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Welcome to the 49th edition of the Tech Financial Planning (TFP) newsletter.
My typical client looks like this:
Tech employee with equity comp
Household income of $350k+ (potentially more once you factor in equity comp)
Good chance current / former Procore
Usually 1-2 kids (or planning on it) and probably a dog
High cost of living
Looking for someone to help them navigate all the complex planning that comes up.
Here are the 6 areas we cover for clients.
Equity Comp
Company stock typically represents a large part of a) our client’s income b) net worth or c) a combination of the both.
And for most, it’s confusing and overwhelming.
My experience is that most people hold onto their shares because they aren’t sure what they should do with them – inaction and inertia rule the day.
What should I do with my company stock?
How much should we keep vs sell?
What are the tax consequences?
Cash Flow
Our clients are higher earners than most, which means they have more money to save, invest, spend, and pay taxes on.
There’s often uncertainty on how to use their money best:
How much should we keep in cash?
Should we pay down debt or invest?
There’s so many different types of accounts - where should we put our money?
Tax Planning
Because our clients are higher earners, they have a much larger lifetime tax bill than most.
This is both a problem and an opportunity.
Our goal is to save the most amount of taxes over the next 30+ years, not just today.
Will I owe in taxes?
Does this align with our long-term goals?
Risk Management
We buy insurance to protect against the big, worst case scenarios and hope we never have to use it.
It’s for events that probably won’t happen, but if they do, would impact you and your family in a big way.
Do we have the right protection in place?
How long are we protected / covered?
Are we paying for coverage we no longer need?
Estate Planning
Everyone has an estate plan - the question is, is it yours, or is it the governments?
We can either plan now and make our choices know or let the government decide later - spoiler alert, you probably won’t like it.
Who takes care of our kids?
Is our estate plan up to date?
Are all of our assets titled correctly?
Have any of the key people changed?
Investments
Our goal is to build a portfolio that:
a) fits our client’s various timelines (short, medium, long term)
b) helps them achieve their goals
c) they can stick with
Are you taking the appropriate amount of risk?
Do you have the right investments for the right timelines?
Do you have too much concentration in any one stock or sector?
Putting It All Together
Our client’s lives are busy.
Between work, family/friends, and hobbies, there isn’t a lot of extra time to think about investing, college, or what to do with their stock options and RSUs.
So they choose to outsource that area of their lives.
If this sounds like you and you are looking for someone to ease your financial complexity and help guide you, we would love to talk.