Being a Lawyer vs Being an Electrician: Net Worth Simulations
- March 23, 2020
- by Michael
When you picture someone who is accumulating a lot of wealth, do you typically think of a doctor or lawyer, or someone who has less formal education like an electrician or plumber?
Depending on what stage of their career they are in, an electrician may have a significantly higher net worth than a lawyer. Read on to see how the numbers may work in either profession’s favor.
Here’s what you can learn about electricians, lawyers (and other career paths) by running some comparisons on the Wealth Meta Income and Spending Simulator.
We ran a simulation using a 47 year timeline. This timeline ranges between ages 18 and 65 years old. In order to keep things consistent, we are going to assume the lawyer and electrician have the same living expenses and budget. This makes it a lot easier to compare their salary differences. In this simulation, both the layer and electrician will get a monthly budget of $1500, which will increase with inflation. Of course in reality their spending many differ wildly. So what we are really computing is potential net worth, or the difference between their incomes.
So, You’d Like to Be an Electrician?
Typically, there are two training routes an electrician can take. They can choose to attend trade school or apprentice with an experienced electrician. As an electrician, you can start working once you graduate high school. The apprentice route allows the electrician to avoid student loan debt, although in many states mandatory classes are required to become licensed.
The average electrician earns $59,190 per year according the US Bureau of Labor Statistics. Keep in mind, salaries vary depending on experience, the type of work, and the state of residence. Electricians in the top 75% make $72k / year and those in the top 90% make $94k / year.
Assuming the electrician starts in an entry level job and moves up to a journeyman in 4 years, and then a master in another 4, this leaves the electrician with $5.0 million by the time they retire. View Electrician’s simulation here.
So, You’d Like to Be a Lawyer?
Next, they will have to pass the LSAT in order to get accepted into law school. Law school will cost about $78,792 for an in-state public education. There is also the lesser known option of reading the law, which bypasses law school (and associated expenses) entirely.
After they graduate they can choose to complete a clerkship at a law firm to gain experience or take the bar exam. According to the US Bureau of Labor statistics, the average lawyer makes $141,890 / year. Attorney's in the top 75% make $178k / year and those in the top 90% make in excess of $208k / year.
Assuming the lawyer goes straight to college after high school, then straight to law school, then immediately lands a job as an associate, and after 4 years becomes a partner they will end up with nearly $13.7 million when they retire. View Lawyer’s simulation here.
The lawyer clearly accumulates significantly more than the electrician. However, there’s a point of time where the lawyer has a negative net worth of $205k due to student load debt. That is a lot of money to pay back for a career they have not worked in yet and may not enjoy.
This analysis only looks at the pure numbers you can expect when pursuing a career as an electrician or lawyer. But the numbers don’t account for any bumps along the way. For example, even if someone attends law school, that doesn’t mean that they will pass the bar exam or find employment in the area they want.
Another example is if the electrician was unable to work due to a disability. Since they must use their bodies for their practice, any injury could set them back.
- The electrician hits $1M in net worth around year 24 of the simulation, or age 42.
- The lawyer hits $1M in net worth around year 19, or age 37.
- The electrician hits $2M in net worth around year 33 or age 51.
- The lawyer hits $2M in net worth around year 23 or age 41.
- The lawyer has a maximum debt of ~$201k (year 8 of simulation) while the electrician's is zero!
- The lawyer’s net worth catches up to the electrician after year 16 in the simulation (when they are both 34). So for the first 16 years the electrician is ahead on paper, but from there the lawyer’s net worth out paces in the electrician's.
Try building your own simulation (view then save as...) to explore your own assumptions: