The BE WISE Planning Strategy
By Joyce L. Franklin, CPA, CFP®
What motivates you to get up each morning, excited to greet the day and make a difference?
To have a satisfying life, it’s important to identify your passions. This process, in combination with the effective use of your financial resources, is crucial for personal happiness. This white paper addresses the BE WISE Planning Strategy™ while my books Life, Liquidity & the Pursuit of Happiness (for executives) and Startup Wealth (for entrepreneurs) address financial planning before and after a startup liquidity event in more detail. The findings in this paper are based on research and interviews with more than 65 leading high-tech entrepreneurs, executives, and notables who shared their insights about personal and financial fulfillment.
I call the process of discovering and planning for life before and after a wealth event
BE WISE: Before Event, Work, Identify, Strategize, Execute.
BE – Before Event
Create a business plan incorporating your goals for your company and your career, which will likely include some of your personal values.
W – Work
Build your company. Consult with a CPA or comprehensive financial planner about tax planning with your equity awards. Entrepreneurs: Strategize the ideal corporate and equity award structure, and hire an attorney to create contracts, early exercise elections, and vesting schedules.
I – Identity
Identify what’s important to you. How will you spend your time if your company is sold, acquired, or goes public? Don’t be caught without a plan.
S – Strategize
Determine if your assets will support your goals and values. Carve out a “Maintain Bucket” for long-term lifestyle needs. Allocate excess capital into “Risk,” “Give,” and other buckets, if needed.
E – Execute
Implement and monitor specific action items as a road map to achieve your goals, preserve your wealth, minimize risk and taxes, and pass along assets to those you care about.
Before an IPO or liquidity Event—Create a personal life business plan incorporating your goals for the company or your career, which will likely include some of your personal values.
Work—Launch or build your business.
Identify—Identify your unique values and goals.
Strategize—Crunch the numbers. Put your goals into time-bound, dollar denominated terms and determine if your assets will support your dreams, values, and interests.
Execute—Create a plan and take action.
While the last two stages are chronological—your plan is analyzed, then action steps are created and executed—Work and Identify should happen together.