Working in the tech industry is an exciting ride. You’re at the forefront of tech and societal change, you’re earning a comfortable salary, and you’re developing skills that are constantly becoming more and more in demand.
There’s only one problem:
When you’re a high earner in a quickly growing field, something like financial planning can easily fall by the wayside. It’s easy to feel like the boom years will never end — because let’s face it, over the last decade, they haven’t.
While tech certainly isn’t going anywhere, that’s no excuse for poor financial planning!
Your finances are the one area of your life that you can’t afford to ignore, no matter how much money you’re making.
If you haven’t yet sought out the advice of an advisor, you might be surprised by how much one can help navigate your unique financial needs. To give you an idea of what you’re missing, here are a few things that you could gain from financial planning advice.
Formulate a Worst-Case Plan
As a high-income earner, you should have a clear idea of where your money goes if something happens to you or your income.
A financial planner can help you secure life insurance and create a will in the event of your untimely passing. Additionally, they can help you build up cash reserves in the event you lose your job or are faced with a pay reduction. Again, it may seem like the sun will never set on your good times, but you should be prepared in case it ever does.
Learn How to Invest
Tech employees are generally interested in the inner workings of things — and their finances are no different. In my experience, the most common questions that I hear from clients working in the tech sector are around investing — particularly about knowing how to maximize their stock options.
Due to its increased popularity, many tech employees rely on financial advisors to help them understand, manage, and factor stock options into their overall financial plan.
A good financial advisor will be able to explain their investing process in detail, without using lofty terms or industry jargon. More importantly, they will be a teacher, helping you learn how to not just manage, but grow your portfolio.
Make Sense of Taxes
The tech industry is known for excellent compensation, which, independent of other variables, is a great thing. The problem: one of those other (inevitable) variables are taxes.
If you can find a financial advisor that is well versed in tax issues related to the tech sector, that’s great news. If not, at a minimum find one that has relationships with CPAs specializing in helping shield tech workers from as much tax liability as legally possible.
Find a Planner That Works For You
You have a lot of options on how and when you work with an advisor. For example, a fee-only advisor is someone who makes money based on the services they provide you. They don’t earn commissions on any financial product sales. These advisors will charge you upfront for their time and services, but you’re not going to be dodging calls for their expensive products or the next “big idea”.
You can also get an advisor on a retainer, paying an upfront fee and having access to them whenever you happen to have a question. In addition, you can use both a financial advisor and an app to address your financial needs.
Find the road that feels the most comfortable for you and provides the best return on your time and money.
Earning a lot of money is just the first step in becoming financially stable. But, of course, money is a long-term game and you have to take care of it for a while before it will begin taking care of you.
Tech is a fast-paced industry. It can take serious determination to pull your attention from the tech world to focus on your finances, but it’s one of the best things you’ll ever do for yourself.
Ignoring money generally doesn’t go well for people, even if you’ve got a lot of it!