Andrea and Mike were a power couple, both earning over six-figures working in technology, they had two perfect kids, ages 7 and 9, and they still found time to volunteer at a local soup kitchen! Hate them yet? :)

Andrea is an HR rockstar who has just been promoted to Senior Director at her company. Mike is a VP of Sales for a Software as a Service (SAAS) company. Andrea’s promotion means an increase in responsibility, more travel—and a large grant of RSUs (restricted-stock units) and non-qualified stock options. Mike has also received 40% of his compensation via ISOs (incentive stock options).

During our free consultation, Andrea and Mike asked us for investment advice.

How much of their stock should they keep? How much stock should they sell? Where should they invest the proceeds? 

But before we could answer that question, we asked them something that shifted the focus of the whole conversation:

What does your ideal lifestyle look like?

Andrea and Mike looked at one another and weren’t quite sure how to respond.

After a few minutes of discussion (and more questions), they decided that they wanted to use the “extra” money for college planning, buying a larger house, funding vacations, and building up their retirement savings. 

With an eye on all those goals, we determined that it would make sense for them to have a customized big-picture financial plan. Our senior wealth advisor Bob Gavlak, CFP® pulled it together for them, taking care to prioritize their savings and contributions to potentially lower their tax bill. Curious what that a customized financial plan might look like? You can see the sample plan here.

As we continued to ask questions about Mike and Andrea’s financial life...

We uncovered a little slip up.

Mike forgot to file his 83(b) election for his ISOs (which would have allowed him to pay his taxes in advance). Mike’s company is growing rapidly, and this 83(b) election would have allowed him to pay income taxes based on the lower grant price instead of the higher vested price.

Mike didn’t know he could exercise this option early. But Bob Gavlak, CFP® and David French, CPA recommended a strategy to start paying lower taxes right away. They showed Mike how to exercise this strategy up to his alternative minimum tax (AMT) level, so that he wouldn’t have to pay more in income taxes. This allowed Mike to get preferential tax treatment on a good chunk of his stock options—and save a lot on taxes in the long run.

And then, there was Andrea’s promotion and raise. When our team looked closely, they realized that the couple was now over-concentrated in US Growth stocks. So, we recommended a strategy to diversify into smaller (value-oriented) companies.

Once Andrea and Mike felt good about taxes, investments, and their big-picture financial plan, we casually asked them about their catastrophic coverage. We discovered that Mike and Andrea hadn’t revisited their life insurance since their kids were in diapers! Our resident insurance expert, Tim Power, analyzed their insurance policies and determined that they were underinsured by $1,500,000 each (even with their employers providing basic term life insurance coverage). We hope that Andrea and MIke never need to use these policies, but it’s comforting to know that the safety net is there for them and their kids. 

Isn’t it amazing how one seemingly simple question can lead to all this?

Imagine what we could uncover when you ask
that question you've been contemplating.