Case Study #3: Professionals Desiring a Shift to More Satisfying Work


Tim and Susan Anderson have had successful careers as executives, Tim as a high level corporate vice-president and Susan as the executive director at a local non-profit.  However, they are burnt-out by the long hours, Tim’s strenuous travel schedule, and the constant barrage of emails and time commitments.  Sometime in the next 2-5 years they would like to become small-business owners in the food industry. 

Unfortunately—though monetarily successful with levers to pull (like Tim’s corporate stock options and restricted stock)—a few surprise health expenses, the purchase of a new house, and other budgetary hits resulted in the couple racking up nearly $50,000 in credit card debt. They called us to help them set up a budget, pay down their debt, and plan for an eventual shift into more  personally satisfying work.  




Tim's & Susan's Goals

  • Institute a sustainable spending and savings plan
  • Pay off $50k in credit card debt
  • Build up cash reserves for a rainy-day fund
  • Institute tax-efficient investment strategy considering stock options
  • Plan for eventual shift into business ownership

Financial Plan

For Tim and Susan, the most important thing was to pay off their credit card debt as that was compounding at 15%, even as cash rates were barely 1%. After surveying all the options, including slowly paying down via excess cash flow, we decided to exercise some of Tim’s corporate restricted stock units to pay off the debt in one fell swoop.

After paying down their credit card debt, the next step was to build up their cash savings to cover roughly six months of expenses, an amount that Tim & Susan felt comfortable with. We discussed how, once they become entrepreneurs, this number should be increased to 12 months of expenses to account for more variable income. 

We instituted a sustainable spending plan, which freed up roughly $1-2k monthly that could be allocated to the rainy-day fund.  Tim and Susan were excited to get off the debt train and start saving for a more financially stable future.

Regarding the rest of Tim’s restricted stock units and stock options, Tim was reluctant to sell any, as the company’s stock had done incredibly well and he expected that to continue.  We discussed how the bulk of their net worth was in in his company’s stock and, should the stock go down, either due to a decline in business or a recession, their overall financial well-being and plans for a new business could be harmed as well. 

This alternative, or bad scenario, conflicted with their capacity to take risk (Tim & Susan had inadequate cash savings) as well as their risk tolerance, which was low for their age. 

Ultimately, Tim agreed to enact a tax-efficient plan to sell restricted stock and to exercise stock options in a tax-efficient manner on an annual basis.  Proceeds would go to their rainy-day fund and a new joint account, which would be invested in low-cost and tax-efficient investments aligned with their risk tolerance and goals.  We coordinated their overall investment allocation with their respective 401ks to create a tax-efficient portfolio across all their accounts and assets.

Regarding their goal of starting their own business, we concluded that the more financially stable they were, the more able they would be to take a risk, such as becoming entrepreneurs. Focusing on the little things such as instituting a budget, diversifying their investments, and building a rainy-day fund, would help them confidently shift into more satisfying work when the time came.  Additionally, should they decide to start their own business, we established that Tim’s sale of stock options could help them with start-up costs while also offering a 1- to 2-year bridge before the new business needed to make money.

Conclusion: Boosting Optionality & Financial Freedom 

Tim and Susan worked incredibly hard to get where they are in their careers. However, this left them with little time to manage their financial lives, and their lack of a financial plan left them uncoordinated and disorganized.  By taking them through our financial life planning process, we were able increase the robustness of their financial reality in a way that was mindful of their long-term aspirations, such as becoming entrepreneurs and opening their own business.

Are you looking for support in planning a shift into more satisfying work?  

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Disclaimer: These case studies are for informational purposes only. They are based on our experiences with real clients; however, all names and identifying information has been changed to protect their privacy. Financial planning is a personalized process and the recommendations created for you may be different.