Student Loans Part 1: How Millionaires Think About Debt (Ep. 124)
Are student loans holding you back from building real wealth as a law firm owner? If so, you’re not alone and there’s a better way to think about your debt.
On this episode, I explore how high-achieving attorneys use their student loan debt as a stepping stone, not an anchor. I share valuable tips on how to reframe your relationship with debt, avoid common financial mistakes, and kickstart your path to millionaire status even with six figures in student loans.
The Student Loan Reality for Law Firm Owners
It’s no secret: the average attorney graduates with about $145,000 in student loans—often more than their first-year salary. After years of hard work, your debt can feel like a heavy weight, making it seem impossible to both run a successful practice and build lasting wealth.
But here’s the truth: your debt isn’t a measure of your worth or your financial intelligence. It’s a tool—a calculated investment in your future that can actually accelerate your path to financial freedom, if you approach it the right way.
Why Millionaires Think Differently About Debt
Most financial “experts” will tell you to become debt-free before you even dream about investing for the future. But that approach is overly conservative and, frankly, it could hold you back. Here’s how wealth builders and especially successful law firm owners think differently:
1. Debt is Leverage, Not a Life Sentence
Leverage means using borrowed resources to achieve greater results. Consider your student loans: without them, you’d have spent years saving rather than building your legal career. By investing in your education early, you started earning sooner and increased your lifetime income.
Successful business owners see debt as a tool that can speed up progress not as something to fear.
2. Don't Delay Wealth-Building Activities
A big mistake is waiting until your student loans are gone before you start investing or saving for retirement. Time is your most valuable asset—the sooner you start, the greater your wealth potential, thanks to compounding growth.
3. Avoid Raiding Your Retirement Accounts
It’s tempting to tap into your 401(k) to pay down debt, but this can sabotage your long-term goals. Your retirement funds are protected and have incredible growth potential—using them to pay off loans is a short-term fix with long-term costs.
Two Costly Mistakes Law Firm Owners Make With Debt
Let’s be specific. Here are two common errors to watch out for:
Postponing Retirement Investing Until Debt-Free
Don’t put off investing because you have student loans. You can and should strike a balance between paying off debt and building future wealth.Pulling From Retirement Accounts to Pay Off Loans
Dipping into retirement savings can become a habit, eroding your wealth over time. Your business and personal finances should work together, but never raid your retirement to solve cash-flow issues.
Adopting the Millionaire Mindset
Your law degree was an investment. The right mindset shift is to see your student loan as financial leverage—not as a shackle. Focus on using debt wisely, investing early, and building good habits now. This is the path high-net-worth attorneys take to reach financial independence.
By combining smart business planning for your firm with a confident, balanced approach to personal finances, you can become a Lawyer Millionaire.
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Transcript:
Darren Wurz [00:00:00]:
What if your student loans could actually make you richer? Welcome to the Lawyer Millionaire, helping law firm owners build their businesses and their wealth. I'm your host, Darren Wurz. Perhaps you graduated law school with six figures of debt and now you feel stuck. You're not alone. The average attorney carries $145,000 in student loans, and many wait years before they even think about building wealth. But what if that mindset right there is the real problem? Before we dive in today, a quick reminder. Our Lawyer Millionaire Book club is in full swing this quarter. We're reading Buy Back youk Time by Dan Martell.
Darren Wurz [00:00:40]:
Join us for the live Zoom discussion on September 19th and get strategies to reclaim your time and scale your firm. Details in the show notes. All right, onto today's episode. You know, what if student loans weren't a burden, but a launching pad? What if the way you think about debt is more important than the debt itself? In today's episode, we are kicking off a special student loan series. Six episodes to help you finally take control of your loans, build wealth, and stop letting debt define your future. And it all starts here with a mindset shift that could change everything. Okay, so today in our new podcast series, Student Loan Success, let's be real. Law school debt is no joke.
Darren Wurz [00:01:35]:
The average law school graduate carries about $145,000 in loans. As we mentioned, that's more than the average starting salary of most attorneys and way more than most college grads carry. And yet, somehow, as a law firm owner, you're expected to build a business, grow your net worth, and invest for retirement while dragging around this massive financial anchor. So for the next six episodes, we're going to unpack everything you need to know to conquer your loans with clarity and confidence. Today, we're talking about how millionaires think about debt. In our next series, we'll look at proven strategies to pay down loans. And then in future episodes, we'll look at the things like the age old question of should you invest or pay down your debts? First, we'll explore student loan forgiveness and creative repayment options. The top five mistakes that lawyers make with their student loans.
Darren Wurz [00:02:30]:
And we'll wrap up with Life After Loans. What to do once you're free and flush with extra cash. Right. Okay, sounds good. So let's get into it. So according to U.S. news & World Report, the average private law school tuition in 2019 was $49,500 per year. I can only imagine it's more.
Darren Wurz [00:02:51]:
And by the way, this all comes from my book, the Lawyer Millionaire, published By the ABA. You can get your copy at the ABA. We have a whole section on student loans in the book and I'm drawing a lot of information from there. So, you know, I know this is such a huge topic for so many lawyers and so many law firm owners. We really wanted to dive into this. So 2019, 49,500 per year average private law school tuition. I imagine it's a lot more now. And at that time, public school in state tuition was $28,000 annually.
Darren Wurz [00:03:28]:
Inflation has been a lot over the recent few years, right? And you know, tuition has gone up as well for most law school attendees. And, you know, that's just part of the problem because you didn't just go to law school, you had to go to undergrad first. You had to survive the lsat, right? You had to, you had to get your four year bachelor's, right? And you know, most, many, maybe not most, but many law school students are driven by prestige, right? Wanting to go to a great school, you know, so they can land a great job, have a great legal career. And there's often a perception that in the legal profession prestige matters. And in some areas it does. We've talked before in this episode or on this show about how where you went to law school really doesn't matter in the grand scheme of things. I've seen law firm owners who did not go to the most prestigious schools end up being extremely, extremely successful. So the correlation is not as strong as you might think.
Darren Wurz [00:04:36]:
But still, a lot of people feel that they need to go to a very expensive school to earn that prestige. So that just compounds the problem, right? So if you're feeling overwhelmed by your debt, you're not crazy and you're not bad with money, you're not irresponsible. These are not. This is not a place to feel guilt or shame, even though you may feel that way. You're just a professional who invested in your future like many, many other people. And now you need a plan to turn that investment into financial freedom. And I want you to start thinking about your student loans as an investment. Okay? So here's the truth, here's the truth that most financial gurus won't tell you.
Darren Wurz [00:05:25]:
Debt is not inherently bad. You know, there are many financial gurus out there who say you need to pay off all of your debt before you even start thinking about investing, even your mortgage. I'm sure you might be familiar with who some of those folks are. Now, I'm not saying that's inherently the absolute wrong thing to do. Or that's going to harm you necessarily. But it's a very, very conservative approach. And maybe it's too conservative. I meet people all the time who are trying to aggressively pay down their mortgage and wipe out all of their student loans before they even open a retirement account.
Darren Wurz [00:06:01]:
And I get it. The idea of being debt free feels great, doesn't it? Not to have any debts hanging over your head. Ah, but you know what? The debt's not killing you. Yes, it costs some money, and yes, there's payments to be made, but it's not out there hunting for you. I know it feels that way sometimes. In reality, the advice to pay down your debt before you invest is, in my opinion, not correct. Not the best. Not the best.
Darren Wurz [00:06:28]:
Especially when interest rates are reasonable. So we want to think critically about debt and what makes the most sense. Because wealthy people don't think about debt as something to fear. Let me say that again. Wealthy people don't think about debt as something to fear. In fact, some of the wealthiest people on earth are the most indebted. I won't name names, but I'm sure you can think of some, especially in public life right now. Wealthy people think about debt as leverage.
Darren Wurz [00:07:00]:
So let me give you an example. What is leverage? Well, I love the concept of leverage because I used to be a middle school science teacher and I taught physical science and we had a little bit of physics. Right. Even though I studied biology in college. But we won't go into that. So have you ever used a bottle opener to open a bottle? A beer bottle bottle, a glass Coke bottle, any kind of bottle? Right. That opener is a form of mechanical leverage. Right.
Darren Wurz [00:07:34]:
You are not simply. You simply were not strong enough to get the cap off of the bottle. Your hand alone wasn't strong enough. But with the right tool, you can apply force more efficiently. So a leverage allows you to multiply force to apply a greater force to an object to make it move. Right. That's the concept of leverage. And debt works in the same way.
Darren Wurz [00:08:02]:
Debt is a form of what we call financial leverage. You use debt as a tool to get things done faster and hopefully to make more money in the long run. Right. You use debt to accelerate your education. You didn't have to save up $150,000 before going to law school. You were able to get started sooner. Can you imagine if you had to save up all the money for law school before going to law school? It would take a long time and you would be behind the curve in getting your career started. Instead, you got started Sooner, you began earning sooner and you've boosted your lifetime income potential.
Darren Wurz [00:08:40]:
That's not weakness, my friend, that's leverage. And here's the kicker. Wealth equals savings times time. So let's talk about that, right? You know, let's go back to what we were saying. You know, the concept of should I wait to invest? And we'll get into this more, but in future episodes. But if you wait to invest until your loans are gone, you will miss out on your most powerful asset, which is time. Wealth equals savings times time, right? That's not a mathematical formula. It's just that those are the two biggest components.
Darren Wurz [00:09:18]:
The amount you're saving and the amount of time you have. You can't control necessarily what the stock market does. Sometimes the stock market has 20% plus years, sometimes it has negative years. Most years are historically have been positive. Long term average return 10% or so. Right? But you don't know exactly what the market's going to do. And if you're not investing, you're going to miss out on that potential. The earlier you start, the more compounding works in your favor.
Darren Wurz [00:09:51]:
And we've talked about compounding on this show before, how it's just the weirdest, craziest phenomenon you have, you know, but the more time you give it, the more powerful the compounding becomes for you in growing your wealth. So let's talk about what not to do. Two mistakes that I see over and over again. Number one, mistake number one, putting off investing until you're debt free. Right? This should be kind of obvious at this point right now. I'm not saying neglect your debts entirely and put money in the market instead. There is a balance, and we're going to talk in a future episode about what that balance is. But that's mistake number one.
Darren Wurz [00:10:35]:
Mistake number two is dipping into your retirement funds to pay off your loans. Boy, I've been there. I've dipped. I admit it. But it's dangerous now, you know, in some cases, it might make sense to dip in. You know, it might logically make sense to dip into your retirement funds to pay off loans. Not just student debt, but any kind of debt. But let me tell you why this is dangerous.
Darren Wurz [00:11:01]:
I used to think that, you know, sometimes this might make sense, right? Let's say you have some very, very high interest debt you need to pay off. And, you know, pulling some funds out of your retirement might help. Well, it's not a great idea. And here's why. It's behavioral. Every time I've seen someone do it, pull money out of a 401k or an IRA. It opens a doorway. It makes you more open to the idea in the future.
Darren Wurz [00:11:33]:
It removes the inhibitions that you have against spending your retirement funds. And it's like an addiction. Every time a client has said to me, I just need to pull money from this account, just this one time. It's never just once, let me tell you, just once becomes again and again and again every time you feel financial pressure. And the problem is your retirement funds are not a never ending source of money. So don't pull money out of your retirement funds to pay down debt. Because debt is a cash flow issue. It's not an asset issue.
Darren Wurz [00:12:14]:
It's a cash flow issue. So if you haven't solved the cash flow issue, if you take money out of your retirement funds and use that to pay down debt, but you haven't fixed the cash flow issue, you're going to wind up in the same exact place all over again. And worse, taking money out of your retirement funds devastates your long term growth. Trust me, I have clients in this boat and I have seen it. You know, they've been getting historical stock market rates of return, but they've been stuck at the same level in their portfolio, or worse, their portfolio value has declined over time because they've been pulling out cash. And you're not just pulling out a chunk of cash. You're destroying what that money could have become. Retirement accounts are protected.
Darren Wurz [00:13:04]:
They're protected from creditors and they grow tax deferred. They're your future. So here's my rule. Never ever, ever raid your retirement accounts to pay off debt. You, you will regret it. And your future self will regret it also. So here's the mindset shift I want you to walk away with today. Right? Debt is not evil.
Darren Wurz [00:13:28]:
Student loan debt is not evil. It's not the enemy. It's a tool. It's a form of leverage. And millionaires don't let student loans stop them from building wealth. They use debt strategically. They invest early. They focus on the long game.
Darren Wurz [00:13:44]:
They think about what can this, what can I invest in that this is going to do for me? And you can do that too. Look, you became a lawyer to create a successful career and a life of freedom, not to stay stuck in a cycle of financial stress. So that first step of reframing your thinking, how you think about debt is step number one in, in building long term wealth. And that's exactly what we one of the things that we help law firm owners do. We at the lawyer, millionaire founders network help law firm owners integrate your business growth and personal finances so that you can make smarter decisions, grow your net worth, and stop letting money hold you back. It only makes sense. Your business and personal life are connected. They're intertwined.
Darren Wurz [00:14:34]:
They they affect each other. So it only makes sense to have somebody on your team who's helping you think about that entire big picture. Want to learn more about how we do that? Visit lawyermillionaire.com and download the first chapter of my book, the Lawyer Millionaire. It's completely free and don't forget to join our book club. As I mentioned, also free, we are reading Buy Back your Time this quarter and the live Zoom discussion is happening September 19th at 3pm Eastern. You can jump into the book club and you can get the invite and the Zoom link and we would love to see you there. You'll find all the details in the show notes. And don't forget to join us next time where we'll explore the mechanics of how to pay down student debt strategically.
Darren Wurz [00:15:24]:
Who is the Lawyer Millionaire? It's you, my friend. Own it and live it. I'm your host, Darren Wirtz. Thanks for joining me. See you next time.