Ryan T Stark

Ryan T Stark Fee-only fiduciary financial planner

Equity Compensation & ISOs -It’s not always best to focus only in the tax aspect, especially with ISOs, as there are man...
02/16/2023

Equity Compensation & ISOs -

It’s not always best to focus only in the tax aspect, especially with ISOs, as there are many variables to decide whether or not you hold a stock.

However, I find most people don’t know the tax implications, so below you can see an easy to remember drawing for the basics:

- 1 year from expertise
- 2 years from grant date

That is how you achieve the most favorable tax position - which can be important if you make a lot of money and are in a high tax bracket (which is normally the case with ISOs, but not always).

ISOs are always worth a conversation, but hopefully the picture below provokes some thought.

We have no idea where taxes will be in the future.To combat this uncertainty, similar to diversifying our investments to...
01/31/2023

We have no idea where taxes will be in the future.

To combat this uncertainty, similar to diversifying our investments to better tolerate an unknown stock market, we can diversify our tax situation.

While there is no one-size-fits-all financial plan, a strategy most would benefit from is to have all three “buckets” below.

We advisors love to use this term “buckets,” which is just an easier way to lump certain accounts together for tax conversation purposes.

🪣Tax-Deferred:
- Traditional 401k / 403b
- Traditional IRA

🪣Tax Free
- Roth 401k / 403b
- Roth IRA
- HSA (possibly taxed never)

🪣Taxable:
- Individual / Joint Brokerage

Which “buckets” you fund the most depends on your specific situation: where you are now in life and where you want to be in the future.

This is why we plan.

"I am investing in my 401k every month, but it keeps going down, should I stop contributing until the market recovers?"I...
01/27/2023

"I am investing in my 401k every month, but it keeps going down, should I stop contributing until the market recovers?"

It can feel like spinning wheels. Every time you contribute money, it seems to disappear as the market goes down.

However, I encourage you to think in terms of “accumulating shares.”

Current market price is an arbitrary number for the long-term investor. We do not know where the market will be in 10, 20 or 30 years from now, but history shows us it will be much higher. With this in mind, the name of the game becomes “accumulating shares.”

Once you switch your mindset, market corrections start to feel like buying investments at a discount - like Black Friday deals for shares of the best companies in the world.

Emotions can make the mindset switch more difficult, so I find it’s better to confront them directly. Talk it out with yourself if you aren’t working with a financial advisor:

“The market is going down and this makes me nervous. However, I wasn’t nervous when the market was going up. I kept investing in the funds I believed in, even though the price continued to increase. I have plenty of years left to invest. I know I feel emotion and that is okay, but what is my logical mathematical reason for stopping my contributions today as I continue to believe in my investments?”

This is why it’s so important to understand what investments you own - because you have to continue to believe in your investments during down markets, as human behavior is the #1 culprite to poor investment performance.

Your future retirement depends on your current investment behavior.

If you played this, it’s probably time for a financial plan.
10/14/2022

If you played this, it’s probably time for a financial plan.

09/21/2022

Here are 3 basic accounts everyone should build towards in no particular order:

-Traditional IRA / 401k
-Roth IRA / Roth 401k
-Individual

They are all taxed differently and follow different withdrawal rules, which allows you to have more flexibility in the future.

Traditional IRA - no withdrawals without penalty. Can withdraw at age 59.5.

Roth IRA - can withdraw what you put in, but cannot remove the growth without penalty.

Individual - no penalties for withdrawal at any time, but you will deal with short term and long term capital gains taxes.

The purpose of setting up these 3 accounts is because life will throw you curve balls and I have found through experience that flexibility (the ability to pivot in life) with money is always the best strategy.

I am offering a simple financial plan and 1 year access to me for $500.I’ll look at all of your stuff, give recommendati...
07/10/2022

I am offering a simple financial plan and 1 year access to me for $500.

I’ll look at all of your stuff, give recommendations and then we can monitor that plan for a year and make adjustments when necessary.

Details:
- 3 meetings to complete plan
- shared plan online that we can monitor together
- unlimited access to a financial planner for advice

The market isn’t as scary as the news makes it seem, so it’s good to have a strong understanding of the fundamentals - especially understanding what investments you own and why you own it.

Any questions - let me know.

02/20/2022

Hey all -

Long time no post.

The markets have been moving around a lot, which happens often.

It’s nothing to be afraid of, but maybe something to prepare for.

Happy to chat with anyone who just wants to make sure they are set up correctly.

Nothing more valuable then a good nights sleep.

12/29/2021

Don’t forget to invest your HSA.

“What’s an HSA?” - it’s a health savings account that you get through work.

You established it (if you have one) when you chose health benefits as you need to have a high deductible health plan to qualify for it. So you would have done them at the same time (when you started working).

It can be invested similar to your 401k - similar fees and funds and stuff.

However, it’s in a separate place than your 401k so it won’t be through the normal Vanguard or Fidelity website, which makes it really easy to forget about.

It can be found under your benefits section through your work online portal if you need a place to start searching.

You should be getting statements on it at least annually at tax time, but again, this is an account I see fall in between the cracks a lot because no one knows what it is and it’s not directly in your face like your 401k, which you also probably should review.

But that’s for another post.

09/19/2021

Tax laws are changing and mostly for those making high income ($400k ish gets hit the hardest), but others will be affected as well.

Things that could change include depending on your income:

- back door Roth’s
- step up on basis for individual accounts (this means more taxes for beneficiaries when you die)
- non-deductible 401k rollovers to the mega back door Roth (this technique is only available to some 401k plans - not everyone)

First, I don’t expect these terms to mean anything to you. And honestly, it’s just theory right now anyway.

Just know they are closing a bunch of planning opportunities I always advise people to take, so I believe it’s more important now then ever to do what you can this year before anything in finalized, which brings me to my next point.

This is a just current conversation and until things are finalized, it’s not worth changing your life over. All we know is some things will change, we just don’t know what yet.

What we know is they are working towards having high income people pay more tax and getting rid of any ‘loop holes’ they feel that stops the government from taking share of taxes.

These tax law changes will affect everyone, just not as heavily as high income people, but if you make a bunch of money I suggest you talk to a financial planner to see what you can do before the government passed the “we hate wealthy people” tax bill.

09/01/2021

Insuring the breadwinner seems pretty obvious, but what about the stay-at-home spouse?

Most make the mistake of thinking that someone who doesn’t provide income shouldn’t be insured, which I think is a mistake.

If your spouse dies tomorrow, you have to replace that gem of a human being, which you won’t do with money. But it sure does help.

Decent child care is about $20k per year.

This doesn’t account for the other things they did around the house you may not be able to handle because of work and raising the kids alone.

The insurance can be used to take time off work so you can grieve. This could take months.

It won’t replace them, but it gives you the buffer to navigate this life altering event.

08/29/2021

A financial plan is just a snapshot in time.

Your life could change as soon as we end our final zoom meeting.

The real value is you and I staying in touch while we monitor the plan as life changes.

- having baby
- moving
- getting married
- taking care of a parent

Changes that snapshot in time.

Life changes and so does the plan.

08/28/2021

The market will get crushed eventually.

We think it won’t happen until it does.

The market goes from “I am a genius” to “I have no idea what’s happening” really quickly.

It’s coming because it always has. Corrections in the market (when it goes down) happen and we need to understand them.

Plan for it.
Know it’s coming.

Your goals need to account for the fact that the market takes a dive here and there.

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Carney, MD

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