June 17, 2026
Should Big Law attorneys invest in individual stocks?
With SpaceX’s recent initial public offering (IPO), the largest ever, many investors, including Big Law attorneys, are wondering if they should get in on the action. And rightfully so, the stock surged from an IPO price of $135 to $160 on its first day of trading, and to over $200 as of the writing of this article. That makes the company more valuable than Amazon, Meta (Facebook), and Elon Musk’s other child, Tesla.
So, should Big Law attorneys get in on individual stocks?
My honest answer: no. Not because they can’t. The law allows it once you clear some compliance hurdles with your firm. The problem is what picking stocks actually demands: the time to research a business, the discipline to follow it, and the temperament to hold through the tough times. Most attorneys I work with bill over 2,000 hours per year, and they want to spend the little spare time they have doing things they enjoy, like spending time with family or pursuing hobbies.
So instead of asking whether they can pick stocks, the better question is what actually builds wealth at their income level. The answer is almost always the same, and it has nothing to do with picking stocks.
Focus on Your Savings Rate, Not the Rate of Return
A while back, I ran the numbers on two hypothetical couples in their mid-thirties, both earning $500K. The Moonshots were sharp traders who did well picking individual stocks but weren't diligent savers. The Boringtons weren't great investors, so they kept it simple with low-cost index ETFs, but they were disciplined about saving. Here's the part that surprises people. Even earning half the Moonshots' rate of return, the Boringtons end up with over $2.5M more in retirement, purely because they saved more. Bump the Boringtons to a more reasonable 7% return, and they reach over $9M, roughly $5M ahead.
| Moonshots | Boringtons | |
| Household Income | $500,000 | $500,000 |
| Dollars Saved Annually | $25,000 | $100,000 |
| Savings Rate | 5% | 20% |
| Average Rate of Return (ROR) | 10.00% | 5.00% |
| Portfolio at retirement (30 Years) | $4,112,351 | $6,643,885 |
The takeaway for a big law attorney billing 2,000 hours: focus on what you can control, which is your ability to save.
That said, if one of those hobbies is stock trading, by all means, go for it, but I recommend following this rule: keep your individual stock (or crypto) portfolio under 5 percent of your investable assets.
Why You Should Keep Your Individual Stock Portfolio to Less Than 5% of Investable Assets
Don’t get me wrong, buying individual stocks has some appeal. If you pick the right company, you could really hit it big. Take Tesla, for example: if you invested $1,000 at the Initial Public Offering (IPO) price of $19/share in 2010, and accounting for the two stock splits, your initial investment would be worth roughly $320,000 today. Not necessarily life-changing money, but it’s a massive return on investment—43% compounded annually, to be exact.
The problem with trading individual stocks is that for every Tesla success story, there are more failures than we can count. For example, Nikola, a former competitor of Tesla, filed for Chapter 11 bankruptcy in 2025 and saw its stock drop to pennies. A once $30 billion company is now virtually worthless.
The 5% rule
If you decide that trading individual stocks is worth your time, I recommend keeping those positions to less than 5% of your overall investment portfolio. For example, if your portfolio of investable assets is worth $500,000, no more than $25,000 should be invested in individual securities, such as stocks and crypto. This ensures that if one of those companies goes belly up, your core portfolio is insulated.
Bottom Line
So, should Big Law attorneys invest in individual stocks? For most, the honest answer is no, and not because they can't. Picking stocks takes time, attention, and discipline that a 2,000-billable-hour schedule doesn't leave room for. And that's perfectly fine, because stock picking is not what builds real wealth in the first place. Your savings rate is. If you genuinely enjoy following the market, go ahead and swing for the fences, but only with 5 percent of your investable assets. Put the other 95 percent in a diversified mix of low-cost ETFs, focus your energy on saving more, and let compounding do the rest.
Need Help Making a Plan?
Knowing your savings rate matters more than your returns is the easy part. The hard part is turning that into a real number: how much to save, where it should go, and how to build a diversified portfolio of low-cost ETFs that will provide a steady rate of return over your lifetime. That's the work I do with Big Law attorneys every day.
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SharpEdge Financial LLC is a registered investment adviser registered with the State of Texas. Registration does not imply a certain level of skill or training. The views and opinions expressed are as of the date of publication and are subject to change. The content of this publication is for informational or educational purposes only. This content is not intended as individualized investment advice, or as tax, accounting, or legal advice. Although we gather information from sources that we deem to be reliable, we cannot guarantee the accuracy, timeliness, or completeness of any information prepared by any unaffiliated third-party. When specific investments or types of investments are mentioned, such mention is not intended to be a recommendation or endorsement to buy or sell the specific investment. The author of this publication may hold positions in investments or types of investments mentioned. This information should not be relied upon as the sole factor in an investment-making decision. Readers are encouraged to consult with professional financial, accounting, tax, or legal advisers to address their specific needs and circumstances.