Egads!! I am ashamed to admit this, but I must. I am an IA.
Let me tell you right now, I don't want to be an IA. But, if I am going to be brutally honest with my readers, I have to admit to you all today that I am.
What is an IA?
I am currently reading Thomas Stanley's new book - Stop Acting Rich
The opposite of an income statement affluent is a BA, balance statement affluent. This is a person who has a lot of assets. The funny thing about the BA is that they don't necessarily make a lot of money. But, despite this, they have a high net worth because of their frugal lifestyle.
How did I become an IA?
I would like to say that the only reason that I am an IA versus a BA is that I have a lot of student loan debt. But, if I am being honest with myself, this is not the only reason why.
Becoming a lawyer has allowed me to make a nice income. But, that privilege to work as an attorney came with a very high price tag - $150,000 in student loan debt.
While the first step to me becoming an IA was financing law school with student loans, the second reason why I am an IA is I bought a house before I had saved enough money.
When I graduated law school, I felt a ton of pressure to buy a house. All of the partners in my law firm told me that I had to buy one to get the tax deductions. Housing prices were going up every year due to the housing bubble being in full force.
Boy, thinking back on it now, there was a lot of pressure put on me to buy a house.
But, I fought off buying a house for five years after graduating law school. But, with the birth of my second child, my wife and I decided that we needed more space.
During the five years prior to buying a house, my apartment rent was around $1,000 a month. But, after buying a house, my home mortgage was around $2,200 a month.
The increase in my housing costs helped keep me in the IA camp, but it is not the full reason. It was the fact that I did not save $1,200 a month while I lived in my apartment.
It is obvious that I could have afforded to save the extra $1,200 a month. After all, I was able to afford my monthly mortgage payment. If I had saved that money during those 5 years, I would have saved $72,000. That would have been a huge down payment and a huge step in the right direction to becoming a balance sheet affluent.
Not saving that $1,200 a month for those five years shows that my spending habits are also keeping me in the IA category. But, now that I have admitted this, I can start changing my life to become an BA. And lucky for you, you will get to read about my journey 
So, what about you? Are you an IA or a BA? Tell us about your story in the comments below.
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{ 3 comments… read them below or add one }
Ya, I think I am going to be an IA until I get out of this debt death grip (okay, maybe not that bad).
Then we will work on becoming a BA.
Think I am going to need to read his book. He puts out some great blog posts updated thru twitter (@thomasjstanley).
Money Funk´s last blog ..Separate Bank Accounts with Your Spouse?
Wait, did you write an article about MY life or yours?!? I’m an IA too. My wife & I both have student loans from college and law school. She’s found a good paying job but I’m still finding my way. We’re working hard to reduce our lifestyle and pay off those loans. We also bought a house right after getting married, although it is at a reasonable price.
Good luck shedding that IA status – you know I’ll be pulling for you!
Jason @ MyMonryMinute´s last blog ..There’s An App For That: Low-Cost Life Insurance
I am glad that I wrote this post. It is nice to see that others are in the same boat as me.
Jason, what type of law do you and your wife practice?