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Welcome to the 52nd edition of the Tech Financial Planning (TFP) newsletter.
In late 2023, a new client, let’s call her Sally, started working with us.
Sally was already doing quite well with her investments and career, but she felt something was missing with her financial strategy.
Despite already having an advisor, Sally wasn’t getting the proactive planning she needed.
Her investments were doing reasonably well enough, but when she asked questions about her comp plan, diversification, future planning, and budgeting, she didn’t get the answers she was looking for.
Her old advisor's advice was simple: “Just keep doing what you’re doing; you’re doing great.”
Indeed, Sally was, and is, doing great.
She’s propelled her career, increased her income, and grown her investments significantly over the past few years.
But “just keep doing what you’re doing” is a huge miss.
We believe that even when you’re doing 90%, 95%, or even 99% of things right, that remaining 1% can have a massive impact.
It’s that last piece that provides more flexibility and freedom in the years to come.
In our partnership with Sally, we went beyond the advice of “keep doing what you’re doing.”
We dove into her compensation, put a plan in place for her company equity (both what she has and what she will be getting), diversified her investments, and crafted a proactive plan for the years ahead
The result?
Sally not only continued her success but is now even better positioned for the future.
Why share Sally’s story?
Because it highlights a fundamental truth: even when you’re doing well, there’s almost always room for improvement.
It’s about making the most out of your income, your career, and your equity, and ensuring that every piece aligns for your future.
An example - not a recommendation
Beyond “Good Enough”
Last week, in a discussion with fellow advisors, the topic revolved around helping those who are “all set” but perhaps not “optimized.”
By “all set,” we mean people on track for retirement and/or doing a good job of saving.
“Optimized” refers to the potential for improvements in their financial plan.
Some of the advisors believe it’s challenging to assist those already doing “good enough.”
But that’s where the magic lies!
We firmly believe in getting the planning right, not just to be ready for retirement, but to maximize the potential of your money.
Many of you, our readers, and the families we work with are well on track for retirement.
Through hard work and some good fortune, you earn more than the Average American.
This brings both opportunities and challenges:
You have more money to save, invest, and spend
You also face a larger future tax bill due to your your higher earnings, savings, and benefit structures (like 401k and equity). This is both a problem and an opportunity.
Your retirement timeline is different - unlike most Americans, with proper planning, you likely won’t have to wait until full Social Security age to retire or be work optional. Many of you will have the opportunity to be work options in your 50’s or early 60’s (or sooner).
By any measure, most of you are doing good enough, or even great.
But I’ve found that there’s almost always areas for improvement, and this can lead to big outcomes down the road.
1 Degree Makes A Difference
Consider this: an airplane flying from Los Angeles to Rome covers 6,327 miles in about 12 hours if it goes in a straight line.
A mere 1-degree deviation south could land it int Tunisia, Africa, while 1 degree north might lead to Slovenia or Austria.
This seemingly small 1% difference can lead to vast disparities (or if you want to look at a more catastrophic example, the difference of being two degrees off course led to the Mount Erebus disaster in 1979).
1% doesn’t feel like a lot, but over the course of 10, 20, 30 years, it adds up.
It could be the difference between being all set and getting it right.
Getting it right could mean the difference between retiring on time and retiring 10 years early.
Getting it right could mean the difference between staying in a job you hate (or perhaps tolerate) and having the ability to walk away and do something you love (and perhaps less well paid)
Getting it right could mean the difference between always feeling you have to take the next promotion and taking a year off to travel with your family.
Getting it right, in turn, means options.
Putting It All Together
I am passionate about the importance of good, proactive planning because I’ve witnessed the outcomes when it’s done right, and conversely, when it’s not.
Much like a flight going 1 degree off course, the impact is in the small adjustments and changes over a long period.
My clients are the engine of the plane, doing the hard work of earning, saving, and investing.
It’s my job to make sure they are on the right path.
If you are looking for proactive planning, want to make the most of your income or equity, or are wondering how you can use it to support your lifestyle, reach out and schedule a free consultation.