Ten Money Questions for Michael Melcher
Michael Melcher is one of the country’s leading career coaches. He’s also an attorney and author of The Creative Lawyer, a self-help and career management book for attorneys. Obviously, he took his own advice and now runs an executive coaching practice for individuals and corporate clients including such heavies as Google and Citigroup. He’s well-spoken, well-traveled and gets personal below about money and career satisfaction.
1. Do you think most lawyers go to law school because it offers a good chance for earning potential? If so, why are so many unhappy at being wealthy lawyers?
I think that most people choose go to law school because it offers them a general sense of security, of which income potential is one kind. Becoming a lawyer offers the possibility of money, status, a clear identity, the opportunity to help others, connection to public policy, credibility in the business world, as well as the wolf-in-sheep’s-clothing lure of keeping your options open. The problem is that most would-be lawyers do not examine specifically what they want and how achievable those goals might be before they make the decision to go to law school. So many go into the profession with the vague, unexamined idea that they will have a career that will allow them to help people AND make a lot of money AND be intellectually stimulated AND be relevant to the marketplace. People might manage to put all these factors together with effort, but rarely will it just happen. So typically reality is different from what people expect, in part because their expectations are, to use a fun legal word, inchoate.
Lawyers are the profession with the lowest job satisfaction. (Doctors are second.) Oddly, lawyers are also, on average, the highest paid profession. Wealthy lawyers who are unhappy are unhappy because there are other things they want out of life that they are not getting. Money might be important, but it’s not the only important thing. Since most lawyers enter the field at a very young age, they typically don’t have much experience in other sectors, and therefore have little idea how to adapt themselves to other kinds of jobs. So their unhappiness is increased by a sense of being trapped, which is not really true. Unhappy lawyers are the keepers of their own cells. (That’s why they need to get my book!)
2. What is your most significant memory about money?
Starting in fourth grade, I had a paper route for three years. (I was Carrier-Salesman of the Year for the Scottsdale Daily Progress in 1974!) I had my own bank account and loved riding my bicycle to the bank every Saturday to deposit my collections. At that time, you carried a passbook that you handed to the teller so that your deposits would be recorded. I loved watching those numbers add up. (In some ways I think my money skills peaked around age 11.)
3. What is your worst habit around finances?
I don’t like budgeting, so my budgets tend to be very vague. Since I don’t specifically plan how much I will spend, I experience a kind of spending creep. So for instance, if I am on a trip overseas, either for pleasure or business, I will start giving myself little upgrades (“for $100 more per night, I can stay at the Shangri-La, so why not do it, because it’s important that I be well-rested and happy for my workshops!”) — without actually keeping track of the overall outlay. Okay, I definitely need to work on this.
4. As a career coach, do you find that most people are in conflict with deeper values when it comes to money?
I think that most people have not honestly examined what money means to them, nor have most people examined what’s actually important to them. Instead they assume that there will be ultimate conflict with money, so they don’t do anything to change. It’s very socially acceptable in the U.S. to say, “Well, I’d like to do X, but I can’t afford it.” There are lots and lots of unexamined assumptions in that sentence, yet it will typically choke of all further inquiry. So, while some people may in fact experience a conflict between money and other values — actually I’m a good example of this — that’s not usually what is stopping them from moving forward.
5. How do we balance what we’re called to do vs. what we need to earn?
The clearer you are about what you’re called to do, the easier it will be to figure out a way to earn enough money to live on. And what you’re called to do may take the form of a full-time job or it may fit into your life in other ways. Of course, figuring out your actual call can take awhile.
6. How would you personally compare your attention to finances when you were a practicing lawyer and now as a career coach?
I pay a lot of attention to the financial aspects of running a business now (like how much I charge, what kinds of clients I want, what types of support staff will help me grow) but I can’t say that my attention to my personal financial management now is substantially different from what it was ten years ago. I think that personal financial management is a lot like flossing your teeth — it’s just something one needs to do on a consistent basis throughout one’s life. And if you don’t floss for several months or years, you will end up with problems that take quite some time to overcome. And make you feel really unattractive.
As an entrepreneur, I see huge advantages to having a regular salary, as I used to have. However high or low, a regular salary is a clear benchmark against which you can measure your spending and savings. In my current life, my revenues and costs can go up and down dramatically, so I have to be really careful not to lose track of things.
7. You get hired to speak all over the world and in this humorous blog post you share the ingredients of your long-flight cocktail. If I increase the dosage in Coach, will it feel like I’ve been upgraded to Business class?
Five extra milligrams and a few winks from a cute flight attendant and you are on your way!
8. Do you and your partner see eye-to-eye on money?
My partner, like my mother, considers me a spendthrift. On the other hand, I’m the one who paid the mortgage while he was getting his second law degree (a three-year J.S.D.) so I don’t think he’s got any cause to complain. We keep our finances separate which might seem unusual for two people who have been together for 13 years, but it works fine.
9. Did your parents offer you any pearls of wisdom when it came to finances?
My mother is extremely resourceful financially and I think she passed this down to me. When I was eight, my parents divorced and my mom went back to graduate school at ASU. We were culturally upper-middle class but without any cash flow for several years. So during this period I had lots of informal lessons in how to live decently with very little money. For instance, I had to order child’s portions in restaurants up through some humiliating age, like 12 or 13. I do think that one reason why I always had my own jobs growing up (paperboy, worker in chocolate banana factory, employee at Winchell’s Donuts, dorm bathroom cleaner, et al) is that I really saw having my own income as a way to independence. Money always had lots of emotional connotations in my home, so I always felt the sooner I could control my destiny, the better.
I used to think that my mom’s financial savvy came from being the child of poor Mexican immigrants, but I have friends from exactly the same demographic background whose parents didn’t have her particular skills, so I think it was just her.
10. You’ve earn a boatload of degrees from some impressive and expensive schools. Did all this education come with a price?
There is no torture more sweet than reading the alumni magazine of the Stanford Graduate School of Business. All those nice people with perfect teeth who are making so much more money than I do and who look so happy doing it. But I digress.
Education has a big opportunity cost. One thing people don’t realize is that if you work after college and move ahead at a moderate level, you can gradually earn higher salaries and save money. Education, especially a four-year graduate degree like the one I did, can be a major interruption to that.
That said, the cost of my graduate education was lower than one might expect, largely because I was extremely crafty about how I managed it. I worked for four years between college and grad school, which allowed me to be considered financially independent for purposes of financial aid. I worked every day of each summer; was a teaching assistant for an undergrad class; and for two of the four years won a major fellowship that was specially directed toward people who had advanced knowledge of a certain unusual languages (mine was Chinese). I was not as strict with expenses as I could have been, but I did do thing like bringing my own coffee in a thermos every day. My parents together bought me a $9,000 car (Mazda 323) and paid my auto insurance but other than that I was self-funded.
Most of my classmates at Stanford Law School and Stanford Business School did not seem to have good financial habits. The least capable ones seemed to be the kids of affluent parents who had paid their entire undergrad bills and then decided to set them loose to teach them something. “You’re on your own, now, kid.” In contrast, students from working class or lower-middle class backgrounds seemed much more practical.
More about Michael F. Melcher
Michael Melcher is an attorney who is one of the country’s leading career coaches. With a blend of humor, sensitivity and professional acumen, he has helped hundreds of individuals transform their careers into personal platforms that are professionally fulfilling and personally meaningful. A gifted speaker and workshop leader, he has addressed audiences on career development themes across the United States as well as in Europe and Asia.
He is a graduate of Harvard College, Stanford Law School, and the Stanford Graduate School of Business. He worked for several years as an associate at Davis Polk & Wardwell in New York, was previously a Foreign Service Officer, and is currently is a partner at Next Step Partners, the leadership development and executive coaching firm.
The Creative Lawyer is his second book; his first was The Student Body, a novel about an Ivy League prostitution ring that he co-authored with three friends under the pen-name “Jane Harvard.”
Read other Queercents interviews in the Ten Money Questions archive.