I’m surprised by how often financial planners will recommend to all their clients that they sell all their RSUs. Sometimes, this is the correct answer. But I think this conversation deserves nuance. Whether navigating thousands, hundreds of thousands, or especially millions of dollars, managing your RSUs is one of your most important financial decisions. So, let’s have a strategy.
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Whether you are on the verge of an IPO, liquidity event, tender offer, or have been building up cash for a specific goal, you may be wondering, how you can optimize what you doing with your cash, above and beyond using a high-yield savings account. Here are some of the options I’ve been discussing with clients lately and have been using in client accounts to optimize large cash holdings (above $100k) with a focus on tax efficiency.
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Collaborate with a financial planner to determine the amount of wealth that creates your full financial freedom and plan for the long term by developing a comprehensive financial plan. Engaging in a comprehensive cash-flow analysis and future projections with a financial planner can provide valuable context not only for deciding what to do with equity proceeds but also for aligning your wealth with what brings you joy and fulfillment. Doing so can also help create the context for developing a plan for future liquidity and the decision of how much OpenAI stock to hold for the long term.
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Here are a few of the books that I most enjoyed and had the largest impact on my thinking in 2020. I offer them in hope that you will find one that enriches your life as much as they have enriched mine.
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This is the first San Francisco Wealth Planning annual letter.
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If you’ve been scouring the internet trying to wrap your head around the concept of the alternative minimum tax (AMT) and how it applies to your startup’s equity compensation you’ve probably come across at least one financial advisor, tax professional or journalist that has tried to scare you into believing that the AMT is a confusing mystery , far beyond the common woman or man.
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It turns out Incentive Stock Options are not unlike this playground seesaw. By taking advantage of the characteristics of your options, you can both leverage funds you have earmarked for option exercise to increase income while also protecting yourself from the underlying company stock’s potential downside.
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No other book in the last three years has had more of an impact on the way I make decisions, view relationships, and attempt to organize my thoughts.
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The single most important factor in considering if and when to exercise your options is their underlying value when they reach full liquidity – either through being acquired, following an initial public offering (IPO), or when the team closes shop. The fundamental question is, ‘will my startup succeed?’ But how do you measure this trajectory?
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Using three examples, we would like to clarify for you how ISOs work, and how to maximize their benefits while avoiding costly mistakes. We’d like to help you proactively understand your incentive stock options so that you can maximize their benefits.
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Wouldn’t it be nice if every financial firm laid out its priorities, and every financial blogger and author shared with us their biases? Perhaps one of the reason’s the Department of Labor is in the process of implementing the new fiduciary laws is for this very reason: it’s hard to know where people stand.
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The good news is that there are financial planners who have a fiduciary commitment to work in your best interest and who will help you with this. The second piece of good news is that a little bit of knowledge goes a long way. Today we’ll explore a few methods for determining your life insurance needs.
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You’ve probably heard before that disagreements about finances are the leading cause of contention in marriages. It’s scary. Opening up about our finances requires vulnerability about hopes and dreams, our sense of security, and our feelings of inadequacy, pride, and self-worth.
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Our financial capital is measured in the dollars and cents currently in our bank, investment accounts and personal property. Our human capital is measured by our income earning power over our remaining lifetime. As we grow older, our financial capital usually increases, but our human capital declines.
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In the last few years, the buzz about socially responsible investing (SRI) has been rolling through the investment world. Money has poured into socially responsible funds. Investors want to know whether their investments are contributing to positive change in the world. A recent study found that 40% of financial advisors say that SRI is important to them and their clients.
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Establishing a living trust requires the assistance of an estate attorney and will often be created in conjunction with your will, an advance medical directive, and financial powers of attorney. Attorney fees vary by firm. I’ve seen them beginning around $2,500 and rising with the complexity of the planning.
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I would venture the guess that most of my friends think of estate planning as an activity for wealthy, aged people. And it most definitely is. But as the complexity of our lives increases with home ownership, the arrival of children, and a growing nest egg, the need to develop an estate plan starts knocking at our doors as well.
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