lot of professions, um, you work really hard for your money, you know, billable hours and, and, you know, working hard for that dollar. You got to get your money working hard for you. So that's the, the, you know, the biggest thing that you want to try and do is don't, don't squander it. Work hard, play hard, enjoy life. Yes. I'm not the, the no latte guy. So start early and be consistent. I'm, as you mentioned, I'm on LinkedIn. That's probably the easiest way to find me. I post a lot of content. I post pretty much daily on there. So if you're looking for information, please take a look there. The Wealthy Lawyer Podcast, which you mentioned, it, we drop new episodes every other Sunday. So we have our next ones coming out on the on the 2nd, March 2nd. Um, but you can check us out there and, um, yeah, I'm on all social handles, but basically, uh, LinkedIn's the easiest way to find me. Fantastic. I'll make sure to put that link on the description of the episode as well. So if you're listening, just check out the description of this episode and it will be linked right there. Well, thank you so much, Jeff, for your time today and for the opportunity to know, hear a little bit of your advice. Thank you for, for taking the time to, to share all of this with us. Really appreciate it. Well, thank you, Claudio, for having me. And I, I appreciate the opportunity and listen, if anybody wants to chat, I'm always available to speak. You can reach out to Claudio or myself directly through LinkedIn. I, I'm here to help and I wish everybody good luck. Amazing. Thank you all for tuning into this episode and we'll see you in the next episode. Take care, you all.