DO MORE WITH YOUR MONEY: Recent Episodes

TJ van Gerven

Planning strategies for doing more with your money on the path to financial independence. The DO MORE WITH YOUR MONEY podcast will teach you how to optimize taxes, invest strategically, and plan for financial independence. CFP® Pro and fiduciary Financial Planner TJ van Gerven shares his expertise in the areas of equity compensation, diversification, and early retirement. To learn more about TJ's independent Financial Planning firm Modern Wealth Builders, head to modernwealthbuilders.com - You can also connect directly with TJ on Twitter @TJvanGerven

Connect with James: https://vanreuselventures.com/

Connect with TJ: https://mementofinancialplanning.com/links

In this conversation, T.J. van Gerven interviews James Vanreusel, founder and CEO of Vanreusel Ventures, about the multifaceted role of a CFO, the importance of financial strategy in business growth, and the behavioral aspects of finance. They discuss the significance of having an exit strategy, the necessity of understanding personal finance, and the lessons learned from tennis that apply to business resilience. James emphasizes the importance of cash flow management, investment strategies, and the balance between personal and professional life, while also addressing the social responsibilities of capitalism. The conversation concludes with advice for the next generation of entrepreneurs and the importance of prioritizing family and personal values.

Takeaways

CFOs are essential for financial strategy and leadership. Most founders do not start with an exit strategy. Understanding behavior around money is more important than just knowing the numbers. Building a cash cushion is crucial for business resilience. Investing in oneself is the best investment for entrepreneurs. Diversifying investments is key for financial security. Patience is vital in navigating financial markets. Surrounding oneself with experienced advisors can lead to better outcomes. Family should be prioritized over work commitments. Career success is a marathon, not a sprint.

Chapters

00:00 Understanding the Role of a CFO 02:45 Navigating Business Growth and Exit Strategies 05:51 The Importance of Financial Metrics 09:43 Behavioral Finance: Understanding Money Mindsets 12:36 Lessons from Sports: Resilience and Strategy 14:40 Cash Flow Management for Business Owners 17:00 Balancing Profit Extraction and Reinvestment 19:01 The Entrepreneurial Journey: Risks and Rewards 21:43 The Future of Business: AI and Automation 24:46 Long-Term Thinking in Financial Planning 27:48 The Value of Relationships in Business 31:35 Prioritizing Family and Personal Well-Being

Connect with Lauryn: https://www.lauryn-williams.com/

Student Loan Planner: https://www.studentloanplanner.com/

In this episode, T.J. van Gerven and Lauryn Williams discuss the complexities of managing student loan debt, including public service loan forgiveness, income-driven repayment plans, and the implications of recent policy changes. Lauryn shares her personal journey from being an Olympian to becoming a financial planner, emphasizing the importance of understanding one's unique financial situation. The conversation covers various strategies for managing student loans, the risks of refinancing, and the impact of marital status on repayment plans. Listeners are encouraged to take proactive steps in their financial planning to optimize their student loan situations.

Takeaways

Lauryn's journey from athlete to financial planner highlights the importance of financial literacy.
Public Service Loan Forgiveness (PSLF) requires specific employment and payment criteria.
Income-driven repayment plans can significantly reduce monthly payments based on income.
Refinancing student loans can eliminate federal protections and benefits.
Married couples should consider filing separately to optimize student loan payments.
Tax implications of student loan forgiveness can be substantial and should be planned for.
Understanding the different types of student loans is crucial for effective management.
Proactive financial planning can lead to significant long-term benefits.
Consulting with a financial advisor can provide personalized strategies for student loan management.
Staying informed about policy changes is essential for effective financial planning.

Chapters

00:00 Introduction to Student Loan Management 02:45 The Journey to Financial Planning 05:46 Understanding Public Service Loan Forgiveness (PSLF) 08:25 Income-Driven Repayment Plans Explained 11:31 Navigating Changes in Student Loan Policies 14:05 Refinancing vs. Consolidation of Student Loans 16:56 The Impact of Student Debt on Young Professionals 19:53 Choosing the Right Repayment Plan 20:37 Understanding Student Loan Payments and Interest 23:15 Marital Status and Student Loan Repayment Strategies 26:12 Tax Implications of Student Loan Forgiveness 28:23 Personalized Financial Planning for Student Loans 31:39 Navigating Income-Driven Repayment Plans 33:55 Retirement Contributions and Student Loan Payments 36:55 Taking Action on Student Loan Management

On this episode of 'Do More With Your Money,' T.J. van Gerven chats with Certified Financial Planner and money expert Shannah Game. Shannah, who hosts the successful podcast 'Everyone's Talking Money' and authored 'Unraveling Your Relationship With Money,' shares insights from her career on financial planning and education. The discussion delves into Shannah's personal journey in the financial industry, the concept of money trauma, and common financial behaviors, including scarcity and spendthrift mindsets. They also cover the importance of financial literacy, managing joint finances in relationships, and teaching children about money. Shannah emphasizes that understanding one's emotional relationship with money is crucial for making positive financial decisions and offers actionable advice for both individuals and families.

Connect and learn more about Shannah

00:00 Introduction to Today's Episode

00:47 Shannah Game's Journey to Financial Expertise

02:36 Understanding Money Trauma

04:01 Common Financial Behaviors and Mindsets

06:39 Millennials and Money Challenges

08:52 Building Healthy Money Habits

13:01 Teaching Kids About Money

15:56 Maintaining a Healthy Relationship with Money

21:27 Combining Finances in Relationships

25:45 The Pursuit of Financial Independence

30:10 Shannah's Book and Final Thoughts

In this episode of "Do More With Your Money," T.J. van Gerven is joined by John Briggs, CEO of Incite Tax. John shares his entrepreneurial journey and insights into tax planning, client relationships, and the importance of understanding actual profits. Key topics include the benefits of electing S Corporation status for tax savings, the Qualified Business Income deduction, and the importance of proactive tax planning. John also discusses the value of boredom for creativity, effective breaks for productivity, and practical financial tips like setting up a tax savings account and prioritizing high-interest debt repayment. The episode offers a holistic approach to financial and mental well-being.

Learn more about John's firm, Incite Tax here: https://incitetax.com/

Yohance Harrison, the founder of Money Script Wealth Management, joins T.J. van Gerven in this episode of "Do More With Your Money." Yohance shares his journey from financial hardship to becoming a chartered retirement planning counselor and behavioral financial advisor. The discussion delves into the importance of financial literacy, the concept of "money scripts," and how personal beliefs shape financial behaviors. Yohance emphasizes the distinction between self-worth and net worth, the role of political climates in financial planning, and the necessity of focusing on controllable factors. Practical advice on debt management, budgeting, and creating a financial plan is also provided.

In this episode of the "Do More With Your Money" podcast, host T.J. van Gerven speaks with Brent Boden, a seasoned financial advisor specializing in medical professionals. Brent, also the host of the "Physicians Financial Checkup" podcast, shares his journey into financial literacy and his passion for assisting others. The discussion focuses on financial planning for new physicians, emphasizing the importance of financial literacy, managing student loan debt, and strategic investment choices. Key takeaways include the significance of building emergency savings, understanding income changes, and avoiding lifestyle inflation. Brent encourages seeking reliable financial guidance and highlights the role of personalized financial planning.

Learn more and connect with Brent: https://www.brentboden.com/

In this podcast episode, T.J. van Gerven talks with Jeff Le Sage, the founding partner of Liquid Stock. They discuss how Liquid Stock helps employees and shareholders of late-stage private companies access liquidity without selling their shares. Jeff explains the benefits of exercising stock options early to manage tax obligations and maximize gains. He highlights Liquid Stock's unique structure, which uses shares as collateral for advances, providing a tax-efficient solution. They also cover the importance of timing and planning for equity compensation, and Jeff shares his vision for Liquid Stock's role in changing how companies handle equity.

Learn more about Liquid Stock Here

In this episode of "Do More With Your Money," host TJ van Gerven welcomes Steve Coughran, a renowned business strategist and founder of Coltivar and Boosting Your Financial IQ. Steve shares his journey from growing up in a financially challenged household to building a multi-million dollar business. He emphasizes the importance of financial literacy and understanding key investment principles like return on invested capital and the rule of 72. Steve discusses the dangers of speculative investments and the value of long-term strategies. He also highlights the rise of solopreneurs and the significance of investing in oneself for long-term financial success.

Learn more about Steve and his businesses, Coltivar and Boosting Your Financial IQ (BYFIQ)

https://www.coltivar.com/

https://www.stevecoughran.com/

https://www.byfiq.com/

In this podcast episode, Bobbi Rebell, a Certified Financial Planner and CEO of Financial Wellness Strategies, shares her journey and insights on financial independence. She discusses her book "Launching Financial Grown-Ups," inspired by her challenges in engaging her stepchildren in financial conversations. Bobbi emphasizes the importance of understanding the emotional side of money and setting financial boundaries. She also highlights the impact of the COVID-19 pandemic on parent-child relationships and the trend of younger generations delaying major life milestones. Bobbi advocates for open financial discussions, multigenerational conversations, and intentional financial decision-making.

Learn more about Bobbi and connect with her here:

https://www.bobbirebell.com/

https://financialwellnessstrategies.com/

Bobbi's LinkedIn

In this podcast episode, T.J. hosts financial expert Adam Carroll, who shares his journey from college debt to financial responsibility. Adam introduces the "shred method," a technique using home equity lines of credit to reduce interest expenses on debts like mortgages and student loans. He explains how this method can save money and increase financial security, even with low-interest rates. The discussion covers the benefits of 30-year fixed mortgages, conscious spending, and the potential of cash value life insurance policies. Adam also touches on infinite banking and the FIRE movement, offering practical tips for managing money and achieving financial independence.

Learn More About The Shred Method

Adam's LinkdenIn Profile

In this podcast episode, financial coach Mandyy Thomas joins us to speak about helping people with their money worries. She shares her own story and gives tips on how to manage finances better. Mandyy teaches how to plan for big and small costs and how to save money wisely. She also talks about the importance of understanding your actual income and living within it. Mandyy explains how to deal with the emotional side of money, like fear and anxiety, and how to grow your main income instead of just having side jobs. She also talks about the importance of feeling safe with your money and how to make smart choices when buying things. Mandyy invites listeners to connect with her on Instagram to continue the conversation.

Learn more about Mandyy and her financial coaching practice at https://mandyythomas.com/

Follow Mandyy on Instagram

In this episode of "Do More With Your Money," host T.J. van Gerven chats with Rocky Lalvani, a chief profitability advisor and certified profit first professional. Rocky shares his journey from a money-savvy kid to helping business owners prioritize profit and pay themselves first. They discuss the importance of understanding money mindsets and the psychology behind financial struggles. Rocky emphasizes that profitability isn't about revenue alone; it's about what's left after expenses. He also highlights the need for business owners to track investments and manage cash flow effectively. The conversation covers the significance of aligning financial planning with personal values and goals. Rocky concludes by advocating for financial automation as a key to building wealth. Throughout the episode, they explore the behavioral aspects of financial decision-making and the importance of learning from losses.

Learn more about Rocky and his businesses at https://profitcomesfirst.com/ and https://richersoul.com/

Connect with Rocky on LinkedIn

In this episode of "Do More With Your Money," host TJ Van Gerven talks with financial planner Leland Gross about the unique financial planning needs of realtors and self-employed millennials. Leland shares his journey from insurance sales to comprehensive financial planning, emphasizing the importance of fee-only advice and the challenges faced by small business owners. They discuss investment diversification, the balance between enjoying life now and planning for the future, and the risks of high-return pursuits. Leland also highlights the importance of work-life balance, using tools like success shifters and time blocking to maintain a fulfilling life. The episode concludes with Leland's advice on using money as a tool to craft a good life, rather than an end goal.

Click here to learn more about Leland and his financial planning practice

The Self-Employment Success Podcast

In this episode of "Do More With Your Money," host T.J. van Gerven interviews Jay Zigmont, PhD, CFP®, founder of Childfree Wealth. Jay, a financial planner specializing in advising childfree individuals, discusses the lack of financial planning services tailored to the 20-25% of the U.S. population not planning to have children. He highlights the unique financial planning challenges and opportunities for childfree people, such as the flexibility to live differently from the standard life script and the potential to focus on personal joy rather than traditional retirement. Jay also introduces the concept of "Financial Independence, Live Early" (FILE), a twist on the FIRE movement, emphasizing living a fulfilling life over merely retiring early. The conversation covers the importance of planning for long-term care, decision-making in the absence of next of kin, and the societal shift towards accepting childfree choices. Jay advocates for a financial plan that allows individuals to pursue careers and lifestyles that bring happiness, even if it means earning less.

In this episode of "Do More With Your Money," host TJ and financial advisor Mike Troxell discuss the challenges and strategies involved in financial planning, particularly for individuals with complex equity situations. They explore the emotional aspects of financial decisions, the importance of life planning, and the balance between enjoying life and maintaining financial security. The conversation also covers sabbatical planning, the evolving role of financial advisors, and the benefits of outsourcing to experts like CPAs. Mike emphasizes the importance of wisdom in financial decision-making and ends with a personal note on the joys of family life.

In this episode of "Do More with Your Money", host T.J. van Gerven interviews Vrishin Subramaniam, a financial planner who specializes in assisting Indian millennials and Gen Z living abroad. They discuss the unique financial challenges faced by this demographic, including issues related to visas, cross-border money management, immigration status, taxation, and currency transfers. Vrishin also shares his insights on investment preferences, retirement planning, insurance considerations, emergency fund planning, and the viability of cryptocurrency. The conversation concludes with a discussion on the importance of finding a balance between hard work and enjoying life.

In this episode of "Do More with Your Money," host T.J. van Gerven interviews financial planner Zechariah Schaefer. They discuss Schaefer's personal journey into finance, his focus on helping high-earning Gen Z and millennial innovators, and the common financial pain points his clients face. Schaefer shares his views on cryptocurrencies, the importance of rental income in real estate investments, and strategies for business owners. They also discuss the concept of impact investing and the importance of estate planning for younger clients.

Zechariah's firm website

Zechariah's LinkedIn

In this episode of "Do More With Your Money," host TJ van Gerven chats with financial planner and bitcoin advocate Isaiah Douglass. They discuss the history and evolution of money, the creation of Bitcoin, and its potential as a store of value and investment. Douglass explains the concept of Bitcoin's self-regulation, the role of miners, and the energy consumption of Bitcoin mining. He also discusses the potential growth of Bitcoin, the risks associated with having only dollar-denominated assets, and the importance of choosing a reliable custodian for holding Bitcoin. Douglass emphasizes the importance of education in understanding Bitcoin.

In this episode of "Do More With Your Money," host TJ van Gerven discusses the differences between Roth and traditional contributions for high-income earners. He explains the tax implications of both and how one's current and future income tax bracket can influence the decision. He also touches on the potential for future tax rate increases and the concept of Roth conversions or backdoor Roth contributions. The episode emphasizes that choosing between Roth and traditional contributions is a personal decision based on individual tax situations.

In this episode of "Do More With Your Money," host TJ Van Gerven discusses the often overlooked risk of long-term disability in financial planning. He explains the importance of having coverage, especially for those in early career stages, and highlights the need for understanding one's employer-sponsored coverage. Van Gerven also discusses the difference between own occupation and any occupation coverage, the potential limitations of employer plans, and the importance of supplemental coverage. He concludes by encouraging listeners to review their coverage, request their full policy from their employer, and explore portable coverage options.

In this podcast episode, TJ van Gerven discusses target date funds and their practicality for investors, particularly those who are just starting out. Target date funds are mutual funds designed for retirement investing with a specific future date in mind. The fund's asset allocation is adjusted over time to align with the target date, starting with a more aggressive investment strategy and gradually shifting towards a more conservative allocation. Target date funds offer a convenient one-stop solution for investors, with low expense ratios and exposure to international companies. While some argue they can be slightly more expensive compared to basic index funds, the difference is generally negligible.

In this podcast episode, host TJ van Gerven discusses the topic of withholding for high-income earners and understanding safe harbor rules. He explains the difference between withholding on paychecks and actual tax rates, highlighting that the withholding rate on bonus income may not always be accurate. To simplify the process, TJ suggests focusing on the safe harbor limit, which ensures that a certain amount is withheld on taxes to avoid penalties for under-withholding. He also advises keeping the extra tax reserve in a high-yield savings account to earn interest. TJ emphasizes the importance of working with a tax professional or financial advisor to determine appropriate withholding and estimated payments based on income.

In this podcast episode, host TJ van Gerven discusses the concept of the Mega Backdoor Roth 401(k) and how it can be a beneficial strategy for long-term savings and tax diversification in retirement. He explains the different types of contributions available in a 401(k) plan, including pre-tax and Roth contributions. He also highlights the benefits of making strategic financial decisions early in your career and building flexibility for future financial security.

In this episode of the podcast "Do More With Your Money," host TJ van Gerven discusses the wash sale rule and its implications for equity compensation. He explains what a wash sale is and how it can inadvertently be triggered with equity compensation such as restricted stock, stock purchase plans, and stock options. The consequences of triggering a wash sale are explored, including the disallowance of losses and complications in tracking cost basis and taxes. The episode concludes with an invitation for listeners to reach out with any questions on equity compensation.

In this podcast episode, financial advisor TJ van Gerven shares insights on how to effectively work with a financial advisor. He highlights the importance of understanding different types of advisors and their compensation structures. van Gerven suggests seeking advisors who prioritize advice and have a comprehensive approach to financial planning. He recommends reputable sources for finding advisors and emphasizes the benefits of working with advisors who specialize in specific niches. van Gerven also discusses various compensation methods and expresses a preference for a flat fee model. Lastly, he advises working with independent advisors.

In this podcast episode, TJ van Gerven discusses employee stock purchase plans (ESPPs) and their benefits and trade-offs. He explains that ESPPs offer a discount on company stock, potential savings through a lookback period, and the option to sell immediately for a profit. However, he warns about holding period requirements and concentration risk. van Gerven advises listeners to assess their cash flow and consider maximizing their ESPP contributions, while also emphasizing the importance of selling ESPP proceeds to avoid concentration risk and understanding the tax implications. He suggests using Rule 10b5-1 to plan the sale of company stock and encourages listeners to review their ESPP plans and take full advantage of the benefits.

In this episode of the podcast "Do More With Your Money," host TJ van Gerven discusses the societal pressure to purchase real estate as a primary residence. He highlights the changing cost of ownership and interest rate environment, urging listeners to consider their goals and run the numbers before making a decision. TJ breaks down the financial implications of owning a primary residence, emphasizing the time it takes to build equity and advising staying in a property for at least ten years. They question the wisdom of tying a large portion of net worth to a non-cash flow producing asset and encourage investing in the stock market and personal growth instead.

Peace of mind that comes with having financial resources. By building good financial habits and making strategic financial decisions, individuals can create a foundation of flexibility that opens up a world of possibilities. Whether it's taking time off to explore new opportunities or negotiating for higher income, financial flexibility provides the power to shape one's own future. TJ van Gerven encourages listeners to start early and prioritize building financial resources, as the hidden return on financial flexibility is invaluable in creating a life of freedom and fulfillment.

In this podcast episode, TJ van Gerven discusses portfolio construction from a holistic standpoint. He emphasizes the importance of the allocation between stocks, bonds, and cash as the largest determinant of expected return. TJ advises against overcomplicating portfolio construction by focusing on individual securities and suggests diversifying assets instead. He also highlights the significance of having a cash reserve for living expenses to provide peace of mind during volatile market periods. TJ emphasizes the importance of discipline and staying invested during market downturns, as attempting to time the market can lead to missed opportunities. Overall, he provides advice on constructing a well-balanced portfolio for long-term success.

In this podcast episode, TJ van Gerven discusses the dangers of not selling restricted stock immediately when it vests. He explains that while receiving vested shares may feel like a cash bonus, they are illiquid and cannot be accessed immediately.

van Gerven highlights the concentration risk of holding a significant portion of one's net worth in a single stock, suggesting that owning more than 5% is considered concentrated.

He also warns about the potential tax implications, as the withholding on vesting stock may not match an individual's actual tax rate.

In conclusion, he emphasizes the importance of understanding these risks and suggests selling immediately and diversifying investments, unless comfortable with the potential downsides.

In this podcast episode, TJ van Gerven, host of "Do More With Your Money," discusses the importance of understanding the real return on cash in an inflationary environment. He advises against holding too much cash, as it can lose value over time due to inflation. van Gerven suggests considering factors such as total cash position, net cash balance, fixed expenses, and personal spending habits when determining the right amount of cash to have on hand. He recommends aiming for a cash reserve of 3 to 12 months, depending on individual risk tolerance and financial situation. He also emphasizes the importance of maintaining good financial habits regardless of interest rates.

Read the blog post here

Read the blog post here

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Join weekly tips for pursuing FI

Join weekly tips for pursuing FI

Join weekly tips for pursuing FI

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Join weekly tips for pursuing FI

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Join Weekly Tips For Pursuing FI

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Join weekly tips for pursuing FI How should you approach exercising ISOs when you don't have the ability for a cashless exercise?

Especially common in pre-IPO situations you may not have enough cash to exercise your ISOs to get the clock ticking on long-term capital gain treatment.

In this podcast episode, I share some ideas for navigating this issue.

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Plan conservatively so you can invest aggressively.

In this podcast episode, I share how you can deal with market uncertainty by focusing on the things in your control.

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Putting too much emphasis on the "retire early" aspect of financial independence can create a scarcity mindset and limit you from obtaining what you really want sooner.

In this episode, I share why "work optional" is a better mindset for most people to focus on because it allows you to take breaks along the way while create a fulfilling life experience.

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Target date funds can be a great all-in-one solution for someone early in their investing journey who's looking to get appropriate investing exposure.

However, target date funds can create some problems as you continue to grow your investment assets outside of a workplace retirement plan since they fail to take into account your complete financial picture.

In this episode, I share some of the downsides target date funds can create as the complexity of your investment assets increase.

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What are the major downsides of paying AMT when exercising ISOs?

If you're not aware of the liability come tax time, you can create a cash flow nightmare.

If you're aware of the liability ahead of time, the main downside is providing an interest-free loan to the IRS with the AMT credits you receive.

An AMT credit is considered "non-refundable," meaning you have to have a tax liability in a future tax year that can be offset.

Depending on your tax situation in future years, it could take a while to recoup your AMT credit.

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You most likely don't need to be paying for permanent life insurance. Term insurance is a far more cost-effective solution.

In this podcast episode, I break down why you should keep your investing and insurance needs separate.

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Physician On FIRE: Tax-Loss Harvesting Guide

In this episode, I break down the basics of tax-loss harvesting and some major pitfalls to be aware of.

Join Tips For Pursuing FI Financial planning is the guide that leads you from the game you are playing to the game you want to be playing.

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In this podcast episode, I explore the differences between value investing and a passive investment style (market-cap-weighted).

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As we start 2022, now is a great time to map out your cash flow for the year.

How much of your income do you want to save this year and put towards growing your net worth to accelerate your path to FI.

In this episode, I share my framework for mapping out cash flow and automating planned savings goals.

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Changing jobs can have a substantial impact on the trajectory of your future earnings.

In this podcast episode, I share several considerations for comparing employment options and maximizing your compensation on the path to FI.

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With financial planning, you can have anything, but not everything.

Determine what you really want to quantify tradeoffs on the path to FI.

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In this episode, I share strategies that are in your control for dealing with inflation and FUD (fear, uncertainty, doubt) in general.

There will always be FUD on the path to FI.

By focusing on evidence-based strategies that are in your control, you can minimize the potential negative impact of inflation.

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Whether it's your fitness, finances, or business aspirations, build for balance and sustainability.

Prioritize long-term sustainability over short-term enthusiasm.

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In this podcast episode, I share crucial things to be aware of when pursuing equity compensation in a startup as a 1099 contractor. From health insurance to taxes and retirement plans, being 1099 presents a different set of financial planning strategies than a W2 employee. I also discuss the importance of prioritizing equity compensation over a higher base salary.

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With financial planning, start with a baseline vision of your desired lifestyle.

From there, you can start to quantify tradeoffs depending on how aggressive your vision is.

You can have anything but not everything.

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What is "enough"? What is the end vision for the lifestyle you're building towards?

In this episode, I share my thoughts around what "enough" means for me and how you can define "enough" for you.

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Regret optimization > Tax optimization

Focus on determining when is “enough” before focusing on tax optimization.

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In this episode, I share some of the most common employee benefits that you may have available and things to consider to maximize them.

Some of the benefits discussed include:

Health insurance
Life and disability insurance
FSA vs HSA
Dependent care FSA
401(k)
Stock purchase plans

One important feature to review with employee stock options (ISOs in particular) is the ability for an early exercise.

Especially with private shares, an early exercise before an increase in 409A valuation (combined with an 83(b) election) can decrease a potential AMT liability.

In this episode, I breakdown the essential information you need to know to take advantage of this planning strategy.

So you took a big bet on an individual stock and won, but what's next?

When do you transition from concentration to diversification?

Will you take more bets in the future?

In this podcast episode, I share the problem with taking big bets and the psychological dilemmas it can create.

Winning in the short term is great, but to win consistently, you need a sustainable strategy you can maintain conviction in.

Return on effort in the real world matters.

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In this episode, I share my thoughts on the current state of Bitcoin.

While I recognize the benefits of economic empowerment bitcoin provides, I remain skeptical of the hype as a long-term investment vehicle.

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Equity compensation can be a complicated financial planning topic to navigate especially if your company doesn't have the resources to provide the necessary education to help you make an informed decision.

In this episode, I share some of the common top mistakes I see people make with their equity compensation.

A broken clock may be right twice a day, but those shouting claims of market crashes are wrong far more often.

Market corrections and crashes are part of investing.

Putting yourself in a position to remain disciplined during periods of panic is a far more practical strategy on the path to F.I.

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In this episode, I share my initial takeaways from Biden's "American Families Plan" Tax Proposal including planning strategies to consider for the rest of 2021.

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It's not always about maximizing the monetary aspects of your finances. When are you doing enough? Are you spending in a way that provides happiness in the short term?

There's an opportunity cost to how we spend our time. Don't overlook the ways you can find balance by being more intentional.

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When considering the opportunity cost of investment decisions, it's important to have a benchmark to compare to for perspective around expected returns.

If you believe in the future of innovation, competition, and population growth, the global stock market is an excellent benchmark.

Technology has democratized access to low-cost diversified investing.

With a handful of ETFs, you can access a large portion of the investable global equity market.

Because of the low costs, (lack of) barrier to entry, and reasonable expected returns, the global stock market should be a starting point for comparing the opportunity cost of alternative investments and ultimately return on effort.

Anyone can throw money at an investment. I’m way more fascinated by someone with skin in the game actually building a business.

Especially when they lead with transparency around “how I built this.”

In this podcast episode, I share with you why it's better to invest in yourself than throwing money at an investment.

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If you own shares in a private company that turns into a publicly-traded company — you’ve already won. HOWEVER, once the shares are traded publicly, all bets are off.
Why? Because historically, IPOs have generally underperformed broader market benchmarks due to their fundamental characteristics.

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When it comes to the technical side of financial planning, there are three metrics I consistently come back to for determining the health of someone's finances.

Each metric is important depending on where you are in your financial journey.

In this episode, I share my thoughts on the importance of each metric and when you should start emphasizing tracking each one.

Have a game plan for managing concentration risk post IPO.

If you're waiting to see what happens with your company's share price, you're leaving yourself open to emotional "in-the-moment" decision making.

By having a game plan ahead of time, you can act quickly when it makes sense to carve out your path to financial independence.

Join the MWB community and receive weekly tips in the areas of equity compensation, tax optimization, and financial independence directly to your inbox Fridays at 4 pm (ET).

Join the MWB community and receive weekly tips in the areas of equity compensation, tax optimization, and financial independence directly to your inbox Fridays at 4 pm (ET).

It doesn't matter who it is; it's hard to provide specific advice if someone doesn't know everything about your personal situation.

While there is a lot of good info on social media and the internet, always keep the proper perspective that it may not apply to you.

In this episode, I share a recent example of contradicting my advice that someone had read on my blog.

Join the MWB community and receive weekly tips in the areas of equity compensation, tax optimization, and financial independence directly to your inbox Fridays at 4 pm (ET).

In this podcast episode, I revisit the investing debate about real estate (specifically rental properties) vs. portfolio (stocks, bonds, etc.).

Each type of investing provides its unique tradeoffs, and each type of investor tends to be biassed towards their preferred investing style.

I share some of the tradeoffs between the two types of investing styles and why you can do both!

Portfolio construction can get very complicated very quickly. In this podcast episode, I share my framework for constructing an investment portfolio by focusing on financial planning fundamentals.

The more complicated you get with investment selection, the harder it is to manage asset location and disciplined rebalancing across different account types.

Hunt the antelope, not the mouse.

Join the MWB community and receive weekly tips in the areas of equity compensation, tax optimization, and financial independence directly to your inbox Fridays at 4 pm (ET).

"If your financial advisor hasn't recommended Bitcoin yet, fire them." In this podcast episode, I break down why this is an ignorant statement and why a true financial advisor doesn't build recommendations around a single investment.

If you're tying the success of a single investment to your career, you're not a true professional who provides personalized advice in people's best interests.

Personal finance is personal. Be keenly aware of the incentives of whoever you take advice from.

Join the MWB community and receive weekly tips in the areas of equity compensation, tax optimization, and financial independence directly to your inbox Fridays at 4 pm (ET).

It doesn't matter how sophisticated a market timing strategy is - it's still a zero-sum game and shares characteristics with gambling. In a zero-sum game, one person's gain is equivalent to another's loss, so the net change in wealth or benefit is zero.

This implies that there will be winners. But there will also be (mostly) losers.

If you have long-term conviction in an asset - great. Hold for the long term relative to your conviction. In the real world, return on effort matters.

Time in the market > timing the market.

Join the MWB community and receive weekly tips in the areas of equity compensation, tax optimization, and financial independence directly to your inbox Fridays at 4 pm (ET). *Privacy Policy: I hate SPAM and promise to keep your email safe.

If your income is mainly from vesting equity comp, try and base your personal savings rate on your salary. It’s like winning the lottery.

Instead of making massive lifestyle changes, coast into your new-found wealth and avoid unsustainable lifestyle creep.

In this podcast episode, I share several ideas for coasting into your windfall via equity comp.

Join the MWB community and receive weekly tips in the areas of equity compensation, tax optimization, and financial independence directly to your inbox Fridays at 4 pm (ET). *Privacy Policy: I hate SPAM and promise to keep your email safe.

As a married couple, your finances are now combined, especially from a tax perspective.

When I sit down with a married couple, I'm showing them how they can use their combined resources to maximize their lifestyle and build towards individual goals.

It's ok if you and your partner don't view money the same. The important thing is to have an open and honest conversation (sometimes with an unbiased third-party professional) so that you're on the same page.

Listen to my in-depth thoughts in this podcast episode.

Join the MWB community and receive weekly tips in the areas of equity compensation, tax optimization, and financial independence directly to your inbox Fridays at 4 pm (ET). *Privacy Policy: I hate SPAM and promise to keep your email safe.

Join the MWB community and receive weekly tips in the areas of equity compensation, tax optimization, and financial independence directly to your inbox Fridays at 4 pm (ET). *Privacy Policy: I hate SPAM and promise to keep your email safe. In today's podcast episode, I provide a Q&A on the most common equity compensation questions I receive:

Q1: I'm interested in leaving my current job for another opportunity, but I'm worried about what will happen to the equity I've received where I work today. What should I do? Q2: My company is talking about going public in the next year and I have stock options that could be quite valuable. Should I be doing anything now to prepare? Q3: I love my company and the considerable equity I now own, but I'm worried I have all my eggs in one basket and don't know when we'll be able to cash out. What should I do?

The used car market is on fire right now. I can't remember a time when you could sell a used car for more than you bought it. In this podcast episode, I share a recent example of someone looking to arbitrage their lease buyout and sell for a profit in the used car market.

I also explore the practical implications of trying to time + arbitrage used car and real estate markets.

Join the Do More With Your Money community email list to receive weekly tips for maximizing equity compensation, optimizing taxes, and planning for your financial independence, directly to your inbox each Friday at 4 pm (ET).

*Privacy policy: I hate SPAM and promise to keep your email address safe.

Is Financial Independence, Retire Early (FIRE) actually 🔥 (something really amazing in a good way)? In this podcast, I explore the potential cons of creating a scarcity mindset to try to achieve F.I.RE..

While I'm obviously a huge fan of planning for future financial success, completely limiting yourself in the present can cultivate an unhealthy relationship with money.

Ideally, we should be working towards a healthy abundance mindset combined with intentional spending on the path to financial independence.

In this podcast episode, I break down what risk tolerance and risk capacity mean, and which one you should prioritize when starting to determine a portfolio allocation.

Ultimately, the best investment strategy is "the one you can stick with."

Working with an unbiased financial planning professional can help you determine your allocation, given your unique financial goals.

In this podcast episode, I go further in-depth on a tweet I had recently about alternative forms of wealth and living on your own terms.

Some alternative forms of wealth I discuss:

— Health — Youth — Time — Family — Friends — Community — Purpose

While monetary wealth is important, it's only one part of the overall wealth we can attain in our daily lives.

By understanding what forms of alternative wealth we value most, we can use financial planning to maximize the efficiency of monetary wealth.

In this podcast episode, I discuss using an equity compensation windfall to fund a prolonged work sabbatical.

I break down the high-level framework for how you can start to think about using your windfall to sustain your sabbatical.

Life is a marathon, not a sprint. You don't have to sprint towards financial independence. You can (and should) take breaks along the way.

In this podcast episode, I break down the story behind Peter Thiel's $5 Billion Roth IRA (sheesh) and what it means for you.

Specifically, the takeaways behind how you can benefit from the thought process Thiel used.

Do you want help managing your equity compensation?

Learn how to:

Optimize Taxes
Diversify Your Company Stock
Solidify Your Path To Financial Independence

Click here to start your FREE assessment.

In this podcast episode, I break down the key things to understand when it comes to interpreting your equity compensation vesting schedule.

It's crucial to understand your vesting schedule so that you can be mindful of your timeline for working at the company without leaving substantial money on the table.

Do you want help managing your equity compensation?

Learn how to:

Optimize Taxes
Diversify Your Company Stock
Solidify Your Path To Financial Independence

Click here to start your FREE assessment.

In this podcast episode, I share my thoughts around what it means to "win financially in your twenties".

By creating a vision early on of where you want to go, and taking micro-actions towards achieving that vision, can help you enjoy the present while not sacrificing your financial future.

If you can achieve the balance of enjoying yourself in the present without feeling like you're sacrificing your lifestyle while building towards future financial success, you're winning :)

Do you need to be worried about inflation? Why or why not? As always, it depends :)

In this podcast episode, I break down a few key habits that will help you determine if you need to be concerned about inflation expectations.

There's a lot of talk right now about the rising costs of goods and services given the amount of money in circulation from monetary policy response to the pandemic.

While this may cause an increase in inflation, economic forecasts are never certain, and it's best to focus on the planning strategies that are within your control.

Do you want help managing your equity compensation?

Learn how to:

Optimize Taxes
Diversify Your Company Stock
Solidify Your Path To Financial Independence

Click here to start your FREE assessment.

In this podcast episode, I break down the basics of quarterly estimated tax payments, when you need to make them, and how to satisfy safe harbor rules for avoiding underpayment penalties.

Especially for those with equity compensation, it's crucial to figure out if taxes are being withheld from the various forms of RSUs, options, and ESPP discounts.

That way, you can avoid being caught off guard by a large tax bill come tax time!

Lastly, if you have any recommendations for topics you'd like to hear discussed or questions you'd like answered in a future episode, shoot me an email at TJ @modernwealthbuilders.com

Do you want help managing your equity compensation?

Learn how to:

Optimize Taxes
Diversify Your Company Stock
Solidify Your Path To Financial Independence

Click here to start your FREE assessment.

In this podcast episode, I share why you should never sweat the opportunity cost of creating and maintaining a dedicated cash reserve.

I also share some rules of thumb for how you can start to determine the right cash reserve for you.

Can you quantify the expected return on peace of mind? I can't. To me, it's infinite.

Do you want help managing your equity compensation?

Learn how to:

Optimize Taxes
Diversify Your Company Stock
Solidify Your Path To Financial Independence

Click here to start your FREE assessment.

If you’re looking to be sold on an investment, eventually, you’ll find someone who will sell you an investment.

Instead of looking for an investment, ask yourself what you’re trying to achieve.

What’s your why?

Do you want help managing your equity compensation?

Learn how to:

Optimize Taxes
Diversify Your Company Stock
Solidify Your Path To Financial Independence

Click here to start your FREE assessment.

Do you want help managing your equity compensation?

Learn how to:

Optimize Taxes
Diversify Your Company Stock
Solidify Your Path To Financial Independence

Click here to start your FREE assessment.

In this podcast episode, I share an assortment of timeless money lessons.

I hope you enjoy these nuggets of money wisdom!

In this podcast episode, I share strategies for maximizing tax-preferential accounts like 401(k)s when creating a large tax liability by diversifying company stock.

Make sure that you're fully utilizing a pre-tax 401(k) if you're in an abnormally high tax bracket due to a windfall via equity compensation.

Make the most of your resources by filling up tax-preferential accounts in preparation for financial independence.

Money is fungible - make it do more! :)

Remind yourself that when RSUs vest and you don’t immediately sell, you’re making an active decision to increase your exposure in your company’s stock. Unless you made an 83(b) election at grant, there’s no avoiding being taxed as income at vesting.

You should be skeptical about pre-paying taxes on equity comp of an already publicly traded company over short time horizons. You can reasonably expect an increase from private to public, but once publicly traded, the collective market is pretty good at pricing expectations.

This and more in today's DO MORE WITH YOUR MONEY podcast episode!

In this podcast episode, I share three things you need to do when anticipating a windfall from equity compensation.

1) What type of equity do you own? Restricted Stock Units, Incentive Stock Options, Non-Qualified Stock Options, or a combination?

2) What is the vesting schedule of your equity comp? How much is currently vested vs. unvested? What are the exercise prices and expiration dates on any options? What is the blackout period for trading, and can you exercise unvested options to try to optimize for long-term capital gain treatment?

3) What's your long-term vision for creating your ideal life? How do you want to use the windfall to maximize happiness and fulfillment? Is financial independence important to you?

In this podcast episode, I discuss a common problem with exercising incentive stock options (ISOs) to try to optimize for long-term capital gain (LTCG) treatment.

I also discuss potential cash flow issues when you're caught off guard by potential alternative minimum tax (AMT) exposure.

If you’re concerned about FOMO, it's important to remind yourself how much illiquid “skin in the game” you still have.

Don’t keep playing a game you’ve already won to try to save a little bit on taxes.

In this podcast episode, I discuss why you should be focusing on negotiating your equity compensation instead of your salary, especially earlier in your career.

Equity ownership is the surest path to wealth. If you're going to work your butt off for a company, make sure you strive to get your fair share.

If you end up receiving a windfall from your equity compensation, it can set you up for the rest of your life on the path to financial independence.

In this podcast episode, I discuss if you should factor in not yet vested employee equity compensation (whether RSUs or Stock Options) in your overall asset allocation.

I also discuss ways to determine what percentage of your net worth you should feel comfortable owning in a single asset (in this case, your company's stock).

If you've won the game, why are you still playing?

In this podcast episode, I break down what an 83(b) election is and why employees of startups should consider filing one.

I also explain situations when filing an 83(b) election may not make sense.

In this podcast episode, I explain why Restricted Stock Units (RSUs) are preferable to stock options as equity compensation.

I also break down a common misconception about how RSUs are taxed.

In this podcast episode, I break down why you should be maxing a Backdoor Roth IRA in addition to your 401(k).

In this podcast episode, I discuss my views on the rise of Dogecoin and if "funny money" has a place in financial planning.

If you're serious about financial planning to achieve financial independence, you should have rules in place that limit speculative urges that may distract from the long-term sustainable plan.

In this podcast episode, I share my thoughts around financial independence vs. generational wealth.

The path to financial independence starts with building the right habits.

The path to generational wealth starts with owning equity in a private company that IPOs during a raging bull market.

In this podcast episode, I revisit the math behind housing as an investment.

I also explain why we have no choice but to accept risk in investing in stocks.

"Housing isn’t a great investment, but for most people, it’s the best investment they will ever make because it’s the only asset they will leave alone and let compound for 10, 20, 30 years."

What appears risky in the short term isn't risky in the long run and what appears safe in the short term isn't safe in the long run.

In this podcast episode, I share why you should start financial planning before you think you're ready.

We underestimate the outcomes we can achieve by building the right financial planning habits early.

#DoMoreWithYourMoney

In today's podcast, I explain the main components of cash flow, including: * The different components that influence your cash flow * How to think about projecting and tracking your cash flow * Ideas for creating a hierarchy within your cash flow

Cash flow is the most important aspect of financial planning because it is one of the only factors we have control over.

The earlier you can learn how to master cash flow, the better equipped you will be to plan for financial independence.

In this Do More With Your Money podcast episode, I discuss:

How you should think about making financial decisions based on the tax implications.

The difference between short-term and long-term capital gains taxes.

Scenarios where you want to plan first and optimize for taxes second.

No one likes to pay more taxes than is necessary! However, you should avoid making financial decisions just because it may increase your tax liability in the short-term.

Generally speaking, you want to have a plan in place first and optimize tax efficiency.

Tax rates will likely be going up in 2022.

In this podcast episode, I share four tax planning tips to consider for 2021 in anticipation of increasing rates.

Disclaimer: This podcast is not intended to be tax advice, and you should consult with your tax professional regarding your particular situation before considering any of the tips discussed.

Today I'm going to share with you the number one element in making work optional.

The path to both building and maintaining financial independence is built on this crucial concept.

The earlier you can master it and build it into your financial habits, the sooner you can build towards a work optional lifestyle.

On this Do More With Your Money podcast episode, I discuss if you should be worried that the stock market is in an 'epic' bubble.

Whenever someone claims a stock market bubble or bottom, it's crucial that you take it with a grain of salt and always defer to your personal financial plan.

Remember always to consider the incentives of the person making strong claims about where the market is headed. We live in a world of clickbait and soundbites used to gain our attention to push us towards products and services.

When you understand your personal financial situation and what's in your control, you should invest with confidence regardless of outside noise.

Always maintain the perspective of the big picture. Major stock market corrections and bear markets allow you to accumulate wealth during your prime earning years.

As always, the key is that you’re able to maintain discipline within your financial plan in any market or economic environment.

Let’s get it out of the way and start with the disclaimer that personal finance is always personal and that this isn’t advice.

In this post, I’ll explain how I think about and manage my personal finances based on where I’m currently at in life.

While some principles can be applied to any life stage, I’m sure how I think about money for my personal situation will change over time. And I’m sure yours will as well.

Everyone’s personal finances start with understanding cash flow. You need to understand how much you’re spending and be able to review whenever you need to.

I use Mint and Right Capital for tracking my personal spending. I use QuickBooks Self-Employed for tracking the cash flow of my financial planning firm, Modern Wealth Builders.

It’s not necessary whatsoever, but I review my cash flow daily . Re-categorizing any transactions within Mint, Right Capital, and QuickBooks that don’t have pre-determined rules or are miscategorized.

Being on top of reviewing transactions helps with:

Immediately identifying fraudulent purchases.
Maintaining consciousness of spending decisions.
Incentivizing yourself to spend with intention.

I regularly audit my spending decisions to ask myself, “do I value this purchase”.

I use my credit cards for all purchases (that can be charged via credit card) for the following reasons:

It keeps all transactions electronic and trackable.
It adds a layer of security as opposed to a debit card.
It allows me to maximize cashback rewards.

I don’t get caught up in maximizing specific cashback rewards (it doesn’t really move the needle), but I do think it’s important to get at least the standard 1% back on all purchases.

Part of the reason I am so on top of tracking cash flow is that I get paid primarily quarterly. As you might imagine, I want to budget properly for expenses, taxes, and ideally investment contributions.

Understanding cash flow helps to determine how much cash to keep on reserve. Because I’m self-employed and somewhat risk-averse, I tend to keep more cash on hand than I probably need.

I prefer to have twelve months of living + business expenses in cash at all times.

While this may not be the “smartest” mathematical decision from a financial planning perspective, it does give me the following:

Peace of mind
Flexibility in drastic economic environments
Leverage to quote my value as a solopreneur

A strong cash reserve gives me a “hidden return” by enabling me to be aggressive in other aspects of my financial life.

Additionally, it allows me to maintain my investment allocation across my various retirement accounts. Let’s talk about my personal investment philosophy.

The vast majority of my investments are held in a combination of six ETFs. My primary concern always starts with asset allocation and asset location, as I believe most returns (net of fees and taxes) can be attributed to these factors.

The six ETFs cover the following:

US Equity
International Equity (developed and emerging)
Domestic and International Fixed Income

I keep it as simple as possible and allocate based on market cap, while being mindful of asset location. For example, keeping the asset classes with higher expected returns (long term) in Roth accounts, and keeping less tax-efficient investments (fixed income) in pre-tax accounts.

Rebalancing occurs automatically based on pre-determined rules for drift.

Each tax year, I take full advantage of the tax-preferential accounts at my disposal. This currently includes a SEP IRA, Roth IRA, and Health Savings Account (HSA). I anticipate I’ll be changing from a SEP IRA to a Solo 401(k) and taking advantage of backdoor Roth IRA contributions soon.

At this point, I’m not currently investing in any taxable accounts as I need the cash reinvest in MWB.

The way I look at it, once you’ve maxed your available tax-preferential accounts in a given tax year, that’s when the fun starts for determining the best use of your money.

When you’re investing in a strategic bundle of ETFs globally diversified, you know (generally) the ceiling on expected returns. There’s nothing wrong with this ceiling (when compounded over time), but if you want to achieve higher returns with your money, you usually need to take matters into your own hands.

Invest for beta. Earn for alpha.

Let’s get it out of the way and start with the disclaimer that personal finance is always personal and that this isn’t advice.

In this post, I’ll explain how I think about and manage my personal finances based on where I’m currently at in life.

While some principles can be applied to any life stage, I’m sure how I think about money for my personal situation will change over time. And I’m sure yours will as well.

Everyone’s personal finances start with understanding cash flow. You need to understand how much you’re spending and be able to review whenever you need to.

I use Mint and Right Capital for tracking my personal spending. I use QuickBooks Self-Employed for tracking the cash flow of my financial planning firm, Modern Wealth Builders.

It’s not necessary whatsoever, but I review my cash flow daily . Re-categorizing any transactions within Mint, Right Capital, and QuickBooks that don’t have pre-determined rules or are miscategorized.

Being on top of reviewing transactions helps with:

Immediately identifying fraudulent purchases.
Maintaining consciousness of spending decisions.
Incentivizing yourself to spend with intention.

I regularly audit my spending decisions to ask myself, “do I value this purchase”.

I use my credit cards for all purchases (that can be charged via credit card) for the following reasons:

It keeps all transactions electronic and trackable.
It adds a layer of security as opposed to a debit card.
It allows me to maximize cashback rewards.

I don’t get caught up in maximizing specific cashback rewards (it doesn’t really move the needle), but I do think it’s important to get at least the standard 1% back on all purchases.

Part of the reason I am so on top of tracking cash flow is that I get paid primarily quarterly. As you might imagine, I want to budget properly for expenses, taxes, and ideally investment contributions.

Understanding cash flow helps to determine how much cash to keep on reserve. Because I’m self-employed and somewhat risk-averse, I tend to keep more cash on hand than I probably need.

I prefer to have twelve months of living + business expenses in cash at all times.

While this may not be the “smartest” mathematical decision from a financial planning perspective, it does give me the following:

Peace of mind
Flexibility in drastic economic environments
Leverage to quote my value as a solopreneur

A strong cash reserve gives me a “hidden return” by enabling me to be aggressive in other aspects of my financial life.

Additionally, it allows me to maintain my investment allocation across my various retirement accounts. Let’s talk about my personal investment philosophy.

The vast majority of my investments are held in a combination of six ETFs. My primary concern always starts with asset allocation and asset location, as I believe most returns (net of fees and taxes) can be attributed to these factors.

The six ETFs cover the following:

US Equity
International Equity (developed and emerging)
Domestic and International Fixed Income

I keep it as simple as possible and allocate based on market cap, while being mindful of asset location. For example, keeping the asset classes with higher expected returns (long term) in Roth accounts, and keeping less tax-efficient investments (fixed income) in pre-tax accounts.

Rebalancing occurs automatically based on pre-determined rules for drift.

Each tax year, I take full advantage of the tax-preferential accounts at my disposal. This currently includes a SEP IRA, Roth IRA, and Health Savings Account (HSA). I anticipate I’ll be changing from a SEP IRA to a Solo 401(k) and taking advantage of backdoor Roth IRA contributions soon.

At this point, I’m not currently investing in any taxable accounts as I need the cash reinvest in MWB.

The way I look at it, once you’ve maxed your available tax-preferential accounts in a given tax year, that’s when the fun starts for determining the best use of your money.

When you’re investing in a strategic bundle of ETFs globally diversified, you know (generally) the ceiling on expected returns. There’s nothing wrong with this ceiling (when compounded over time), but if you want to achieve higher returns with your money, you usually need to take matters into your own hands.

Invest for beta. Earn for alpha.

"I have money going to my savings account each paycheck that I don't know what I should be doing with; what should I be doing with it?"

Let's start with the ever-important caveat that personal finance is personal, and as always, "it depends."

With that out of the way, let's talk about some ideas, habits, and strategies you should be thinking about if you feel like you're sitting on too much cash.

It may seem trivial at this point but having a sizable cash reserve is crucial for many reasons, some of which provide a "hidden return" like having the flexibility to search for better job opportunities or be more selective with investment opportunities.

At a minimum, you should have at least three months worth of living expenses in cash at all times. This should range as far as eighteen months of cash reserve depending on a variety of factors such as if you're self-employed, how economically sensitive your job is, or how many income sources you have in your household.

Personally, I strive to have twelve months' worth of living expenses in cash as it provides me the peace of mind to run my business and invest (in personal investment accounts) long term with confidence.

If you're still working towards building towards your ideal cash reserve, don't feel bad about not investing additional cash flow. The opportunity cost of building a sizable cash reserve is well worth the peace of mind.

When you're determining your ideal cash reserve, you can base it on your baseline spending needs or what you're currently spending. The lower your baseline spending needs, the lower your cash reserve can be, and in turn, the more cash flow you can use to grow your net worth on an ongoing basis.

If you've determined you're "sitting on too much cash" relative to your cash reserve requirements, here are some things to consider:

Are there any major short-term expenses or purchases you anticipate to have in the next 6-18 months? Generally speaking, you want to avoid investing in the stock market for any money that will be needed within the next three years (ideally five years +). However, if you have a sizable cash reserve, stable income, and a high tolerance for risk, there is some flexibility.

If you don't anticipate having any major short-term purchases and are looking to maximize the value of your hard-earned money to grow your net worth, here are some ideas:

Are you maxing out your 401(k) at work? You can contribute up to $19,500 (under age 50) in employee contributions for 2020 and 2021. Why would you want to contribute more to your 401(k) than is necessary to receive your employer match? Because contributions to a Traditional 401(k) reduce your taxable income and can be invested to grow tax-deferred until you need to pull them out after age 59 1/2. If your employer offers Roth 401(k) contributions, you should strongly consider taking advantage of these "after-tax" contributions (no income tax deduction) to increase your tax-free investment assets.

In addition to maxing out your 401(k) at work, you should also be taking advantage of an individual retirement account (IRA). You can contribute up to $6,000 (under age 50) for 2020 and 2021 and receive the same tax-deferred benefits as investing in your 401(k). However, if your income (MAGI) exceeds ~$124,000 (2020), you'll want to consider a backdoor Roth IRA.

Does your employer offer a Health Savings Account? You'll need to have chosen the "high deductible" plan to take advantage of the account. HSA contributions are a no-brainer as they provide a potential "triple tax-free" benefit. Contributions to the account reduce your taxable income, can be invested with tax-deferred growth, and if used for a qualified medical expense, can be distributed tax-free Additionally, if the money can be drawn penalty-free after age 65 for any reason. An extremely tax flexible account to take advantage of if you have access!

If you're taking advantage of all your tax preferential accounts and still have additional cash flow, you should consider investing in a taxable brokerage account. The specific investment selection should align with your overall investment strategy. Meaning, you should invest in a taxable account that factors in your investment holdings across your various retirement accounts.

A taxable account is more flexible in that you always have access to the money penalty-free. However, unlike a retirement account, you'll be subject to taxes. Consider holding most of your equity allocation in your taxable account (as it grows in proportion to your other accounts) as stocks will have more tax flexibility with capital gains and/or tax-loss harvesting.

If you're sitting on too much cash, the most important thing is that you have a plan for how to maximize the use of additional cash on hand. Getting in the habit of investing regularly is the most important factor for achieving long-term financial success as it puts the odds in your favor.

Although cash is safe in the short-term, it becomes risky long-term as the purchasing power is eroded from inflation. Make sure you're doing all you can to preserve (and hopefully grow) your hard-earned wealth.

One of the biggest (if not the biggest) investments you can make is choosing a lifelong partner. You and your partner must be aware of each other's values, goals, and desires as it relates to your money. There is no perfect strategy when it comes to managing finances as a combined unit. However, you both must have at least a general understanding of each other's finances and long-term financial goals.

That way, you can avoid any unneeded stress or disagreement because you weren't on the same page. We can all benefit from having a professional, objective third-party who has our best interests at heart to bounce off ideas and provide us with guidance.

Here are four financial tips for newly married couples:

1) Your income is now taxed as a joint singular entity, so make sure to maximize it.

Before you're married, you pay taxes separately. Depending on your respective income level, filing jointly may benefit you or cause you to pay additional taxes.

If one person in the household is the primary earner, then filing jointly will most likely provide you a tax benefit due to the larger bands in the marginal tax bracket.

Regardless, it would be best if you worked together to maximize the efficiency of your combined income. If you view your income as combined, you should work together to make sure both of you max out your retirement accounts or additional tax preferential accounts.

If one spouse's income is substantially lower, it may not be easy to maximize a tax-deferred account like a 401(k) without the higher-earning spouse supplementing their spending needs. These strategies depend on your specific needs and how much cash flow you have to dedicate to discretionary investment contributions.

However, if done correctly, you can substantially increase the efficiency of your after-tax joint income.

2) Have a joint checking account and joint credit card for joint expenses.

There's no "correct" way to approach spending as a couple. The most important thing is that it works for you, and no one is resentful about how expenses are paid. A strategy I've seen work for various couples is maintaining a "his and hers" spending approach with a joint checking and credit card for joint expenses. In certain cases, it may make sense to consider a "pro-rata" approach where the higher-earning spouse pays a higher proportion of the fixed expenses.

Again, the most important thing is that you and your partner agree on the approach you'd like to take. As long as both spouses are comfortable with the level of ongoing saving (preferably investing), no one should be concerned with the other partners spending.

3) Discuss your individual and joint financial goals.

You may be surprised to learn how different your partner's individual financial goals are. How important is achieving financial independence to you vs. your partner? Do you want to fund your child's education savings fully, or do you want them to have "skin in the game"? Our personal experiences with money have a massive impact on how we view the world. Your partner may have had a substantially different experience with money growing up, which will influence their individual goals and preferences.

Again, communication (ideally with an objective, third-party professional) is essential for getting on the same page about what financial and lifestyle goals you'd like to work towards together.

4) Have a combined investment strategy that factors in each other's tolerance for risk.

Like your income, your investments should be viewed as one unit for all intents and purposes. It's important that you both have a general understanding of your investments, what you own, and why you own it. Your long term financial plan should influence how your investments are structured. Ideally, you'll factor in your combined tolerance to accept the risk needed to achieve your financial goals. If one partner substantially deviates from the investment strategy, it can have a large negative impact on your combined finances.

Again, communication (ideally with an objective, third-party professional) is essential for getting on the same page about the appropriate investment strategy to achieve your desired financial outcomes.

One of the most common windfalls of wealth can come from employee equity compensation. Often, this happens when you’ve worked at a private company that experiences an Initial Public Offering (IPO), and the share price appreciates dramatically once it enters the publically traded market. However, you can also experience a windfall with a publically traded stock that experiences a dramatic rise causing your stock options (or equity position) to represent a large portion of your investment assets.

You can analyze many factors in whether or not to diversify your stock position. I’ll be primarily discussing incentive stock options (ISOs), but many factors for determining diversifying can apply to any concentrated stock position.

The overall message you should remind yourself is that “concentration builds wealth and diversification maintains wealth.” The decision to diversify should be based on your long term financial plan. Let’s discuss it!

You have limited energy. You have limited time. If you want to achieve progression in anything, you have to give it your best effort.

However, giving your best effort isn't always enough. You need to focus your limited energy on high leverage tasks and avoid shiny objects.

In this podcast episode, I discuss examples of focusing on tasks that amplify outcomes and propel progression.

Whether it's your personal finances, career progression, or taking back your time, these principles can be applied to your situation.

Are you self-employed or a small business owner looking to reduce taxes and invest in your financial future?

In this podcast episode, I break down the different types of investment accounts you should be thinking about establishing.

The primary accounts discussed are the SEP-IRA, Solo 401(k), and Traditional 401(k).

Depending on if you have employees (and how many) is a significant factor when deciding which account to use.

The SEP-IRA is the easiest and most cost-effective (from an administrative standpoint) to establish. However, if you have more than a few employees, the matching requirement can quickly become expensive.

In which case, considering the 401(k) could make more sense. The great thing about the current small business 401(k) landscape is that there are more low-cost third-party solutions than ever before.

If you're not currently deferring taxes and investing for your financial success outside of your self-employment or business, you'll want to give this episode a listen!

Financial planning is a relatively new profession that can take on a variety of meanings.

The term "financial planning" is also often abused by corporations as a means to sell expensive financial products.

In this podcast episode, I discuss what financial planning means to me, and ultimately, what the end goal is.

Financial planning is advice-centric, meaning it's about providing recommendations unique to your situation and long term goals.

Financial planning is the use of technical knowledge to maximize your financial resources to create the life you want.

Creating the life you want could mean:

Buying back your time (financial independence)
Taking care of the people you care about
Material Items (Cars, Houses, etc.)
Leaving a legacy

Since we don't know what the future holds, financial planning is about putting you in a position to accomplish your goals regardless of future market returns, tax rates, economic environments, and things we have zero control over.

By making strategic decisions and keeping realistic assumptions, we can put the odds of success in our favor!

There's no shame in having some unavoidable debt in your 20s and 30s.

However, it's CRUCIAL to build a financial foundation of strong personal finance habits in order to advance to the next step of your financial life -- wealth accumulation.

Until you have an understanding of the resources you're working with, it's hard to make decisions on how to maximize the free cash flow you have to pay down debt and ultimately, grow your net worth.

In this podcast episode, I discuss the pros and cons of investing versus paying down debt.

This includes different debt repayment approaches such as "Snowball" versus "Avalanche".

Although one may be more "mathematically" advantageous, the other provides the behavioral momentum to keep you on track towards progress.

I also discuss investing in the stock market and how that isn't necessarily the right thing to do when you're building your financial foundation.

The market will still be around when you're ready to start aggressively investing on an ongoing basis.

Best to develop valuable personal finance micro habits in the beginning!

That way, you'll be better equipped to avoid lifestyle inflation when your income inevitably increases!

P.S. don't forget to connect with me on twitter @TJvanGerven

It's standard for beneficiaries of a trust to not have access to the funds until a certain age (age 35 is common).

Because assets held within an irrevocable trust are taxed at higher rates, there can be a lot of planning opportunities to maximize that money (if you're being responsible).

The first step is to review the trust documents and see what the stipulations are for the intended use of the money.

From there, you can work with the trustees depending on if they can make discretionary distributions.

In this podcast episode, I discuss some different ideas for making the most of that money, including filling up more tax-efficient accounts, paying down high-interest rate debt, and even funding a business endeavor.

I also discuss how you (ideally) want to make sure the trust is invested appropriately for your long term goals and needs.

Day trading is nothing new. Whenever financial markets start to get extraordinarily volatile you tend to see an increase in the number of new day traders enter the market.

Add in the element of sports gambling being diminished (due to the pandemic), and you get a recipe for increased speculation from those looking to make quick gains.

In this podcast episode, I talk about the difference between entertainers and those providing real practical financial advice AND why it's important to keep the proper perspective when making investment decisions.

Keeping the proper perspective is crucial to avoiding the BIG mistake, and ultimately, continuing to build on good financial habits.

Connect with T.J. on Twitter: https://twitter.com/TJvanGerven

To learn more about working with T.J. head to https://www.modernwealthbuilders.com/

No pain, no premium.

The unfortunate reality is that to benefit from the returns of financial markets (especially the stock market) we have to be willing to accept the inevitable risk of short term declines.

Declines and periods of volatility happen regularly and are a normal part of investing.

The ups and downs can go on for weeks and months, which can be psychologically taxing, even when it’s a normal part of the market cycle.

The best thing you can do is to develop a plan AHEAD of time and then remain disciplined.

Why?

Because panic-driven reactions don’t lead to smart investing decisions.

The biggest mistake investors can make is not having a plan ahead of time and/or not remaining disciplined.

Tune into this week's episode for my complete thoughts on dealing with market corrections.

In this podcast episode, I discuss the framework for deciding how aggressive to be with employer equity compensation.

Equity compensation discussed includes Options (at-the-money vs out-of-the-money) vs Restricted Stock Units (RSUs).

In situations where there is a vesting schedule (over a 3,4,5 year period), it almost always makes sense to take the equity compensation (vs cash).

However, I also discuss situations where taking cash would make sense based on personal financial circumstances.

Equity compensation is an amazing opportunity to concentrate and grow your wealth. You just want to make sure you have a plan in place to minimize the tax ramifications and diversify in the long term once you've built your foundation for financial independence.

The fear of missing out (aka FOMO) is one of the strongest forces that can affect investment decisions.

The best investors are comfortable with accepting FOMO and staying in their lane (focusing on their individual race).

It can be difficult to not let "water cooler talk" affect our investment decisions when we hear about what our peers are doing.

In this podcast episode, I share my thoughts around dealing with investment FOMO.

Concentration gets you rich, diversification keeps you rich.

If you're winning YOUR race to achieving YOUR financial goals, it shouldn't matter what anyone else (or any other individual stock) is doing.

The real opportunity cost should be, "can I still achieve my financial goals" and "does this strategy increase or decrease my odds of success".

I hope you enjoy the episode!

In this podcast episode, I discuss the three "mainstream" investing styles for the Mainstreet investor.

Active vs. Passive vs. Factor Investing

On this guest podcast episode, José Hernandez aka The Millennial Money Mentor (as he goes by on Instagram) joins me to talk about the future of financial education and personal branding.

In this episode, we discuss José's journey of navigating some of the pitfalls of corporate wealth management while trying to build a platform focused on educating the next generation of investors.

If you've ever come across José on Instagram (@themillennialmoneymentor) you'll find he puts out a massive amount of valuable content focused on educating millennials on personal finance and investment concepts.

I appreciate José's candor and straightforward approach. It's refreshing to follow someone who has had real-world experience in the day to day operations of wealth management.

Don't hesitate to reach out to José directly via Instagram (@themillennialmoneymentor) as he's always willing to share ideas and engage!

In this podcast episode, I discuss the basics of determining business valuations and why it's crucial to build something outside of your primary business.

While we have more control over our personal businesses, it's never a good idea to become dependent on it as our main asset when we're ready to retire.

The goal should be to take advantage of tax-preferred accounts along the way while building a diversified investment portfolio outside of our business.

Especially when we've reached capacity in our business and are not looking to grow it further. Not every business is scalable!

Tune in to get my complete thoughts on the pitfalls of becoming overly dependent on the equity in your business and the basics of determining what your business may be worth.

It's easy to take for granted being healthy and how incredibly valuable that is.

When we look at our personal financial balance sheet we SHOULD take into account our health because that is an ASSET.

This past weekend I was reminded of this when I suffered a knee injury that still leaves me unable to walk.

When your health is compromised nothing else matters.

It puts into perspective what real problems are and how lucky we are when we're healthy.

In this podcast episode, I discuss why "health is wealth".

I also discuss why planning for unexpected health costs is especially crucial for self-employed individuals with high deductible health plans.

If you're healthy, you're wealthy.

Have you taken full advantage of your tax-deferred accounts such as workplace and/or individual retirement accounts?

Each year we have a limit on our tax-advantaged accounts, so it's best practice to create a hierarchy for how we use our money.

In this podcast episode, I discuss some year-end planning ideas for maximizing your hard-earned money.

While these considerations depend on your individual situation, there is a general philosophy for creating a hierarchy to be efficient with your money.

Take advantage of the short-term, so that the long-term takes care of itself.

I hope you enjoy the episode!

Theodore J. van Gerven, CFP®

Modern Wealth Builders, LLC

In this podcast episode, I discuss the pros and cons of two common retirement plans for small business owners.

If you're a small business owner who has been considering adding a business retirement plan to help fund your retirement and reward your employees this is a great resource for getting started!

It's never been easier to start saving for your financial future outside of your business. Don't miss taking advantage of these awesome benefits at your disposal.

Tune into to hear my complete thoughts on the SEP-IRA versus 401(k) for Small Business Owners.

Gratefully,

T.J. van Gerven, CFP®

Fee-Only Financial Planner | Investment Advisor

Host of Do More With Your Money Podcast

modernwealthbuilders.com

Twitter: @Tjvangerven

It's easy to forget that the concept of 'retirement' is very new relative to the history of human societies. It's only in the last ~100 years that life expectancies, technology, and human productivity have reached a point that allows us the opportunity to stop working.

In this podcast episode, I discuss how the burden of retirement has been switched from the employer to the employee.

This change from defined benefit plans (pensions) to defined contributions plans (401(k)'s, etc.) increased the difficulty of planning for retirement and replicating an income.

The complexity of retirement planning will only continue to increase as our life expectancies increases.

Traditional 'retirement' may look very different by the time Gen X and Y are ready to stop working.

Tune into to hear my complete thoughts on the past, present, and future of retirement!

Gratefully,

T.J. van Gerven, CFP®

Fee-Only Financial Planner | Investment Advisor

Host of Do More With Your Money Podcast

modernwealthbuilders.com

Twitter: @Tjvangerven

Incentive Stock Options (ISOs) are one of the most complicated forms of employer stock compensation.

In this podcast episode, I discuss the basics of ISOs, how they function from a tax perspective and some major pitfalls to be aware of.

I also discuss the fear of missing out (FOMO) as it relates to owning employer stock (or any concentrated position for that matter), and why I'm a fan of regret minimization.

ISO compensation is one of the most common windfalls I see. Especially, when you're compensated from a private company that goes public, there's the potential to become an 'overnight millionaire'.

If you experience that 'pop', I discuss different ways to approach diversifying depending on your short and long term goals.

I hope you enjoy the episode!

Gratefully, Theodore J. van Gerven, CFP®   Fee-Only Financial Planner Modern Wealth Builders, LLC TJ@modernwealthbuilders.com      modernwealthbuilders.com

At what point in your business's lifecycle are you? Are you at the point where reinvesting in your business (increasing employees, equipment, etc.) provides diminishing profit returns? If so, consider creating a financial fortress outside of your business so that you are NOT dependent on your business to supplement your lifestyle.

When you create a business, it's your baby (I get it). It's easy to get sucked into your business and reinvest 100% of every dollar you generate to grow your business. And if you're creating a scalable product or service, maybe that's the right decision (personal finance rules don't apply to entrepreneurs). However, if you hit a wall (cannot scale further) or are at a point where you are paying yourself an amount that you're happy with, consider fortifying your personal finances.

In this podcast episode, I discuss some of the pitfalls of becoming overly dependent on your primary business. Especially businesses where there may be little (or no) market value if you were to sell the business, why it's important to fortify your personal finances sooner rather than later.

Are you interested in planning for your child's education savings? Then this podcast episode is for you!

In this episode, I discuss the different ways to save for your child's education. Including the benefits of education savings accounts, such as a 529 plan, which has tax benefits when used for qualified expenses.

I also discuss the basics of planning for potential financial aid. It's important to not trigger unnecessary taxes during the lookback period for the expected family contribution (what is used for financial aid calculation).

This episode is a framework for the basics of education planning and will vary drastically depending on your unique goals and how far away your child is from needing their education savings.

As with any financial goal, the earlier you start the better! When it comes to education savings, there ARE ways to lessen the burden!

Be sure to stay tuned in until the end where I share my personal opinion on the return on investment as it relates to higher education.

In this podcast episode, I discuss my biggest takeaways of starting a service-based business.

No matter how good your product or service is, there will inevitably be randomness that is out of your control (whether good or bad). Give yourself less credit when things are going well, and less blame when things aren’t. These things tend to even out over time, as long as you’re being consistent, it should come together.

For anyone interested in content marketing or working in a business where 'YOU are the product' this episode should be of value to you!

Being mindful of excess with our spending and minimizing outflow is GOOD. Being intentional with our spending to bring us optimal excitement, happiness, and utility (in the present) is BETTER.

In this podcast episode, I share my thoughts on how to spend money more intentionally. I also discuss how our personal frugality lens is HEAVILY influenced by our upbringing.

Conventional wisdom has told us that renting is 'throwing away money'. However, when we take a deeper dive into the recurring costs associated with owning a home, you can quickly see the renting versus buying decision becomes much more complicated.

In this episode, I discuss the different costs associated with owning a primary residence.

Especially for the first time homebuyer, it's crucial to understand when buying can make sense and when it may not be a desirable return on investment.

Ultimately, you cannot make a blanket statement about real estate as an INVESTMENT. I caution you to consider it a lifestyle asset that retains its value.

Being cognizant of the small purchases in life and how they can lead to wasting substantial sums of money is important. However, to achieve meaningful wealth I don't believe the "latte factor" is ultimately going to move the needle.

The major purchases in life such as a car, home, and education have opportunity costs that are worth a lifetime of latte purchases. So while I respect the principles of the latte factor, I don't like the hyperbolic examples used by personal finance 'gurus' to draw attention to unrealistic examples.

Concentration gets you rich, diversification keeps you rich.

With that being said, it’s important to clarify the difference between investing in publicly traded financial markets versus an entrepreneur who is investing in a business they have a material involvement in. When I talk about the benefits of diversification I’m talking SOLELY about investing in financial markets, because successful entrepreneurs DO play by a different set of rules.

To learn more head to --> modernwealthbuilders.com