The 5 Biggest Financial Planning Mistakes Made by Tech Professionals | Mistake #3

The 5 Biggest Financial Planning Mistakes Made by Tech Professionals | Mistake #3

 

I love working with the tech community. I started my career at Microsoft and have since been inspired by the creative and innovative minds of folks working at tech companies large and small. I also enjoy working with tech employees, because as a personal finance nerd, I get to help people navigate the plethora of benefits available that are often only available at tech companies. Between RSUs, ESPP, Non-Qualified or Incentive Stock Options, Mega Backdoor Roth 401(k)s, Deferred Compensation, Legal Services, and even Pet Insurance, it is the benefits equivalent of picking from a menu of a Michelin three-star-rated restaurant.

 

Through my own experience as a tech employee and my experiences now as an advisor working with tech professionals, I’ve identified some of the biggest financial planning mistakes that can hold the tech community back from achieving financial independence and success.

 

Mistake #3 – Burning Out

 

There has been a significant decline in Americans’ use of vacation time. Twenty years ago, the average American took almost three weeks of vacation per year. As of 2016, Americans average only about 16 days of vacation per year, almost a full week less. You might think that improvements in technology over this 20-year timeframe would allow us to be more productive and therefore take more time off. It seems that the curse of this increased productivity is a greater reluctance to disconnect from work and give ourselves the permission to unplug.

 

Taking more time off has a positive impact on your physical and mental wellbeing. For those that need more convincing to submit a PTO request, research has found that those who take vacations are more likely to get promoted than those who underutilize their available time off. Taking steps to prevent burnout can not only lengthen your career and make it more sustainable, but it can also get you an increase in title and a pay increase. If that isn’t a compelling argument for taking a vacation, then I don’t know what is. At Merriman, we want to help you achieve your definition of living fully, whether to you that means taking time off for an epic adventure or maybe you have a larger goal of making work optional. Whatever your goals, we’re here to help you!

 

Be sure to read our previous and upcoming blog posts for additional mistakes to avoid as a tech professional.

Disclosure: The material is presented solely for information purposes and has been gathered from sources believed to be reliable, however Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Merriman does not provide tax, legal or accounting advice, and nothing contained in these materials should be relied upon as such.

Wellness as a Financial Strategy

Wellness as a Financial Strategy

 

I work with clients to create plans for spending, saving, investment, taxes, insurance, estate, and all the other items that, if managed, can lead to financial security and peace of mind.  Often, after all the planning, I get the question: What else can I do to help my financial situation?  While a good plan can help mitigate the ups and downs of the markets and the economy, it still can lead many to feel like they have little control over their situation.  This question often stems from a sense of not feeling totally in control of your financial situation because of volatile markets, the economy—and recently, a global pandemic.

One area I have started to introduce to my clients as a financial strategy is to consider doing an evaluation and plan for their physical and mental health.  The estimated average healthcare costs for a couple in retirement is $285,000.  This figure can include Medicare supplement premiums, deductibles, drugs, co-pays, dental, vision, counseling, and other care services.  Over the past 30+ years as I have been working with clients, I have seen firsthand how these costs are becoming an increasing burden to retirees as inflation in the healthcare industry is very much outpacing increases in incomes.

For many, chronic conditions like high blood pressure, high cholesterol, diabetes, obesity, heart disease, and auto-immune diseases are a big burden physically, mentally, and financially.  My story was typical of a lot of people I see.  Busy family life, high pressure jobs, and the stresses of life slowly add up.  Late in my 40’s, I was diagnosed with high blood pressure and started taking medication.  I thought I was in pretty good shape and didn’t give it much thought as my mom had high blood pressure all her adult life, and I thought it was hereditary.  As I got into my 50’s, my cholesterol and triglycerides started steadily increasing to unhealthy levels.  Like many, I ignored the slow decay of my physical and mental health.  Denial was strong.  I would get flashes of trying to stem the aging “tide” but would eventually fall back to poor exercise and eating habits.  There were always more important things to do than focusing on my health. Between feeling the aches and pains of nearing 60 years old and waking up to the knowledge of the effect my health would have on my retirement finances, I became acutely aware that I needed to seriously focus on my health.  My motivation of wanting to feel better physically and mentally was boosted by the fact that I wanted to use my retirement savings for better things than healthcare costs.

In late 2018, I got to work.  First, I did an inventory of my state of health.  To do this, I consulted with professionals, gathered tools and health data, and did a deep dive into educating myself about nutrition and mental wellness.  I also examined my consumption of food and alcohol, my utilization of exercise, and my stress levels and other facets of improving my emotional health.  Second, I set aside feelings of ego, guilt, and pride to create a realistic road map to improving my health.  One of the main things I learned right away is that there is no quick fix.  To reverse years of poor habits and choices, it takes a long period of time.  It definitely is a marathon and not a sprint, as to do it the right way involves lifestyle changes and not diets or boot camps.  

I’m eating less with mostly plant-based meals, exercising consistently, and addressing the stresses I face on many fronts.  It has been fabulous!  My energy levels are much higher, and I have a much more positive attitude about life in general.  For many years, I felt anxious about the state of my physical and mental health and that I couldn’t get the motivation to execute a good personal healthcare plan with consistency.  I’m glad the added boost of seeing improved health as a financial strategy has motivated me to create and execute the beginnings of a sound personal health plan.

We all live with the genetic lottery, and predicting our future health is difficult, but it would be ridiculous for me not to do everything in my power to live healthily and potentially not spend my hard-earned money on healthcare.  I encourage everyone to create and execute a health and wellness plan to feel great physically and mentally.  It also is a good financial strategy.

Crafting A Family Legacy Letter

Crafting A Family Legacy Letter

 

As we’re experiencing such a strange and challenging time, many people find themselves wondering what their families did in the past to get through difficult economic times. We may remember little snippets of stories told by our elders or passed on through our family, but often wish we knew more.

As wealth advisors we know firsthand the importance of legacy planning through legal documents and also believe in the value of sharing the essence of who you are for future generations to come. In this document, we provide ideas on how to craft a Family Legacy Letter to share your life story, personal values, beliefs, and advice for future generations.

Now is a great time to pass on your values and share experiences with your heirs.

 

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