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Welcome to the FI Mastery Journey, a weekly newsletter where you receive actionable ideas from me to help tame financial chaos, get your financial house in order and live your legacy.
Here’s how it works: each week, you’ll receive one article written by me. You’ll also get three simple questions that go along with the week’s article to help jog your mind and inspire you to take small, bite-sized financial wellness actions.
And, you’ll also get an inside look at the research I’m reading.
Follow along for one year and you will have completed all the work necessary to keep your financial house in order.
My goal in all of this work?
To provide you with the tools, resources, and insights to help you take one step closer to becoming the master of your own financial independence journey.
This Week at a Glance
- We’re just weeks away from the start of the new year. Can you believe it? And before you get caught up in the hustle-and-bustle of the holiday season, be sure to check out a few last-minute planning topics as 2023 comes to a close. We highlight our top 3 below for tech professionals, but you can read all 20 of this year’s recommendations here.
- Risk assets are off to a rough start this week as bad news out of China has some investors worried about a potentially massive credit event from the world’s second-largest economy. Even so, US stocks are on track for one of their best months so far this year. Check out more at the Analysts Corner.
- ICYMI – I hope you and your friends and family had a (mostly) uneventful time together celebrating Thanksgiving last week. In last week’s post, I shared three things that I’m grateful for this year, especially at a time when the markets and economy seem to be headed in the right direction.
Year-End Financial Planning Checklist for 2023
The end of the year is upon us, and with it comes one last chance to get your financial ducks in a row before it ends up costing you.
You see, while many of us are focused on trimming trees, making last-minute gift purchases, and planning holiday parties, the truth is that all of us likely have that one item on our financial to-do list that we’ve been meaning to get to all year long.
And while it may seem like no big deal right now, failing to take care of just one year-end planning item that you’ve been putting off all year or simply aren’t aware of could end up costing you thousands of dollars over the near- or long-term.
And how’s that possible?
Well, imagine for a moment that you received stock options from your employer, but you haven’t paid attention to your vesting schedule.
Suddenly, a large portion of your award vests at a high market value, and come next April, you’re likely stuck with a hefty tax bill that you weren’t prepared for.
That’s why evaluating these scenarios would likely have given you time to properly disposition your ISOs or raise the cash necessary to cover your tax bill.
And even if your financial situation doesn’t involve the complexities of equity compensations, there are plenty of things to consider before the year comes to a close.
This approach involves reviewing things like your designated beneficiaries, assessing your cash management process, and even preparing for potential tax changes that could give you a leg up and save you some money as we enter the new year.
Either way, while this list may not be exhaustive, reviewing and taking care of just one item could save you time and money and get you started on the right foot in as we head into 2024.
Top 3 Financial Planning To-Dos Before Year-End (Link to All 20 Tips Below)
Now, if you’ve been following along this year, then you shouldn’t have a last-minute scramble. Even so, if you’re a high earning tech pro, here’s 3 things to consider in the next few weeks:
Tip #1: Manage Your Company Stock Concentration
Earlier this year we pointed out that having a large portion of your wealth in company stock poses a key risk to your life and financial goals.
That’s why now’s a good time to reassess this risk and make strategic adjustments.
And one way to figure out if you’re taking too much risk is to ask, “are holdings in my employer’s stock appropriately balanced, or am I overexposed to potential volatility and risk?”
Tip #2: Develop a Detailed Year-end Cash Flow Analysis
Getting a handle on your cash flows is crucial to making informed financial decisions.
That’s why reviewing your spending decisions at year-end can help you adjust your spending and savings strategy accordingly.
Here you’ll want to analyze income versus expenses to ensure you’re making decisions that align with your overall financial plan.
You can start by using a cash management tool or spreadsheet to identify areas where changes can be made to better align with your financial objectives.
Tip #3: Maximize Your Retirement Account Contributions
Finally, the end of the year is also your last chance to maximize retirement contributions for 2023.
This approach can allow you to reduce your taxable income and put your money to work sooner, rather than later.
Make sure to max out your retirement accounts, and explore post-tax 401k and IRA contributions, followed by Roth conversions.
Either way, check your contributions to see if they’re below limits. If there’s room, adjust your remaining contributions to reach the maximum.
And, if you haven’t followed along with us this year, head on over to the FI Mastery Journey to download our year-end planning checklist:
Review the 20-Item Year-End Planning Checklist Here >>>
What I’m Reading
We’re all busy in the daily rush of things. That’s why I’m sharing a list of articles that I’ve read this week to help me stay on top of my own financial independence journey.
You can gain access to all of these links here directly.
- It’s Giving Tuesday: Charity Strategies the Wealthy Can Apply
- 90/90 Minimalism Rule
- Everything You Can’t Predict.
- Tech Doesn’t Make Our Lives Easier. It Makes Them Faster
- The Key to Good Luck Is an Open Mind
- Are You Living Your Ideal Life?
- The Mansion Next Door
Thanks for taking a look,