What can a comprehensive fiduciary wealth management firm do for you? Are you curious about what we, at RHS Financial, can do for you? This is for you.

At RHS Financial one of our core principles is constant self-improvement. Both as an organization and as individuals. The benefit of being an independent boutique wealth management firm is that there is no outside pressure to sell products. We get to serve our clients as fiduciaries and on our terms.

Our independence, smaller size, and boutique approach does not mean that we are unable to provide certain services or experiences to clients that you may come to expect from a large bank, brokerage firm, or RIA. We have worked tirelessly over the last fourteen years to make sure that this is not the case at RHS Financial.

We are confident that we serve all of our client’s stated needs, however, it is also very likely that a lot of our clients don’t quite know everything that we can do for them. That is why we decided to put together this overly comprehensive collection of short stories to help you brainstorm the next best way for us to help you. (These are real client cases with fake names and slightly fudged numbers. If you recognize your story thank you for letting us, make an impact on your life!) 

Additionally, HERE is a simple PDF to highlight our core services.

We are going to follow an easy-to-understand problem, solution, and outcome format. So read away!

P.S. If you are potentially considering working with us then you can schedule a quick intro call HERE.

Table of Contents

 

Equity Compensation Guidance

Proactive Tax Planning

Personalized and Sophisticated Investment Management

Real Estate Advice

Banking Services

Cash Management

Early/Retirement Planning

Cash Flow Analysis and Scenario Testing

Estate, Legacy, and Gifting

Charitable Guidance

Employer Benefits Planning

Insurance Planning

Concierge and Flexible Family Office

International Planning

Equity Compensation Guidance

 

Managing RSU taxes to avoid nasty surprises

Problem: Jeff is a senior product manager for AirBnB. He started at AirBnB a few months before the IPO. With the IPO now behind him he was coming up on his RSU grant cliff. A major payoff with a major tax bill. Jeff and his wife Jana wanted to find out how to prepare for this tax bill and avoid a nasty surprise.

Solution: Based on Jeff’s RSU compensation we knew there just wouldn’t be enough taxes withheld. If they didn’t prepare correctly next year’s tax bill would be a nightmare. To get Jeff and Jana in the right place we needed to do a few things. First, we put together a comprehensive financial plan for them with a focus on tax analysis. Compiling all their sources of income and estimating investment income we were able to deduce what their effective tax bracket would be after the cliff. We compared this information with their supplemental tax withholding rate using AirBnB’s HR portal. We quickly crunched the numbers on the difference and helped Jeff and Jana understand an approximate dollar amount they would need to sell and set aside for cash. Finally, we reached out to Jeff and Jana’s tax advisor to confirm the numbers and get a second opinion.

Outcome: Their tax advisor, using our financial plan and a more sophisticated tax software, was able to narrow in on the estimate, placing it just slightly lower than our initial advice. Jeff and Jana decided to use the larger estimate for the sake of safety. When their tax bill came around the next year they were glad they set aside the cash. With AirBnB trading lower, they were happy they didn’t need to sell any of their investments to pay the additional tax. And with the right expectations set their frustration levels at the amount of taxes they have to pay was just slightly better!

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Should I max out ESPP or 401k or both?

Problem: ESPP and 401(k)s. Both are great benefits that can be hard to maximize on a fixed budget. That was the challenge for our client Wilson who is a UX designer at Lyft. He needed to understand where his next dollar should go and why.

Solution: To provide good advice we needed to understand both Wilson’s ESPP and 401k plans. We learned that his ESPP plan provided a 15% discount and a lookback provision. We also learned that his 401k matched 6% of his salary. Finally, to decide how much he should contribute to either we needed to understand Wilson’s living expenses and income after taxes. With this key information collected, we were ready to give our advice.

Outcome: First we wanted to make sure Wilson took advantage of his 401k match. Then, because he was willing to sell the ESPP as soon as he received them, we had him maximize his ESPP. Finally, after he received a few paychecks with these deductions we were able to make slight adjustments to his 401k contributions and increase them for additional tax savings. Wilson is on his way to maximizing these great benefits and getting all the free money from his company!

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Incentive stock options (ISOs), alternative minimum tax (AMT), and tender offers at a pre-IPO company

Problem: Like many of our clients, Jurrien works for a pre-IPO tech company and has ISOs that have appreciated significantly. Jurrien has heard about early exercising and AMT but is not sure what exactly he can do. He wants to have long-term capital gains on this chunk of equity compensation but is worried about AMT. To further complicate his situation, his company has a tender offer coming up and he is completely lost with all the different decisions.

Solution: Helping Jurrien required us to get a deep understanding of his income and tax situation. We put together a comprehensive cash flow analysis for Jurrien with a focus on taxes. Using this analysis, we helped Jurrien understand how many ISOs he could exercise in one year without triggering AMT. In addition to that, we helped him understand his funding options for the exercise and the risks he would potentially take.

Outcome: Jurrien exercised $100,000 of his ISOs. The spread between the strike price and the exercise price slightly came under the Federal AMT exclusion amount, allowing him to avoid it entirely. To fund this exercise, he decided to take advantage of the tender offer and exercise and sell some of his ISOs. Part of the tender process also allowed him to sell enough shares to pay for that brand-new Tesla all cash. Next year we will be exercising another $100,000 or so to make sure he starts the timer on the long-term capital gain tax without triggering AMT in the process.

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Dealing with an early exercise and completing 83b forms

Problem: Jana’s first start-up job was the start of something amazing. But before she could dream of the day the company IPOs, she needed to take care of equity compensation. Specifically, she had heard about the benefits of early exercising but wasn’t sure how it worked and what she needed to do.

Solution: Because Jana was ready to early exercise immediately there was no spread between her strike price and the exercise price. Meaning there was no Federal AMT to worry about. The only concern was whether she should take the risk and how she would execute it. To help Jana out we helped her understand the rules, the filing process, and how this decision fits into her bigger financial plan.

Outcome: Jana learned that if she didn’t stay with her company then for any shares that didn’t vest her early exercise funds would be returned. We also helped her understand that at her age, in her early 30s, and with her accumulated net worth, this is a risk she certainly could take. Finally, we helped Jana complete the 83b form and made sure she got it sent to the IRS. Now she has everything she needs to focus on the growth of the start-up and daydream about the big payout!

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Non-qualified stock options (NQSO) and tender offers at a Pre-IPO Fintech

Problem: Our client Alex is the CSO for a large pre-IPO Fintech. For the last 6 years, he has been receiving NQSO grants. While the company is still years from an IPO there is a tender offer on the horizon. The question is how much NQSO to exercise and how many of them to sell.

Solution: Because Alex has been at his company for a long time, the NQSOs, specifically the difference between the strike price and the exercise price, have greatly appreciated. Alex needed to understand which of his grants to exercise and what would he be leaving on the table by holding on to them. We evaluated all his NQSOs and applied a special formula called the insight ratio. The insight ratio uses information such as how in the money the options are, how much time until they expire, volatility, and interest rates to give guidance on which should be sold, and which should be held.

Outcome: We were able to help Alex see how he could exercise and sell $600,000 of his options while still leaving several million to appreciate. We also helped Alex understand the tax consequence of this transaction and helped him set aside adequate funds to cover the taxes. Finally, we explained that there were no additional tax benefits to holding on to NQSOs once he had exercised them. Alex ended up with a fantastic liquidity event, is now patiently awaiting the future IPO, and is ready for any tax ramifications.

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Navigating Pre-IPO and Post-IPO decisions to maximize equity package

Problem: Our client Shelly needed some help getting through the upcoming Coinbase IPO. She had ISOs, RSUs, and NQSOs that were collectively valued at $4 million dollars. Between all the different tax structures and decisions that she could make it was hard for her to keep everything straight. She was really bullish on Coinbase but also knew that this was life-changing money.

Solution: With so much at stake and with time running out before the Coinbase IPO it was critical that Shelly could look at everything in an organized fashion. There were two things to consider, taxes and risk. To help Shelly understand the tax impact of the IPO and her decision we created a spreadsheet showing comparison scenarios of exercising different stock options and selling or holding on to shares. When it came to evaluating risk, it became a much more personal conversation. Because Shelly was in her 20s, with no family, there were no impending critical goals she felt the need to attain. She felt much more comfortable with the risk of Coinbase not working out.

Outcome: At the end of the day Shelly decided that too much was at risk. She decided to sell her RSUs as soon as the IPO happened, and she exercised and sold some of her NQSOs. She exercised just enough to stay in her current tax bracket and to avoid Medicare tax and net investment income tax. Finally, she decided to exercise and hold some ISOs, but not so much that it triggered AMT. With all of these steps done, she was able to take $1,000,000 off the table within 6 months of the IPO.

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Selling pre-IPO equity without a liquidity event utilizing secondary markets

Problem: When the tech market is booming it can be hard to sit on the sidelines at a pre-IPO company. You see the value of your equity go up, but payday can still be far away. This was the situation our client Alanah was in as an employee of DoorDash. She came to us to help her find liquidity.

Solution: At RHS Financial we have deep partnerships with several private market makers. We reached out to three of these market makers to help Alanah decide if and how much she wanted to sell. We explained to each market maker Alanah’s situation and what she was hoping for. Each market maker had a different strategy on how they would approach the sale and different brokerage fees. We brought all that information back to Alanah and helped her evaluate her options.

Outcome: Ultimately Alanah decided to work with EquityZen. She liked their approach of a non-committal bid and was happy that they could provide her insight into the price DoorDash was trading at. While she had to sell at a slight discount to the current fair market value it was enough to be a huge win for her. She sold off about 25% of her DoorDash holdings and was able to put a down payment on her first home!

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Proactive Tax Planning

 

Tax reviews to avoid mistakes, save money, and prepare for the following year

Problem: Saed and Kim have finally decided to graduate from Turbo Tax and started working with a CPA their colleague referred them to. Over the year we have given them a variety of tax guidance and they wanted to make sure that this year when they did their taxes they didn’t miss anything.

Solution: Before Saed and Kim completed their tax return we asked to review it. Combining our knowledge, experience, and sophisticated tools we were able to compare last year’s tax events with their prepared tax return.

Outcome: We are glad that we did because we found out that Saed and Kim and their new CPA forgot to correctly characterize a backdoor Roth conversion they had made. The CPA didn’t know what form to ask for and Saed and Kim didn’t know which forms to provide. By catching the mistake, we were able to take $12,000 of income off their taxes and save them about $4,000 in actual taxes. The correct tax return was filed, and the CPA now knows which forms to ask for.

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Cross-border tax planning for international clients

Problem: Our client Roderick is an Australian citizen that has been living between the US and Australia for the last 20 years. Roderick is finally ready to call the US his forever home and do away with double tax residency. Part of that process is closing the tax books in Australia. However, to do that he needs to pay the Australian capital gains on unrealized gains as of the date of his final departure. Unfortunately, his final departure just so happened at the peak of the most recent bull run and would cost him $60,000 in taxes paid to Australia.

Solution: To help our client with such a complicated tax case we knew we needed to put together a team. We partnered with Deloitte in Australia and a tax attorney here in the US. We worked together to outline multiple solutions that would alleviate Australian taxes and follow the US tax code.

Outcome: We decided to sell most of his entire portfolio close to the bottom of the most recent pullback. We recognized him barely any US taxes or capital gains and let the Australian tax authority know that we closed out the positions in question. When it was finished his tax bill from the transaction was only $2,300 instead of $60,000.

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Proactive tax guidance and tax payments to reduce April 15th tax bills

Problem: The only thing Edison hates more than taxes, is being surprised with even more taxes. Dreading the outcome and scrambling to come up with cash has always been an unpleasant experience.

Solution: While we can’t entirely eliminate the tax that Edison owes, we can certainly take the unpredictability and the big April 15th payment out of the picture. Early in the year, we worked with Edison to estimate how much taxes he has been withholding on his paychecks. We also projected future tax events such as additional RSUs. Using tools at our disposal and his employer’s w4 form we were able to adjust his withholding for the remainder of the year to better reflect the taxes owed.

Outcome: While we can’t predict every tax event to the last dollar, we can get a pretty close estimate. With our help, Edison’s tax bill looked much better. Instead of owing several tens of thousands of dollars, he had a relatively modest bill of a couple of thousand dollars. This allowed Edison to continue working on his finances uninterrupted without a big disruption to pay the IRS.

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Help with backdoor and mega backdoor Roth to maximize tax-sheltered investing opportunities

Problem: Jen and Tony are highly-paid tech executives. Up to this point, they’ve been maximizing their 401k’s and putting everything else into the brokerage account. Because of their high tax bracket, any type of tax event in their brokerage account dragged down their wealth accumulation.

Solution: Our goal with Jen and Tony was to shelter more of their money from yearly investment taxes. And no better way to do it than through the mega backdoor Roth. We sat Jen and Tony down and walked them through their 401K portals. We calculated how much they’ve been stashing away already, how much their employer was matching, and how much more they can save through the mega backdoor Roth strategy. We spoke to the plan provider and helped Jen and Tony set up automatic conversions to move their money into their Roth IRAs.

Outcome: Between Jen and Tony they are now saving an extra $79,200 a year into Roth IRAs. Not only is this money growing tax free but they are excited that when the time comes in retirement, they can pull it out tax-free as well.

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Connecting clients to new and better tax advisors

Problem: Jake is a highly compensated 1099 employee. He runs his entire payroll through an S Corporation and has a variety of deductions and expenses he utilizes for tax efficiency. While he himself is on top of his tax situation unfortunately his tax advisor is just not up to the job. His tax advisor failed to advise jake to make estimated payments which resulted in large penalties and poor and sloppy communication have frustrated Jake to no end.

Solution: To help Jake out we started by getting a better understanding of how he’s filing his taxes, what exactly is he deducting, and what he’s hoping to accomplish. Using this information, we reached out to a few tax advisors in our network that have been vetted and that we believed could be of help to Jake. We then organized several interviews, solicited feedback from Jake, and give him advice as to who he should move forward with.

Outcome: Jake is now happily working with a new tax attorney. He is comfortable with the communication parameter set between him and the tax attorney. Furthermore, we are helping collect documents, communicating tax-saving objectives, and making sure the tax attorney stays on top of Jake’s taxes.

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Tax bracket management through income recognition and credit utilization

Problem: Our clients Nicole and Gage are happily retired. They own a fantastic cabin up in Tahoe and just installed solar panels. They got a federal and state tax credit and are trying to figure out the best way to utilize it in light of their other tax events.

Solution: As with any good tax planning we started off by collecting all the information we needed. It not only included the tax ramifications from their investment accounts under our management but also all other taxable events that happen over the course of the year. We then worked with their tax advisor to model several scenarios of how they can use their tax credits.

Outcome: When it came down to it, they had two options. Complete a Roth conversion or recognize capital gains. While Nicole and Gage had some really appreciated investments, they decided it would be best to pass that on to their children and have a step-up in cost basis. Instead, we decided to convert just enough to their Roth IRA to make sure that they were in the 0% tax bracket while fully utilizing their tax credits. Now they have a healthy Roth IRA that is continuing to grow tax-free and will eventually be used tax-free with the remainder passed on to their heirs.

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Communicating with a clients tax advisor to get the optimal results

Problem: Kit and Kat have been retired for a few years now and are now eligible for Medicare. Between their IRA distributions and Social Security, they were just under Medicare premium limitations. Kit and Kat also have a very healthy brokerage account. They were concerned about recognizing too many capital gains and that it would trigger premiums on Medicare.

Solution: We have the responsibility and the honor of managing their entire wealth. To address their concern, we have been working closely with their tax advisor annually. Kit and Kat’s tax advisor helped us project their estimated income from all sources. The final piece of the puzzle is how many capital gains can they recognize. Every year this number changes depending on their income events and tax law changes.

Outcome: Because we stay in such close touch with their tax advisor, we have been able to keep them right underneath the Medicare premium limitations. Saving them several thousands of dollars every single year while maintaining a strategy that is supporting their long-term goals.

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Roth conversions in years of low-income to create more tax free assets

Problem: Roger just retired at 64. He managed to save a sizeable amount beyond his 401k. Now he is wondering how to fund his retirement and what else he can do to make the most of his finances.

Solution: Lucky for Roger he just entered a sweet spot of super low taxes. With that came a great opportunity to reduce his future tax bill. Longevity runs in Roger’s family; for that reason alone, we recommended he delay taking Social Security until he is 71. Furthermore, we recommended he started distributing his brokerage accounts first and his IRA only once he reached the required distribution age of 75 (Recent tax law update). Finally, we explained to him and helped him calculate exactly how much he can convert from his regular IRA into a Roth and pay little to no taxes.

Outcome: Not only did Roger get set up with an efficient distribution strategy but he was going to convert $40,000 every year from his IRA to his Roth while paying taxes at the lowest tax bracket. When he starts taking Social Security and reaches his required minimum distribution age his tax bracket will unfortunately skyrocket. But by then he would have already sheltered and grown his Roth by several hundred thousand dollars!

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Personalized and Sophisticated Investment Management

 

Customizing portfolios to personal investment goals and investment preferences

Problem: While 2020 was a challenging year for many people personally and financially it also presented one of the best investment opportunities. Our client Curtis was happy with our core investment strategy, however, he was looking for certain thematic investments. A Bay Area native he was interested in pre-IPO companies, clean energy, and real estate.

Solution: Lucky for Curtis he was not alone. Because many of our other clients have expressed similar interests, we pulled together a few investment opportunities that we believed were top of their class and satisfied our client’s unique desires. However, it was not enough to find these investments; we also needed to make sure they intelligently fit into the client’s portfolios. To do this we utilized our internal proprietary optimization software.

Outcome: We structured Curtis his ideal portfolio. It still resembled his strategic desire for risk but now it was enhanced with exposure to pre-IPO companies, clean energy, and real estate. Curtis participated in the IPO boom in 2020, his belief in green energy was expressed in his portfolio, and although he didn’t make a direct real estate deal that year he still had exposure to the booming real estate market.

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Socially responsible strategies

Problem: To our client Heather the world wasn’t working like she believed it should. It was crucial for her to align her beliefs with her investment approach.

Solution: We started by getting a deeper understanding of what her beliefs were. Which causes spoke to her the most and what she absolutely wanted to avoid? Our job wasn’t just to put together a socially responsible portfolio, it was also to make sure she still had a similar opportunity for return.

Outcome: Using our proprietary optimization software we were able to show Heather how we structured her portfolio to focus on socially responsible investing broadly while also avoiding fossil fuel investing. We showed her that she would sacrifice a margin of return if energy companies did well but overall, the portfolio would be statistically similar to our best recommendation. We decided to move forward and execute this investment strategy for Heather. Now she can be confident that when she is making money it is with a clean conscience.

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Personalized portfolio tax management

Problem: Most of our clients are tax-sensitive. Very frequently they will come to us with existing portfolios that don’t serve their needs exactly but will have several appreciated investments. Our clients expect us to provide them with our best investment approach while keeping taxes at a minimum.

Solution: To accomplish this goal we utilize our optimization software and apply a personalized tax sensitivity methodology. We aim to never recognize our clients more than 0.5 % of tax drag on their portfolio’s performance. This is where we conservatively and comfortably believe we can excel by improving their investment outcome from a return and risk perspective. We then utilize their unique capital gains bracket to derive their capital gains budget for every time we rebalance. Finally, using an internal tax vs. portfolio improvement ratio we evaluate whether we even need to recognize the full capital gains budget in order to achieve the optimal risk/return goal.

Outcome: In combination with intelligent tax loss harvesting most, if not all, of our clients have healthy and strategically aligned portfolios while recognizing little to no capital gains on an annual basis. Pairing with intelligent tax location of different investments between taxable and retirement accounts we are able to deliver a top-of-class personalized tax-efficient investment experience.

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Managing taxes and risk of appreciated stocks

Problem: Many of our clients work in tech and they invest in what they are comfortable in, other tech companies. This was the case for Alberto who brought to us shares of Amazon, Crowdstrike, Zynga, and many more. Our job was to build a healthy portfolio, manage taxes through the diversification process, protect the portfolio from the risk of a sudden loss in value of those individual companies, and setting the right expectations.

Solution: As with any of our investment strategies we began by creating a target portfolio. Using our optimizer, we evaluated the set of first trades that we needed to place. In the first round, we agreed to recognize minimal taxes. Many of the tech positions remained. Over the next two years, we set out to reduce the positions and get Alberto closer to his goal portfolio. We asked Alberto if he would be comfortable setting up a higher capital gain budget than what we have measured by our internal metrics. With his approval, we were able to move more quickly. Every time we rebalanced, we applied our proprietary equity ranking methodology to each of his individual stock positions. We then sold based on what provided the most statistically meaningful improvement, had the lowest equity ranking, and all while staying within the capital gains budget via tax loss harvesting.

Outcome: Two years later and we have finally managed to fully diversify Alberto’s portfolio. We managed to sell a lot of his tech stocks before the tech pullback in 2022 and kept his tax bill at a minimum. He now has a portfolio that matches his financial goals, and his tolerance to risk, and that allows us to express our best investment ideas.

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Managing extreme cases of highly appreciated and concentrated stock

Problem: In extreme cases, we have clients with a majority of their net worth composed of one highly appreciated tech stock. This was the case with Cormac, a long-term Netflix employee. Cormac was an especially extreme case. $5,000,000 all in Netflix shares with some shares that have appreciated more than 2,000%.

Solution: Cormac had many goals including buying a home. It was critical that we found an intelligent way to help him achieve his goals, find a better balance, and manage the insane tax bill. To do this we utilized our most sophisticated strategy. Using Netflix as collateral we took a margin loan on part of his portfolio, we used the proceeds to invest in complementary investments such as other US equities, international equities, fixed income, and alternatives. We further protected his position by taking short positions in similar companies and funds that held shares of Netflix.

Outcome: Immediately we were able to reduce his portfolio risk. Using the new investments both on margin and through shorting we were able to tax loss harvest. Lucky for Cormac the first year Netflix boomed and his portfolio handsomely outperformed the benchmarks. Over the course of the first year, we were able to sell some Netflix and extend Cormac a margin loan to put a down payment on his first home. In the following years as the markets experienced large fluctuations, the diversification we have done, the captured value, and the shorts protected Cormac from massive losses in Netflix.

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Real Estate Advice

 

Should you buy or should you rent?

Problem: At the peak of the 2020 real estate market our client Donovan was moving to Chicago for work. Donovan had a family and wanted a place his kids could really enjoy while still maintaining the urban lifestyle he came to love in San Francisco. Before moving out he wanted to create a gameplan for where he was going to live. He knew he wanted to buy but he just wasn’t sure if it was the best idea.

Solution: Donovan needed market insight and personal guidance to help him feel confident in his decision. Our first step was to figure out exactly what Donovan was looking for. He wanted to live in a high-rise building with amenities, he wanted to be close to the park in a more family-oriented area, and he wanted enough space to have a home office. This narrowed his search down to a few areas in Chicago and to a 3-bedroom apartment or condo. Our guidance when moving to a new area is always to rent first and experience the environment before making a big purchase. We had to find out if there were apartments he could rent that would provide the exact experience he was looking for or if his only option was to buy. We also used a rent-vs-buy calculator with our proprietary adjustments to help him understand just how long he would need to live in the condo for the purchase to be financially savvy.

Outcome: Luckily for Donovan, there were plenty of apartments for rent that met his criteria. He also found out that he would need to live in and own a similar condo for 7 years. This didn’t sit well with Donovan because as he was getting ready to retire he knew he would want to move back to California. Unfortunately for Donovan, because of the tech market downturn, his job turned out to be not what he was expecting. Fortunately, on the other hand, without being locked into an expensive purchase he is now looking to relocate back to California.

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Purchasing your first home

Problem: Buying your first home is a very personal experience. It is a big financial commitment and as with the first time for anything, it is full of uncertainty.  This was particularly challenging for Caroline and Saurin who had an awesome rent-controlled apartment in San Francisco. However, they felt it wasn’t the right place for their future and family.

Solution: The challenge of buying your first home is not just about how much you can afford. It is also a challenge of what you actually want. To help Caroline and Saurin we first put together a comprehensive financial plan to help them understand how much could they actually afford. We helped them understand how much of a down payment they should make. What would happen if one of them lost their job or took a pay cut? And what would happen if they decide to have a kid?

Outcome: With all the scenarios covered Caroline and Saurin had much more confidence to start home shopping. The problem was that what they wanted just didn’t exist in the Bay Area. Lucky for them it did in Seattle. With Caroline’s new work remote ability, it made so much more sense for them. After searching for 6 months, they finally found their dream home. Significantly bigger than what they could find in the Bay Area and with the same carless urban lifestyle that they enjoyed in San Francisco.

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Purchasing your second home

Problem: AJ and Devina had a good problem. They were ready to buy their second home. Their family was growing, and they needed space. However, as challenging as buying the first home was, the second, more expensive home also brought its own challenges with it. What to do with the first home and how much home could they really afford?

Solution: As with any situation of affordability we needed to evaluate their financial plan and help AJ and Devina understand just how much they could afford. Lucky for both, they were a pretty frugal family with a significant income. What that meant is that even though the new mortgage would be almost triple what they were paying right now, they still could afford it. Finally, the question was what to do with their current home. If they wanted to stretch for the biggest affordable home, they would need to sell their property for the down payment. This also created the challenge of selling their current home at the same time as making the offer and the down payment on the new home.

Outcome: AJ and Devina were in a very special situation. If they just decided to buy a new home a bit below their max stretch, they didn’t need to sell their current house. Not only did that take pressure off them to sell the house in a short window but it also presented them with a great investment opportunity. With their low monthly mortgage, thanks to a well-timed refinance they would be able to rent out their current home and have a cash flow-positive investment. This is exactly what they did. Now they have a bigger house with a modestly larger mortgage and at the same time a brand-new rental property helping them build and diversify their wealth.

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Problem: Our clients Ron and Mary jointly own a beautiful cabin in Tahoe with their friends that they have been renting out via AirBnB. The challenge of jointly owning anything is deciding what to do with it. Ron and Mary’s friends wanted to sell the cabin; however, Ron and Mary wanted to hold on to it. They have enjoyed the rental income and all the beautiful memories with their two kids. Ron and Mary came to us to help them evaluate the different options that they had for the cabin.

Solution: To help Ron and Mary we needed to give them the ability to see the problem from all angles. We showed Ron and Mary what it would mean to sell the property fully and take a tax hit, buy out their friends with cash or with a cash-out refi, and what it would mean for them to sell and try to complete a 1031 exchange. We also helped them understand how different decision would impact their current cash holdings, investment options, and overall cash flow.

Outcome: Ron and Mary loved the cabin. They wanted to explore buying out their friends through a ReFi. However, the challenge was that the markets were at an all-time high. The appraisal reports from their friends resulted in an astronomically high buyout price. Because of this, they decided against any transaction at the moment. Since then, home prices have come down significantly, if they wanted to, they are now in a much better position to negotiate a buyout. In the meantime, they continue to enjoy the cabin and continue to rent it.

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Rental property yield analysis

Problem: Our client Kourosh is ready to buy his first home here in San Francisco. But what he is really looking for is both a place to live and an investment opportunity. Looking at duplexes seems to be the best option, however, he asked us to double-check the numbers and give him some guidance around this monumental purchase.

Solution: When you are looking to buy a $3,000,000 home making sure you got the numbers right is critical. To help Kourosh we used our proprietary 7-year cash flow, yield, and ROI analysis on investment properties. The analysis was complex because he was making the same financing assumptions for his personal home as for the investment. However, with some financial planning, we could help him look at various scenarios. One of those scenarios included buying a house separately and the investment property elsewhere.

Outcome: What Kourosh learned is that in order for the financial math to work on the investment property in San Francisco he would need to put in significantly more than a 20% downpayment. However, for the purpose of buying a home he wanted to live in that just did not make sense. Kourosh decided to expand his search horizon for his personal home at a lower price point and start exploring investment properties in completely different markets.

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Real estate partnership deal analysis

Problem: Alberto has always been interested in diversifying through real estate. So he was particularly excited when one of his colleagues introduced him to a real estate company that ran a private fund. Alberto asked us to investigate the fund and evaluate it.

Solution: We had Alberto send us all the prospectus documents and the fund data. We looked over the documents and decided it would be wise to schedule a call with the lead investor. In preparation for the call, we collected key questions that we wanted to be answered. After the call, we followed up with Alberto to provide our insight.

Outcome: Our key concern was the tax ramifications of the distributions from the fund. The fund had used up a lot of its tax write-offs early on. Now, most of the income coming back to the investors was fully taxable. Between the illiquid nature of this fund and the tax ramifications, Alberto decided to pass on this fund. Just a year later Alberto bought his own investment property in the Southeast and is enjoying a good ROI and all the tax benefits of real estate.

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1031 exchange help

Problem: Sadly, our client Tim’s mother passed away. With her passing, he and his 3 brothers inherited her multi-use property in San Francisco. Three apartments up top and a grocery store at the bottom. A phenomenal inheritance. Unfortunately, the property was owned jointly with the mother and thus they did not get a step up in cost basis. With every brother’s financial needs being different they had to sell the property and Tim was saddled with a $300,000 capital gain.

Solution: Tim had a limited time to make a decision on the proceeds. With 45 days to find a new investment property to complete a 1031 exchange, he was feeling the pressure. We immediately introduced Tim to a real estate agent that specialized in investment properties. While the inheritance was sizeable, split amongst 4 people, it was close to impossible to find an investment option here in the Bay Area. Tim also dreaded the headache of being a landlord, it just wasn’t for him. To help Tim out we set out to introduce him to a 1031 exchange fund.

Outcome: After helping Tim complete the due diligence, he decided to take about 2/3 of his inheritance and invest it in the 1031 exchange fund. The remainder he took as cash and paid the capital gains. Tim was able to avoid $200,000 of his capital gains and diversify his wealth further into income-producing real estate that is professionally managed. Headache-free and invested Tim is a happy guy!

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Residential lending solutions “low” salary, high RSU income, and sizable assets

Problem: Our client Shelly is like many other highly compensated tech employees. A lot of RSU income and a lot of wealth in one stock. Shelly has been working for Apple for 9 years and has accumulated significant holdings in their stock. At the same time, her RSUs made up more than 70% of her income. This made buying her first home and qualifying for a traditional 80% mortgage a challenging experience.

Solution: To help Shelly out we needed to do two things: help her figure out how to make the down payment and figure out how to get her underwritten for a loan. First, we went through a detailed tax analysis of every share of Apple she held. We were able to narrow down the very few that were at a loss and used those losses to offset those at the lowest gain. We then recognized a small capital gain to get her diversified and invested so we can tax loss harvest further through the year. Finally, we reached out to several lenders that provide non-traditional underwriting practices and connected Shelly to one that we have had the best experience with.

Outcome: The mortgage broker was able to use her RSU grant in lieu of income. In addition to that, we were able to use her holding in Apple as a way to secure a lower rate. With our help and the help of the mortgage broker, Shelly can now call an amazing home in the Castro her home. At a killer mortgage rate too!

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Preferential Mortgage rates through Rocket Mortgage

Problem: Anna was like many other home shoppers. Shocked and annoyed by the quickly rising interest rates. “Missing” out on low single-digit interest rates, many homes she liked just seemed a bit out of reach. However, not all was lost, and Anna came to us to see what we could do for her.

Solution: Good news for Anna we work closely with Charles Schwab and Rocket Mortgage. We reached out to Rocket Mortgage on Anna’s behalf to see if there was anything that they could do for her.

Outcome: Like a few select financial institutions out there we were able to get Anna a significantly discounted rate. Saving her several thousands of dollars on her annual mortgage payments. And because Anna already had a relationship with us, she didn’t need to move her assets around!

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Helping a client refinance their home

Problem: Jen bought her condo back in 2017. And while mortgage rates were decent back then, they became even more attractive in 2020. When rates drop that low it’s our signal to reach out to our clients and help them evaluate refinancing their properties.

Solution: This is exactly what we did for Jen. Because we had a comprehensive financial plan on file we knew exactly what her current mortgage rate was. We were able to help her evaluate what rate she would need to secure in order to cover the closing costs and make a meaningful difference in her monthly cash flow. Once we knew it was likely that this would work we reached out to several lenders on Jen’s behalf and connected her to one that gave us the best mortgage estimates.

Outcome: Jen not only refinanced her condo and saved thousands a year she managed to rent it out as well. With the lower monthly mortgage, her property is cash flow positive and is a great wealth diversifier!

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Banking Services

 

Structuring a low cost bridge loan and an all-cash offer for dream home purchase

Problem: Vince is a biotech executive ready to retire and finally move to Monterey as he has always dreamed of. However, to buy the house of his dreams in Monterey he is going to need to sell his property in San Francisco. With such tight deadlines, to sell and to buy, and all the uncertainty in between Vince was looking for some way to secure the purchase without the sale of his home.

Solution: Vince had a few options. Including a bridge loan from a specialty financing company. The problem is that the bridge loan came with a very high double-digit interest rate. To help Vince out we did what we have done for countless other clients and turned his investment account into the line of credit he was looking for.

Outcome: Using a margin loan at Interactive Brokers and applying our proprietary portfolio optimization software we were able to draw a line of credit for Vince while adjusting his portfolio to shield him from market volatility. With some of the lowest margin rates in the industry, we were able to provide Vince with the bridge loan he was looking for at low single digits. Vince bought his dream house in Monterey and just a few months later got an amazing offer to sell his San Francisco house. A win-win on all parts of his transaction!

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Cash Management

 

Hunting for High Yield Savings accounts and other cash options

Problem: Anna has been diligently putting away for her sabbatical. But as we all know a big bank usually doesn’t pay a whole lot to hold your money. Anna asked us to help her figure out what options she has and find the best high-yield savings account possible.

Solution: A good high-yield savings account isn’t just about the highest interest rate available. To help Anna really dig down to what would be the best option for her we went through several online bank providers and closely evaluated the features and the terms of their offers. While one offered the highest yield we found it very restrictive in regards to how much she could pull out and when. We knew this type of limitation wouldn’t work for Anna and so we continued our search.

Outcome: We found a high-yield savings account that not only had one of the higher interest rates but also had a history of maintaining that high-interest rate. Furthermore, it had some of the lowest restrictions when it came to pulling out money and sending wires. As Anna approached her sabbatical she set up automatic distributions from her high-yield savings account that went directly into her checking. Easily automating her “income” while getting a significantly better rate on her cash.

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Early/Retirement Planning

 

Planning for a bigger home, a growing family, and a worst-case decrease in income

Problem: Our clients Emily and Michael are high-income earners. However, Michael’s income is all sales commission. Emily is really worried that if it doesn’t hold up, they won’t be able to maintain a bigger mortgage on that new home for their growing family.

Solution: Our team of Certified Financial Planners® put together a comprehensive cash flow analysis to show them their current financial status projected into the future. Using this cash flow analysis, we were able to run statistical stress tests to show them how little Michael can make and how much of a house they could afford.

Outcome: We were able to show Emily and Michael that they could buy a $1,900,000 home and have Michael’s income drop 75% while still being able to meet their retirement goals! This extreme scenario put Emily at peace. A few months later Emily and Michael bought a new home and have a second baby on the way!

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Financial independence and an early retirement

Problem: Priyanka and Nick are in their late 30s and are interested in one thing only: how to retire as early as possible. Because they never quantified this goal, they feel the need to invest in the most aggressive way possible, take moonshots with IPOs, and take the highest-paying jobs possible with toxic cultures and crazy hours.

Solution: Using our complex financial planning software we were able to map out their current finances and run several scenarios. These scenarios showed them how early they can retire if they were to invest just a little differently, if they were to diversify, and if they took just a slight pay cut.

Outcome: Priyanka and Nick realized two things. First, if they spend just a little less money on an annual basis, they could retire in just 7 years in their mid-40s. Second, they already built a really good financial nest egg and didn’t need to 10x their wealth to get to their goals.

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Financial freedom and potential career transition

Problem: John is a high-level executive at Google in his early 50s. While he enjoys his work and is good at it, he can’t help but dream of the day he doesn’t have to work in a high-pressure environment with long hours. Really what John wants is more time to work on his plane collection. He has a ton of Google shares and is worried that if something happens, he may not be in a position to flip his job.

Solution: To help John we took a two-prong financial planning approach. First, we showed John just how much Google shares can drop in value while maintaining his ability to retire in his mid-50s. Second, we showed him what is the lowest paying job he could take if his $2 million dollars of Google were to entirely vanish.

Outcome: John is already in a good position, but to secure his financial freedom and goals he decided to divest $500,000 from Google. With this decision and confidence in our planning, John sold his house in Napa and moved to Utah where he bought a property 2 miles away from an airstrip. John is happily working for Google, and fixing and flying planes in his free time ready to walk away from his full-time job whenever he feels like it.

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Cash Flow Analysis and Scenario Testing

 

Scenario testing to craft the best lifestyle

Problem: Mark is a successful interior designer in his late 50s. As a partner of a design firm, he started he has a large payout coming to him in the next few years as he is approaching retirement. While he loves the Bay Area, he is ready for the next chapter of his life. Does he buy a property in Oregon and one in Tahiti? Does he buy a bigger property in Oregon and just Airbnb monthly vacation rentals in Tahiti? Or are there other combinations that make more sense?

Solution: To help Mark turn a feel-good decision that can be scary into an objective evaluation we helped Mark run multiple scenarios. The scenarios didn’t focus on being able to retire, they focused on what is the most he can do while not running out of money by the time he hit 95! We then put together all the scenarios side by side for him to evaluate and gave him some personal advice that we thought resonated with his core beliefs.

Outcome: Mark finally settled on a plan that made him happy. He bought his dream home in Oregon, a stretch he didn’t think was possible. He also came to the conclusion that no matter how nice of a home he could afford in Tahiti it just wasn’t worth it and instead he could easily spend 3 months of Airbnb rental cost and live like a king.

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Emergency fund planning that’s personal

Problem: Gea is not a fan of talking about her finances or generally looking at them. However, she knows that being an engineer at a start-up can have unfortunate surprises. Her spending has been inconsistent with random expenses popping up. She was really stressed out that if she lost her job that she would need some cushion to protect herself, but she just didn’t know where to start.

Solution: To help Gea we started by having her connect all her bank accounts to our financial planning tool. We meticulously poured over every month of her expenses for the last year and helped her categorize them. We then discussed what is a must, what is a one-time event, what is nice to have, and what other expenses she had coming up in the next year. Finally, we had a heart-to-heart conversation about what would make her feel comfortable.

Outcome: Taking a more personal and detailed approach to an expense conversation Gea committed to 9 months of emergency expenses. More than traditionally recommended but it made her comfortable and confident that no matter what happened she would be just fine. While not monetarily quantifiable the mental relief was a major upgrade to her finances!

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Planning a sabbatical to get away from a toxic work environment

Problem: A toxic work environment has taken its toll on John. John was with Unicorn XYZ pre-IPO (We won’t mention names…) and as the IPO loomed, he was certain that it would all be worth it. While the IPO was hot the next 6 months were everything but. It was the breaking point for John, and he just needed time away.

Solution: To help John find the courage and the financial resources to take a sabbatical we went through a detailed budgeting exercise. We calculated all the discretionary expenses and all the non-discretionary expenses. We put together a budget that would give John anywhere from 6 months to as long as a year to get himself oriented. We then helped John go through his portfolio and sell investments to raise the cash needed while keeping taxes low and maintaining the overall investment strategy intact.

Outcome: John finally handed in his resignation letter. The next year was amazing for John. He traveled, took some time to self-reflect, started a side hustle, and finally found his next dream tech job.

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College planning and funding intelligently not fairly

Problem: Mary and William are retired tech executives and awesome grandparents. They have four grandkids that they absolutely love and want to put through any university of their choice. One of their grandkids is as young as 2 while the eldest is 16. Because they are “fair” grandparents they have been contributing the exact same amount to each child every year. Unfortunately, this meant that their eldest grandkid didn’t look like they would have the right amount of funds for college.

Solution: As financial advisors, we know that time and rate of return are at the core of every successful financial plan. We set out to “optimize” Mary and William’s gifting strategy. To do this we put together statistical projections of their current savings level for each grandchild and the goal of a 100% funding probability for Harvard. We then backed into the correct savings amount for each child given their age and existing 529 balances.

Outcome: As expected the eldest child needed a boost in their annual savings while the youngest could do with significantly less on an annual basis. 3 years later their eldest has just got accepted to Columbia and it looks like they will be able to fully pay for all the tuition using their 529. In the spirit of fairness, Mary and William set up their youngest grandkid with a healthy custodial account in addition to their 529. The future looks bright for all their grandchildren!

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Budgeting for day-to-day and big-ticket items

Problem: Just because Terry and John make $3.5 million a year doesn’t mean they don’t need good old fashion budgeting help. Especially when they are planning a $1,000,000 renovation of their amazing Atherton home. A steep price even for someone in the top tax bracket but especially for someone who hasn’t had a good look at how much they were spending on an annual basis.

Solution: To help Terry and John we did a deep dive into their monthly spending. We poured over every single one of their transactions month after month for a full year. We met with them and marked what was recurring, what was one time, and what they expected to spend in the near future. Using this data, we were able to present them with a projection of their annual savings and how a big expense would impact their nest egg.

Outcome: Equipped with confidence in their spending habits and after making some small adjustments their Atherton home is now looking better than ever. With a closer look at their spending and saving they have even more confidence that their retirement and kids’ education goals are on track.

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Estate, Legacy, and Gifting

 

Estate planning and building a trust

Problem: Asif and Stephanie have a busy life. They have two kids, a property that they are remodeling, and a vacation home in Tahoe. Despite all this, they knew how important it is to make sure that their kids are taken care of if anything was to happen to either of them. They didn’t have very complicated wishes but wanted to make sure that their parents would look after the kids and that their kids would inherit the money in a very regimented way.

Solution: To help Asif and Stephanie we utilized one of our estate planning tools. We took them through a formal interview, gathering information on how they would like their asses to be passed on, who the guardians should be, how they should be taken care of if they cannot take care of themselves, and many other key estate planning questions. We helped them understand what their options are and in which scenarios these options would be useful.

Outcome: By utilizing the estate planning tool, partnering with attorneys, and by going through a rigorous estate planning process we were able to establish Asif and Stephanie a full estate plan with a trust. We also helped them re-register their accounts into the trust and worked with attorneys to retitle their properties. We did this all at a fraction of the cost that traditional estate attorneys may have charged and it was a great foundation for someone as busy as Asif and Stephanie.

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Planning a gifting strategy for children

Problem: For our client Irving, a legacy for his kids is at the top of his priorities. Irving is the CMO of a hot pre-IPO data storage company. Most of his wealth is tied up in Incentive Stock Options. He has heard from some of his coworkers a variety of different strategies and needed clarity on which one would be most applicable to him and his family.

Solution: When a client like Irving, who is looking for a complicated solution, the best first step is always to educate. We gave Irving a very comprehensive breakdown of all the gifting strategies that he can implement and the pros and cons of each. We then sat down with Irving and went through each solution and discuss with him how it applies to his unique situation.

Outcome: With everything laid out in front of Irving he decided on a few gifting strategies. First, he would continue to contribute to his kids’ 529s. Because he was worried about reckless spending when the kids turn 18 he decided to opt out of the custodial account and instead utilize a children’s Roth IRA. We also discussed setting up a Crummey Trust so he can give in bigger amounts to his children. Now, all we are waiting for is the big liquidity event and then we can start to supercharge the gifting strategy for Irving and his family.

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Estate planning for life emergencies and caretakers

Problem: Cindy and Angela are happily retired. A long time ago they made the choice to not have kids and as far as they’re concerned it worked out really well for them. However, they are starting to get worried about who will take care of them if they find themselves in an emergency. Furthermore, who should they pass the money on to?

Solution: Cindy and Angela have a relatively simple estate planning situation. They needed help figuring out who would take care of their finances if they were unable to themselves. Who would take responsibility for major medical decisions if they couldn’t? And where would their wealth go when they were no longer here? To help them through this process we utilized an internal estate planning tool. We took them through an interview process and helped them think clearly about who could be there to support them. We also help them explore different causes and people in their life that they believed should inherit their wealth.

Outcome: With the help of the internal estate planning tool, we were able to put together a durable power of attorney and a healthcare proxy. We organized a notary to come out to their house and get these documents signed. We also helped them establish beneficiaries on every single one of their accounts and registered their brokerage accounts to a transfer on death (TOD). We established a simple beneficiary scheme that included passing on their money to their distant relatives in equal portions as well as to one of their favorite charities. For a few hundred dollars Cindy and Angela now have a complete estate plan for their simple needs.

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Complex estate planning for high-net-worth families

Problem: For some families, the biggest problem they’ll have is passing away with too much money. This was the case for our clients Edgar and Susan. Their frugal lifestyle combined with Edgar’s executive Google compensation meant that they were accumulating their wealth at a staggering pace. With estate tax rates as high as 40 percent or more, it was no wonder Edgar and Susan were concerned that a lot of their wealth would not go to their children.

Solution: Edgar and Susan could not believe that this would be their problem. The first step in helping them was to put together a comprehensive cash flow analysis to show them just exactly how their wealth accumulated at their current pace. Our next step was to educate them on all the different options that they had. Some options didn’t create a big dent and other options meant that they had to forfeit control of their wealth very early on. To really help Edgar and Susan, we connect them with two different complex estate planning attorneys. We went through several rounds of conversations with both attorneys to help them understand what options they had and what options would make the most sense including the cost involved.

Outcome: Edgar and Susan decided to take a multi-prong approach. First, they suspended their gifting to 529s and instead refocused it entirely on the custodial accounts. They also set up a Roth IRA for their kids. Finally, we agreed that over the course of the next year we’re going to set up an intentionally defective grantor trust (IDGT) and start contributing larger pools of money on an ongoing basis. With these new strategies in place, the revised cash flow analysis shows that they are projected to avoid $4,000,000 of estate taxes!

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Charitable Guidance

 

Philanthropy and the Donor Advised Fund

Problem: Our client Jana enjoyed gifting to her favorite charities. However, every year she would give some cash, and with the new changes in the tax laws, it was never enough to get a meaningful tax deduction. Furthermore, without kids, she knew she wanted her wealth to pass on to some of her favorite charities, but she just didn’t know the best way to accomplish this.

Solution: Jana needed tax and legacy guidance. We knew just the solution. To help her out she really only needed one thing, a Donor Advised Fund. Because Jana knew she would continue giving every year we also made a compromise with her to help her get a tax deduction. Gift a lot in one year, enough to get a tax deduction, and don’t gift for the next few years.

Outcome: Per our advice, Jana decided to open a Donor Advised Fund. She set up her investment accounts to have the Donor Advised Fund as the beneficiary. She then set up a distribution plan in the Donor Advised Fund at a rate of 5% a year and invested in such a way that over a long time frame, the rate of return would average out to be higher. Finally, instead of contributing cash, we helped her contribute highly appreciated stock. Not only did Jana save money on capital gains and income tax but now she has a simplified legacy plan that will live on forever!

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Employer Benefits Planning

 

Maximizing client’s 401ks

Problem: Nitish recently started at Google. Coming from a small start-up that had no 401k plan he was overwhelmed with his choice and wanted to make sure he was saving and investing correctly.

Solution: We sat Nitish down and walked him through his 401k portal. We calculated contribution percentages for him, and we then focused our attention on the investment selection. Nitish, in the middle of his career, has expressed a strong desire to invest in a conservative matter. He had a lot of risky venture capital investments and wanted to balance them out with his liquid investments. We helped him understand the difference between using target date funds and self-selecting funds to build a portfolio.

Outcome: We agreed that target date funds wouldn’t work for him. They were just too aggressive based on his retirement date and financial situation. Instead, we worked with him to set up a simple four-fund portfolio and set up automatic contributions, so he didn’t have to worry about the selection going forward. Every year we sit down with Natish to review his 401k, contributions, and allocations. He knows that an important part of his wealth building has received a personalized approach.

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Executive deferred compensation planning

Problem: Josette is an executive at Microsoft. She has been maxing out her 401k and participating in the mega-backdoor Roth strategy. She is now being offered deferred compensation. Being in her 50s she is wondering if she should participate and for how much.

Solution: To help Josette make the most of her deferred compensation we first needed to help her understand the benefits. We educated Josette on the tax deferral and savings element of deferred compensation. We also helped her understand how the payouts work and the risk if Microsoft were to go bankrupt. Finally, we had to figure out how her match would be impacted by the deferred compensation.

Outcome: We discovered that her match would indeed be impacted by any contributions to the deferred compensation plan. To manage for this, we increased her deferred compensation to reduce her income only so much that it didn’t go below the maximum IRS income match limitations of $330,000 (for 2023). We also implemented a distribution plan to start 5 years after termination and over a period of 10 years. Granting the longest tax deferred period of time and with limited annual tax impact. Now Josette is putting away another $40,000 a year, reducing her tax bill, and accumulating wealth tax-free!

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HSA guidance

Problem: Our client Cliff has had it with taxes. He just got his tax filing done this year and with a $100,000+ tax bill, he was looking for anything and everything to reduce taxes. Naturally, we turned to his 401k and HSA strategy.

Solution: The easiest way for someone to drop their tax bill is to maximize their 401k and HSA. We started by looking at Cliff’s HSA strategy that he had self-implemented 4 years ago. Right away we noticed that he wasn’t maximizing it. His contributions reflected his single status of 4 years ago and not his current married status of today. But the worst part was that none of Cliff’s HSA was invested, and he was spending it down. We immediately got Cliff invested and helped him understand that he should be paying for his minor medical expenses out of pocket.

Outcome: Like many people, Cliff was not aware that HSAs, unlike 401k’s, default setting was to sit in cash. With our help, he now has an automatic investment plan, and the majority of his contributions will continue being invested. With a few thousand dollars more a year and a solid investment plan, Cliff is on his way to reducing taxes, increasing his net worth, and having a tax-free way to pay for medical expenses in retirement.

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Workplace benefit planning

Problem: Adan just switched jobs and with that job switch came a lot of new employer benefits. New 401k program, new equity compensation, health care plans, gym, childcare, and transportation benefits. Adan needed help making sense of all of this.

Solution: Unless it’s a top tech firm, when we are looking at employer benefits, it’s usually for the first time. To get through this we sat down with Adan over Zoom and had him share with us all his employer benefit portals. We went through each one starting with the 401k. We looked at match rules, the mega-backdoor Roth strategy, and we then moved on to equity compensation. We reviewed Adan’s grant letter and helped him navigate the Shareworks platform. We wrapped up by looking at all his fringe benefits and discussing which ones fit his and his family’s needs.

Outcome: After about an hour Adan was all set. Everything was addressed, signed up for, and maximized. Adan can get to work knowing that he isn’t missing any of his employer’s benefits.

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Setting up self-employed plans for 1099 employees and business owners

Problem: While we work primarily with tech professionals, we often find ourselves helping entrepreneurs. This was the case for Cindy who started her own high-end landscaping company here in the Bay Area. Cindy was used to having a 401k at her past tech job but now she didn’t know how to go about saving for her retirement.

Solution: Our process with Cindy included helping her understand her options, connecting her with a quality tax professional, setting up a SEP IRA, and staying on top of her contributions.

Outcome: Every year we reach out to the tax attorney we referred her to and ask them for her contribution amount. We automatically, with Cindy’s permission, draw those funds from her business account and invest them along with her other accounts. With this “automated” process Cindy can worry about building her landscaping empire without worrying about building her financial future.

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Insurance Planning

 

Insurance planning to protect those you love

Problem: Life insurance tends to be a very altruistic decision. It is made much easier when you have a family that depends on you. Our client Vince had life insurance provided by his employer but he just felt like it may not have been enough. He came to us to make sure he wasn’t missing something.

Solution: To help Vince out we calculated his life insurance needs in a couple of ways. First, we looked at how much it would take to entirely replace his compensation until he retired. Next, we used our financial planning software to project the gap that would be left between other sources of income, assets, and most importantly the expenses that he and his family planned for.

Outcome: We found that looking at the gap resulted in a need for a different and smaller policy. Because this was more realistic, and also carried a much lower monthly premium Vince decided to sign up for an extra $2 million worth of term insurance. To help them sign up and find the best carrier we introduced him to one of our insurance partners. He was able to shop from 20 different providers and narrowed it down to one that not only provided the best benefits in the payout but also the lowest monthly premium. Now Vince can comfortably go backcountry skiing and scuba diving as he sees fit without worrying that his family will be left unprotected.

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Insurance planning for liability

Problem: Ravesh and Cindy have a good problem: too many taxable assets. And with listing their first home for rent they need to make sure that their wealth was protected from any liability and lawsuits. Confused about whether to set up an LLC or take other measures they turned to us.

Solution: Lucky for them we have quite a lot of experience helping clients protect their assets from liability. We educated Ravesh and Cindy on the pros and cons of setting up an LLC versus an umbrella policy.

Outcome: Ravesh and Cindy decided that an umbrella policy just made more sense. With the high franchise tax in California for setting up an LLC and the low cost of a $2 million umbrella policy it was more economical to go with the latter. We then worked with Ravesh and Cindy to get them through the entire process of setting up their umbrella policy with their current insurers. This included helping them switch their auto to their home policy provider, maxing out their existing liability coverage, and proactively nudging them along until they finished setting up the umbrella policy.

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Homeowner insurance planning

Problem: Chris has lived in the same house in California for over 20 years. Year after year this house was spared from fire damage and storm damage that hit other areas. Until working with us Chris has never reviewed his home insurance policy. When we met with him, we instantly knew that we needed to correct this oversight.

Solution: Part of our process with all of our clients, is to review their insurance policies. When we know someone has lived in the same house for a long time there’s a good chance that their coverage hasn’t been updated in a while. With how well home prices have done and how expensive it became to construct we knew it was a good idea for us to talk to Chris about his home insurance policy.

Outcome: Chris bought the house 20 years ago for $320,000. And now it was worth $ 1.4 million. Surprisingly, his coverage wasn’t still at $320,000 but it was only at $650,000. We immediately helped Chris shop for new home insurance and set him up with a new policy provider. Now Chris knows that come rain or shine if anything was to happen to his house, he would avoid financial trouble.

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Concierge and Flexible Family Office

 

Working with attorneys for tenant dispute issues

Problem: Arjun and Melanie have an amazing rent-controlled apartment in San Francisco, however, their neighbor has decided to make their lives miserable. Promised by the landlord that they can play the guitar at acceptable times they were constantly pestered with egregious noise complaints and threats of the police. Not knowing what their options were they came to us for guidance.

Solution: While we are no tenant attorneys and tenant disputes are usually outside our wheelhouse we set out to do what we could to help. Primarily we wanted to provide Arjun and Melanie with all the support possible in finding a good attorney, explaining the situation, and evaluating their options. We set out right away reaching out to several attorneys in our network to get referrals. We then reached out to the referrals on our own and explained Arjun and Melanie’s situation. Most of the attorneys we spoke to just didn’t represent tenants, the others didn’t think they had a case, but finally one agreed to help.

Outcome: While they hoped to stay in the building the environment had become hostile. However, with the help of the tenant attorney, they were able to break the lease early with no problem. Now they have moved on to a much better apartment where they can enjoy the sound of music.

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Helping clients with divorce documents and releasing assets

Problem: Our client Daniela went through a divorce and got remarried long before we met her. Unfortunately, when it came to organizing her assets the divorce still hung over her head. Especially in places like her employer’s retirement accounts. Daniela asked us to help her unshackle her accounts from a Qualified Domestic Relations Order (QDRO).

Solution: We spoke to her old 401k provider to get to the bottom of why the QDRO was still applied to her account. We quickly realized that they were not aware of how the assets were split in the divorce. Unfortunately, the first solution would be to reach out to her ex-husband and get a signed letter with the clarification. That was just not an option. After several more calls on Daniela’s behalf, we finally had a breakthrough.

Outcome: After speaking to a manager we learned that if we send another blank QDRO with a copy of the court divorce order then we don’t need to get her ex-husband involved. In just a few weeks we were able to get several hundred thousand dollars moved over from her old employer plan into her new Rollover IRA. One less headache for Daniela!

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Preventing elderly abuse and fraud

Problem: Before Shana’s husband passed away, he asked me to look after her. A heavy burden and a responsibility I took personally. Unfortunately, at Shana’s age, she was often the target of elderly fraud. She had three computers at home with different email addresses and logins creating a complicated web of security issues.

Solution: To help Shana out we were going to have to get creative. First I sat down with her at home and looked over her last 6 months of bank statements. We identified transactions she believed to be fraudulent. We then called her bank and disputed several of these charges to our benefit. Finally, we reached out to multiple tech repairmen and found one that specialized in elderly clients. We paid for his service out of pocket and we personally supervised him during the process and helped him get Shana’s computer situation simplified.

Outcome: Shana was able to get back almost $10,000 of fraudulent charges back. Since we had her computers cleaned up and simplified we haven’t noticed any more fraudulent charges!

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Introductions to professionals

Problem: A sloppy tax advisor plagued our clients Sarah and Derek. Sarah is a highly compensated contractor with a 1099 who needed help paying the correct estimated taxes and finding all the best tax reduction strategies. Sarah and Derek turned to us to find them a replacement.

Solution: The first step in helping clients looking for a new tax advisor is to have a good understanding of their tax situation. We took some time and personally reviewed their tax forms. We looked for complexities and characteristics that would provide us guidance on who we should refer. Because Sarah and Derek worked in the real estate business and had an interest in investing in real estate, we introduced them to a tax attorney that had experience in that same line of business.

Outcome: Once we made the introduction we worked with Sarah, Derek, and the tax attorney to facilitate the tax filing process. We helped collect the correct documents, we made sure the tax attorney was aware of any special circumstances, and we stayed on top of their first tax filing until it was finished. So far so good, Sarah and Derek are much happier with their new tax advisor and they are working on reducing their tax bill more than ever.

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International Planning

 

Planning for an international move

Problem: Many of our clients are multi-national. And this was the case for Marcus. He was ready to move back to Canada but has built all his wealth here in the United States. He had 401ks, Roth IRAs, and brokerage accounts all at multiple firms. He needed help figuring out exactly how to get everything prepared for his move to Canada.

Solution: Helping Marcus move included navigating tax ramifications, figuring out which financial institutions could help, and helping him understand what resources he will have available to him in Canada. We first partnered with a Canadian tax firm to help us better understand what to do with his retirement accounts. We then reached out to several financial institutions to figure out who can hold assets while he was in Canada.

Outcome: After giving Marcus an outline he decided to maintain his 401k here. He decided to pull out the Roth contributions but not the growth. He set up a Canadian tax-free savings account. And he maintained his investment strategy in his brokerage account through Interactive Brokers. With all his ducks in a row, Marcus was ready to move to Canada and start his new life and job.

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Helping buy a home in France

Problem: Denise and Rory have always wanted to have a house in France. Denise being from the UK and Rory being from France, both had a lot of family in Europe and wanted the opportunity to be closer to them. With such a big investment so far away, they felt way over their heads and needed our help navigating the decision.

Solution: As always when it comes to helping people make big purchases like a house, we started by going through a financial plan. We showed them that they could easily afford half a million-dollar home. Next, we needed to figure out the French real estate market and the process of purchasing a home. On Denise and Rory’s behalf, we spoke to several French real estate and law firms specializing in purchasing real estate for expats. We also reached out to our colleagues in the industry and even friends that we knew went through a similar situation. We collected all the information and presented Denise and Rory with a game plan as well as guidance as to who they should work with.

Outcome: After a few months of back and forth looking at properties via Zoom and going through two different real estate agents Denise and Rory made the wire and are now happy owners of a beautiful Southern France villa.

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Disclosure: These stories are loosely based on real client scenarios. All names, numbers, and other identifying information has been completely masked to keep our clients anonymous. We do not operate as a bank. We provide bank-like services through our partnership with Charles Schwab. For further disclosures please read here.

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