Maximize Your Executive Compensation | Tailored Wealth

All right, I think we are good to go now, Jacob. Not without a couple of technical issues, but welcome everybody. It's good to be here. Jacob and I are just crossing all bounds with the technology stuff that we're trying out here. So we're having fun along the way. You guys are all— guys and gals are witnessing it live with us, which is always fun. We're doing this live, but we're attempting to do a little recording as well. So let me get things kickstarted here because we are at our starting time. So welcome, everyone. Thanks for joining us. My name is Dan Pascoe, and I am, I am live here in my office here in southern Connecticut. I am the founder of Tailored Wealth, where we help business leaders and executives to take control of their finances and really turn their income into the life that they actually want. Before starting the firm, I spent most of my career actually in corporate leadership roles. My last role was as a chief revenue officer. So, shout out to all my go-to-market leaders out there. I do know how complex compensation, equity, tax planning can be when you're in an executive role and you're moving fast. So, that's one of the reasons why I got into and started doing what I'm doing today. And I'm super pumped to do this discussion because I think Jacob and I are going to be able to provide two different perspectives, but I want to introduce introduce my good friend and someone who I wish I had known, Jacob, years ago when I was in a corporate role, a true expert on negotiating compensation and maximizing career leverage, Jacob Warwick. How are you, brother?

I'm doing well, and, uh, thank you for having me, Dan. You know, it's funny, we got together at Go-To-Market Summit in Austin last year, and we were laughing because we're such a yin and yang combo where I'm like the income guy. I help people make more income, drive their compensation up. I also have a go-to-market background previously, which is I do what I do now, help people go to market for their career, so to speak, and then demand more compensation. And what's funny is the more money you make, the more money you spend in taxes and the harder it is to actually keep. And some of my clients are paying 60% a year. They're paying hundreds and hundreds of thousands a year in the Bay Area or in New York City or these high-tax climates. And you need to have some navigation of financial planning to, to nail that. So it's not just about making as much as you can, it's about keeping as much as you can and being protected with that. And that's where Dan and I really are the yin and the yang here. So we have a handful of stories to share with you and some scenarios to walk through and how we'd be thinking about it. And then we welcome some audience participation. Now, Dan, I know you had a couple questions for folks, and I'm curious, where do you want to— do you want to lay up a couple softballs for us?

Yeah, you know what? Let's just— let's do the logistics. Let's do the housekeeping first. So we're going to keep it tight and tactical. So we're going to be about, you know, 50 minutes of total content, and we'll, you know, we'll stay on. As long to, to answer questions. But most importantly, um, we're gonna get a chance to, uh, answer questions that come in in the chat. So I got my technology issues figured out and I can actually see the chats. So, uh, Chelsea is here from, uh, Jacob Warwick's team and Charmaine is here from my team. So they'll be putting different links in the chat throughout, and then I'll do my best to, uh, to kind of queue up questions as they come in. So feel free to drop your questions in the chat anytime and, uh, we'll do our best to get through them all. We'll probably have some helpful links and resources that we can share in the chat along the way. Especially based on, on questions that come in. But we're going to start things off, as Jacob mentioned, with 3 questions. And I want you to just kind of throw these in the chat. Okay. So just first question is, have you ever felt at any point in your life, in any facet of your life, that you're leaving money on the table? Have you ever felt that you're leaving money on the table? And I want to see, you know, what kind of kind of thoughts we get in the chat here. So, uh, Pete was lying. Yeah, yeah, we'll, we'll see, we'll see how honest it is. We'll see how honest it is. We've got, uh, there's a slight lag to this, so I know they'll start coming in now. But, uh, Pete, what's going on, brother? Good to see you as well. Thanks for, thanks for sharing that. I see Chelsea is sharing some, uh, some LinkedIn links. I'll share mine as well. Um, all right, we're getting a bunch of yeses.

Um, And for anyone—

hell yeah, 100%. Yeah.

If there's anybody that says I can't see the chat, so I just— I feel like there's one smartass out there is like, no, I never leave money on the table. My, my comment to that would be, how do you know?

Yeah.

How do you know? I'm curious.

Well said, brother. And we don't have any smart— everybody's being totally honest. It's good. Yeah, we got no smartass.

Honest. They're like, we're all missing money. Help us make more.

There you go. There you go. All right. So the second question, we're going to move right along. Keep the first ones coming in. So I'm getting a bunch of yeses, some hell yeses. On a scale of 1 to 10, how confident are you in your current compensation package? So how confident are you in the current package that you have today? So let's, let's see what, what we've got. What are we working with, Jacob, on a scale of 1 to 10? All right.

Yeah, I'm curious what you see here. And also, if anyone says 10, how do you know?

I'm curious. There you go.

I very much push back on the general benchmarks that are out there where a lot of folks probably on this call too, they'll look at compensation reports, surveys, studies from their industry, and they'll say, oh, I'm in the 90th percentile, right? And I just wonder how you're so sure that that's the 90th percentile. It's an average of the mean here, like, why couldn't you be 150th percentile? Like, what's it— stop— what's stopping you from getting there? And how do we create a rising tide to support everyone in the room today?

Yeah. When you chat with folks, as these are coming in, Jacob, do you find that folks that are, that are utilizing your services, do they feel like, uh, they always come in and say, I'm underpaid? Do they feel like they're at market? Do they usually come with some sort of background?

They usually anchor off of objective, quote unquote, objective data that they see elsewhere. They compare amongst their friends. Comparison is the thief of joy, I like to say. And also what happens is if you subconsciously or even consciously anchor yourself to someone else's number, you're also limiting yourself. So when you look at benchmarks and you say that's what someone should get paid, all of a sudden you're anchoring yourself like, hey, CROs at this stage make $350,000 base. So I'm going to try to get as close to $350,000 as possible, right? It's like, well, how come I have CROs that are knocking down $450,000 or $500,000 or whatever? Like, what does it take for that to happen? Well, you got to eliminate that artificial barrier and then you have to persuade those that are hiring you why you're worth that extra salt and move away from that objective criteria.

Yeah, well said. Well said. We're getting a bunch of 7s in here, which I kind of expected. You got people that are feeling good. Maybe right now, and, you know, maybe some folks don't necessarily even want to answer that question, which is fine. So, then the last one that I'll throw out there is what's one question that you hope we answer today? And I'm not going to wait around and wait for those answers. I'm going to kind of cue those up as we go. But what's one question that you hope we answer today with Jacob Warwick being the guy that helps you to get the best compensation package possible and I being the person that can help you to sort of optimize it and use it to live the life you desire? So, I want to get some questions coming in throughout. And as I mentioned, we're going to pause as we have the— throughout this discussion and kind of take those questions in. So what we thought we would do is, you know, Jacob and I could just talk about our services all day, talk about what we do. But I think it's a lot more impactful for you all if we did some case studies. So what I'm going to do is we're going to— we've got a couple of case studies that are prepared and we've got some questions that have been sent to us already ahead of time as well that we'll, we'll try to answer throughout the program. But we're going to go through a couple of case studies. Jacob's going to walk you through what the situation is.. And we're going to talk about how you might think about that from a compensation perspective and then just an overall wealth management perspective. So, you ready to get into it, brother?

Yeah. And I actually, I found a recurring theme with the first two case studies as well that I think will resonate with the audience. Do you want me to just hop right into it, Dan?

Let's do it, brother.

Do you want to set me up?

Let's do it. No, let's do it. Let's go right into case study number 1. And I'm already seeing some good questions come in, so we'll make sure we get to those along the way.

I'm looking forward to getting to that. So there's a, uh, there's a fine line here between staying at a company too long and jumping around too much when it comes to perception. We know that executives that change jobs more often tend to get paid higher versus those that stick at one company for a long time. Now, sometimes that's even true when you make a lot of money. So I have a client, 7-figure earner in Washington State, working for a large tech company. You could probably guess. Which one it could be. There's only a handful up there, and they've been at that company for several years. And the whole consensus at the organization is that there's golden handcuffs. You'll never be able to make this kind of money somewhere else. And that's bullshit. First of all, they've been there long enough. I actually know that their price in market is somewhere between probably $2.5 and $4 million a year, and they're actively around the $1 million a year mark, but they feel like they're being overpaid. And what's interesting is if we go to market with their career, we explore some other opportunities, maybe in San Francisco, maybe other opportunities in Seattle working remote. There's a big opportunity to 2 or 3x this individual's wealth. Okay. Now, the reason I think this case study is interesting is that, one, it's very difficult to be in a position where you're making a lot and you don't want to risk it. But there's also an opportunity to make a lot more. But that opens up some risk. And then the other piece of this that I thought was interesting for you to think about, Dan, is that we're going from a state with no income tax in Washington, right, to a state with lots of income tax in California. And there's an interesting component here. So this particular client has a spouse that is also a high-income individual but can work remotely. And so part of the advice that I provided, which might be a little different than what Dan provides, is, hey, Why don't you move to Incline Village or someplace in Nevada, right? Reno, Incline Village is a little bit more expensive, but it's beautiful. And then commute down into the Bay Area and just stay in a hotel for 3 days a week, make $4 million a year, but not pay income taxes on that. So I think that's an interesting perspective as we think about planning wealth. It's not always just about how can we maximize the compensation side, but it is how do we protect that earning? And then the other piece of this is you can, if you are actively in a position and you are getting paid well, that's a great time for you to put feelers out. Now, it might be that you're not sure you want to leave. That's, that's fine. Like they say, it's easier to find a job when you have one. I think this is mostly a myth because it's mostly psychological. But for a lot of folks, if you have a job, you could put feelers out and you have a lot of leverage to explore what's it going to take to pull me from this relatively safe million dollars a year Is it going to take 2? Is it going to take 3? Is it going to take a difference in quality of life? Sometimes it's not always about more money. Sometimes it's about less. It could be that we want to, in this case, negotiate a lower base compensation and a higher equity compensation depending on the type of equity because of the high income tax potential depending on where we live. So I'll just lay that out for a moment and just kick that over to you, Dan. What are some of your thoughts on high net worth individuals moving from state to state and how to maximize that savings.

I love the discussion. I love the points. I love the option that you've laid out for this individual or this, this family, really. And I think it, it draws on a theme that I think we're going to probably chat about a few times throughout this discussion, Jacob. And it's all about, you know, assessing options and then making educated decisions. And I'm going to get into sort of how I think you do that. To optimize your life and live the life that you desire. So the scenario that you just laid out, we can very easily do a tax projection to show you what are you going to take home each year more by living in Nevada versus living in California, okay? And then we can very easily project that out over the course of, I don't know how much time this family plans to, how much longer they plan to work, but we can project that out over X amount of years. And then you can project out, okay, well, out, that extra dollars gets invested in the market and we get compounded growth, etc., etc. So we do all those, those calculations to figure out and say, okay, this is an X number move for you. This is what that equates to in real dollars. So is it worth it to you from a lifestyle perspective to have X more when you go to retire to do whatever your lifestyle looks like in retirement, or, or, you know, donate it to a charity, or, you know, give back to family or loved ones, whatever is important to you. Is that move worth it for you? And at the end of the day, you know, having it all laid out, having a plan and having a model that projects all of that and knowing that I've got this strategy that you just laid out, Jacob, that is actually an option for me is a really, really high-level and educated conversation to have. And you and I can't answer that question for your client in this case. Right. But what we can do is we can give them the idea like you did And what I could do is I could then go model out and say, this is what it's going to look like in real dollars. And then we can take those real dollars and say, what does that mean for your actual life long term? Because as I stated earlier, it's not necessarily just about maximizing the dollars on the statement, so to speak, or the dollars in your bank account, but it's about using those dollars to live the life you desire.

Yeah, and I'm fully on board with that. I actually noticed some of this myself where I was looking at the housing market in California as an example, which is pretty damn expensive, especially when combined with taxes. And, you know, so let's say you find a decent place to rent for $4,500 a month for your family. Like, that's a pretty good, pretty good chunk. On top of that, you're paying 13% on all your taxes. My condo in Tahoe is $3,000 a month, and I'm saving a couple hundred grand a year on income tax. And so I actually save enough on income tax to purchase a place in California in addition to that. So there's just some interesting components to consider when making a move like that. So that was one kind of consideration. Not only is it important to change jobs, but to consider the location of that, whether you're working remote or not. Yeah.

And I think to this day and age, those considerations, you know, maybe weren't as available 5 or 6 years ago. And, you know, the, the dawn of remote work has really changed a lot of things. I'll probably get to it later, but I think it's really changed how people want to retire as well. But the ability to work remote gives you a lot more optionality, right? And you can, you can do some unique and strategic and innovative things with the tax code, especially when it comes to state and local taxes. We call those SALT taxes because SALT, there's such a big, big gap in, you know, the two states that you mentioned, for example.

Yeah, and that's something I get a little bit less into is the salt of it. Now, do you want to— are there any questions for this particular?

Yeah, yeah, so not necessarily in this scenario. I got two that came in for you. I'm going to summarize these because I think these are kind of right up your alley, and I think I'm actually interested to hear your take on these. So, the questions were around how do you address— I'm assuming this is going into a compensation negotiation— how do you address when asked with what are your salary requirements? That's number one, and then, or how do you handle what's your desired compensation? So the requirements and desired— I've been asked both through the course of my career. I see clients get asked those questions a lot. How do you handle that one, Jacob Warwick Warwick Warwick?

Yeah, it's funny, I get that question a couple times a day.

So yeah, sure, sure.

Come on guys, throw me something new. Uh, I do have an article on this, on how to answer that question, which, which Chelsea— if I think it's the, uh, the fourth one in the blog, uh, the how much money do you want type question. Now what's funny is it's just a couple of words different than an illegal question, which is how much money have you been making, right? Right.

Which I think is interesting.

So there's just a slight nuance like, hey, share your cards. You know, if we are using a poker analogy, it's playing with some of your cards revealed, right? So typically I advise my clients not to anchor ever in the process, and it can create this awkward tension between you and the recruiter or hiring manager or whatever. It feels like it could derail the conversation. So fortunately, most of my clients tend to be relatively assertive and confident, and if they don't have that, we give that to them for this discussion. But I might say, Dan, you know, I appreciate that you're asking. I typically don't talk about compensation until there's a written offer in front of me. It sounds like it's a little too early to get there. Probably some other details of the role we need to scope out. I'll need to talk to Chelsea next. I'll have a couple of conversations. You know, is there any hesitation in moving forward without that information right now? Right. So that's one way you can do it. You could push back. Now, another way you could say, I suspect you're asking because you want to make sure we're within range. Now, at this point, I don't have a hesitation that should we find alignment, we're going to be a good fit for one another and you'll put together a competitive offer. However, I want to be mindful. Do you have a range that you're hoping to stay within? Yeah. And get them to speak first. The problem with that angle is that you'll have to respond to it. So if you're disappointed or you're excited, you have to approach that with a little stoicism or say, hey, we're within zone of continuing the conversation and moving forward from there. Now, even when they do anchor a range, it's a bit low. You can still move that range up. I had a couple of clients last year where our top-end range— it was weird because it happened 3 times in a row for the same or relatively same metrics, where the top end of the range was $600,000. And of these, one closed at $1.4 million the first year, the other one closed at $1.1 million, and another one closed at $1.2 million a year. So all of those deals were doubled when the stated range was $600,000. Now there's probably people going, oh, that's bullshit. You know, how do we do that? Because we really want to get into the specifics. Well, in this case, we were taking a senior director role and upleveling it to a VP role. So essentially taking the interview process and the scoping process, if you're thinking about it as a sales process, and we're expanding the pie of the opportunity because my clients tend to be more horsepower than a lot of positions may have or need at the time. And so our job is to frame that you're not just getting Jacob, you're getting Jacob plus this expanded pie. And we can expand the value for ourselves. We can start to break compensation ranges and increase that. So if you get a range first, don't let that anchor you down. Don't share a range up front. If you go back and forth, they say, look, Dan, I really just need a number. Quit breaking my balls, right? Like, this tends to go this way. It's pretty rough. You say, look, respectfully, I don't want to have this conversation until we're later. Is that going to stop this from moving forward? And you can be more, more respectful and direct there. And so you have to push back on this. And you'll also notice less mature recruiters, let's say earlier in their career recruiters, will push on this a little heavier. Than a more mature and seasoned recruiter.

Interesting.

So a stronger, a more experienced headhunter will spend more time getting to know Dan, your expertise, what you can bring to the table, and less time focused on compensation and some of the tactical details. Now, the problem is 9 times out of 10, you're going to get a less experienced recruiter. So you're being inundated with that question all the time. And then you'll know a great recruiter when you see one. It'll be a different experience. So just keep that in mind not to gaslight yourself just because of the velocity of attention you get to lower an ask your number versus the quality of attention you get when you work with a more seasoned executive recruiter.

I love it. I love it. Well said. Really good questions. Let's keep them coming. Keep them coming in the chat. And with that, I think we should— Jacob, let's move on to case number 2. So why don't you frame that one up and we'll have a— we'll have a nice chat about it.

So similarity with this, one client was at a company for 10 years, a tech company in the Bay Area. So over 10 years, compensation was admittedly pretty damn low in this instance. Now they were about ready to quit their, their job, but we knew a new CEO came in and they— if when anyone sees this chaos happening, like a new executive leadership team comes in, board members come in, investment comes in, instead of panicking, right? That's a great opportunity to be proactive. So my client wanted to quit. I asked them to bear with it just a little bit longer and create a succession plan with their VP. And eventually the VP moved to another position and we followed that VP suit, which created a bidding war scenario between Company 1 and Company 2. Right. So that was one way we could drive the comp up. We hedged our bets and we created options. Now, the unique part of this story for someone like you, Dan, is we went from a traditional RSU-heavy tech company to a— let's say I say traditional, let's say to a more old school Fortune 500 type compensation plan. Which is a different type of equity draw, long-term incentive plans, and then a— there's probably a term for this that you know that I don't— but a almost like a falling-off compensation plan. So the first year we went from $600,000 to $1.4 million, got a huge signing bonus, a near-million-dollar signing bonus in this instance. Second year, we split the signing bonus year 1 and year 2. So it was about half a million year one, a little bit less year two. So compensation went from about $1.5 million to $1.1 million to $800,000, falling off. And so that creates an interesting tax climate that I would love to hear your thoughts on, because there could be tax loss harvesting. There's a way to— as we enter the negotiation, we strategically split the signing bonus over multiple. There's also a reload option. To go from high cost of living to low cost of living and what implications that has on the tax climate. So I'm curious what some of your thoughts on this tapered-off compensation could look like when it comes to tax planning.

Yeah, there's a lot to unpack here, so I'll try and keep it as brief as possible. We already covered the relocation piece, so I'll stay away from that for right now. But generally speaking, when it comes to taxes, first and foremost, the tax code is written for business owners. Okay. It is. So there's limitations when it comes to W-2 types. You know, a lot of my clients, Jacob, are W-2 level executives, and a lot of times they'll have some sort of side hustle or they'll have some consulting or they'll have a business that they're doing some work in, and that provides some tax opportunities. Most folks, you know, have a pretty good idea of how that works. So I'm not going to spend a ton of time there. But the concept that I would want to stress is really two points. When it comes to any type of equity, The way that RSUs get treated from a tax perspective are very different than the way that ISOs gets treated. Okay. So you have to have a plan. If you have equity, you have to have a plan and that needs to be baked into your tax plan. Far too often, I— times I see folks getting shares from their organization, whether it be ISOs, RSUs, ESPPs, straight equity, they all have different nuances from a tax perspective. So you have to have a plan in place that's going to model that out. The key thing here though to think about is timing. And I actually think timing is the biggest opportunity for W-2 level executives, okay? Like I said, there's a lot more strategies that can be done when you've got some sort of business ownership. But timing is the best one I think about from a, for a W-2. And you mentioned that you negotiated splitting the bonus up, which I love that. But generally speaking, what I would always advise to anyone out there is, if you have some form of abnormal income year on the upside or the downside, by the way, that is a tax planning opportunity. Okay. If it's up or if it's down, and I'm going to give you a couple of examples. So if you take on a big signing bonus or you just get bonused out by your company, if it's a smaller firm and you know, you're in the C-suite and there's a little bit more flexibility and maybe a direct relationship with the CEO, you might be able to negotiate even as an existing employee, to be able to space out bonuses. And you might be able to get that done. From, from a larger firm perspective, you might be able to negotiate the bonus being split on the way in, but it's unlikely that you're going to be able to get some sort of unique bonus treatment throughout the year because they've got hundreds of other people that they need to, that they need to.

I will challenge you on that.

But, okay, good. You—

we still can. We still can. Don't let that— don't let that stop you. But it is unlikely, to your point. But we see special circumstances for exceptional talent all the time, and we have to make that case. So if you need to break a Fortune 500's boundaries— now, a lot of people on this call actually make those rules, so they should know they can be broken, right?

Yeah, good.

Don't listen to your own authority. Like, you made those rules, you know who you have to influence to break them. So while you're absolutely correct in that in most cases it will be difficult, my argument for you is I just don't know how to do it yet.

Good point.

You have to be more influential.

All good points. Yeah. So listen, like that, then Jacob's the guy to talk to about that stuff. But, but, but absolutely. But, but let me give you a couple of thoughts around sort of volatility in income. Okay. So if you're having a big year from a, from an income perspective, a couple of things to think about. You mentioned tax loss harvesting. That's a topic we're talking a lot about right now because there's a lot going on in the markets right now. So there's an opportunity to do some tax tax loss harvesting right now. Um, and if you do that, you know, it's not going to amount to a lot during the year, but if you do it consistently over time, it will add up because you can carry over losses. But, um, the, the one that I don't see enough executives doing, Jacob, and they actually think it's more for like ultra, ultra wealthy elite, is, is having a donor-advised fund. I'd call it a DAF. Okay, so a donor-advised fund is essentially the opportunity to contribute to your own personal fund, especially if you're philanthropic. And then you're going to use those funds and you're going to choose how they get donated to specific qualifying charitable organizations. Okay. The nice thing about donor advised funds or DAFs is that you get to control the timing. Okay. So let's just say what I typically see is the executive that says, oh yeah, Dan, I give, I give X amount to charity A, B, and C each year or something to my alma mater or whatever the case may be. I'm on a couple of nonprofit boards, so this one's near and dear to my heart, but, but they just do it willy-nilly. They do it when they ask for it, or maybe they're doing a regular contribution each year. Well, I would challenge you, set up a donor-advised fund, okay? Contribute to that regularly. And then if you have a big income year, contribute more that year, okay? Because that's going to lower your taxable income in that year. You don't actually have to give what you donated to the fund out that year. It's going to grow for you tax-free, and then you're going to be actually more strategic about what organizations you, you actually contribute to. So it's a win-win. It's a win for the taxpayer and it's a win for the charitable organizations. Okay.

And it sounds like you're being hyper-philanthropic and you're actually spending money just to give to someone else instead of taxes. But I think the point is you'll also lower the bracket you're in potentially and hit a different tax code as well. Depending on how much you donate. Is that correct?

Absolutely. And, and it, it plays into a broader strategy, right? So every individual situation is unique and different, but this is just one that I just see folks don't think about it. I actually met with a friend who's in, um, the donor advised fund space last week, and he said to me, Dan, people think all the time that this is for like the hyper elite wealthy. This can be, I mean, you can start donor advised funds with like a couple thousand dollars. I mean, it's very, very manageable, and not enough folks are doing it. And then the second thing that I would say on the downside— so I'll share one on the downside. You and I both deal a lot of times with executives that are in between jobs, right? So sometimes you may have a down income year. I'm working with a couple right now that they're, they're out of work and they're, they're just about to get back into work, but they've had a little bit of gap. So likely 2025 is going to be a lower income year for them. That is an opportunity to to further your, what I call, tax diversification. Okay? And tax diversification, a lot of folks know what like investment diversification is. So, spreading your investments across different asset classes. Not enough folks focus on invest, tax diversification, I should say. And the tax diversification is essentially getting money into 3 buckets. The taxable bucket, which is just like your after-tax savings. The tax-deferred bucket, which is like your 401 and your IRAs. And then the future tax-free bucket, which is the Roth vehicle. There's some insurance products that you can structure effectively to become tax-free. Health savings accounts would fall into that bucket as well. And so when you have a down income year, you've got the ability to convert some of those assets. For example, IRA money or 401 money, you can convert them to a Roth because you would be potentially in a lower tax bracket, have lower taxable income. So you're essentially getting the same product, but you're getting it at a discount. So anytime you have that lower income year, you want to optimize your tax situation for the future. If you have a higher income year, you want to find ways to reduce it. So that's, that's generally the concept of timing when it comes to optimizing taxes for W-2 level executives.

Yeah, we may need to get into this on another live at some point, but I do help folks negotiate away from W-2s into 1099s for their own business purposes, for tax savings reasons in a lot of ways. And that's where we can start to introduce the concept of mega back backdoor Roths and those types of pieces to really masterfully plan your financial situation. Again, I would leave that into the hands of Dan here.

But yeah, no, you— I like that. I need to send more clients to you to be able to do that because it provides a lot more opportunity. The mega backdoor Roth, most folks can take advantage of, especially if you're at a bigger firm. You know, another mistake I see people making is they don't know that they have a Roth Roth 401 available to them at their firm. Just go ask your benefits coordinator, do we have a Roth option? If you do, you should be taking advantage of it because likely you're— you have more assets in the other two buckets than you do in that future tax-free. And I'm a believer that tax rates are likely going to be higher in the future. I think it's probably difficult for it to say that they're not. I'm talking just the future in general, not in the near term. Um, so that's something that we're talking to a lot of folks about. So I know I went on for a little while about that, Jacob Warwick Warwick. So, uh, That was good. That was good. Let's, let's—

I was going to— I was going to say just one last point on the entrepreneur piece. I have a lot more fun giving BMW $100,000 than the IRS. Like the tax vehicle, like the vehicle write-offs and the deductions with that. There's a reason you see every construction worker or construction business owner with a brand new $100,000 truck every couple of years, right? Because it's essentially give that money to the government or take it for your vehicle. And there's a reason why you see a lot of people driving G-Wagons, because it hits the vehicle weight rating and it's a tax write-off. It's not because people like to spend $300,000 on, on cars, but $300,000 off your tax bill will knock the bracket down quite a bit. You can plan those payments out, you can get it on 0%. And as it was a couple of years ago, there's a reason you see people doing that. And it's not because they're hyper wealthy necessarily. It's mostly because of tax incentives and those reasons. It's also why there's LLCs in Montana where there's no sales tax and people live in Florida as an example for income tax purposes.

Yeah, you just started to hit on and you reminded me, we are launching next week the tax reduction checklist for 2025 for W-2 executives. And so, I love your strategy. I would be talking to you too and I would want to learn more about and maybe we do cover it on another call, how do you negotiate for 1099 versus W-2? W-2, because that's a really interesting concept to unpack.

You usually make more money.

You usually make more.

You know why you make more money on 1099? Not just the tax savings, but the employer saves money paying you.

Right.

Right. So the employer pays less employment taxes. If I hire Dan on 1099 instead of W-2, on the average W-2, I pay 17% more. So let's say I pay Dan 10% more, but I do it on 1099. We both win.

Right.

As an example.

Right.

So there's a lot of nuances there that if we consider how do we expand the pie for everyone, right? Those are some things to consider.

Yeah. And what I was going to say is I just put a link in the, in the chat. We're launching our tax reduction checklist for 2025 for W-2 executives that comes out next week, conveniently on Tax Day, April 15th, because frankly, just like you said, you've gotten asked the question up front several times today. I've gotten asked several times today, how do I reduce my taxes this year? And so we put together a checklist specifically for W-2s. It doesn't get into all the business ownership stuff that Jacob's talking about because there it becomes a very, very extensive guide. But specifically for W-2s, there's 7 strategies that we highlighted for 2025. And like I said, you can get on the waitlist right now and we'll send that out to you when it launches next Tuesday.

Yeah, I think we should also just for sake of discussion, Dan, put a guide together on how to be a 1099 and W-2 at the same time. Sometimes, like, for example, I'm a W-2 employee of myself on an S corp, right? So we can get into those. You're like, oh yeah, like, let's not, let's not get into the weeds too much. But there is a strategy where you pay yourself a little bit of each. So you take your deductions here and you take your tax payments here so you don't have quarterly, all kinds of stuff we can get into. So just be open to it.. And we'll go into some details on that later. Now, I also want to talk about clients that aren't necessarily millionaires, because I'm sure that folks here would like to hear about more common strategies as well, not just moving millions of dollars and relocating. Sometimes like, they're like, Jacob, I don't care about making tens of millions right now. I want to make $200,000 more in the next couple of years.

Right? Right.

I think totally reasonable. And so I find a trap that this happens quite a bit, especially as you work with go-to-market executives, Dan. You may see this as common too, but the average tenure of a go-to-market executive is pretty damn short. It's like 16 months.

Yep. Yep. I used to be in that role, so I know that stat very, very well.

Right. And I also like to say looking for a job is like chewing glass. Like, it's kind of the most miserable experience. And if you know you're not long for this world, no matter how great of an executive you are, it would behoove you to be a little bit more proactive in looking for work. If you've been in a job for 6 months, you should probably be looking for a job just in case, or at least planning out that. So not just financial planning, but for your own sake. When you have a job, a W-2, not only do you pay the most taxes in the entire country, but you're essentially handing all of your family's eggs in a basket and you're handing it to one person and hoping they don't break it, knowing damn well that the bigger the company you work for, the more they break eggs for fun, right? And by fun, I just mean profitability. That's how capitalism works. Like, every major company shaves lays, you know, 5 to 10% of their staff off each year. And if you're an executive and quote unquote a tall poppy, they're going to scrutinize your line item a little bit harder than somebody who's not. So you need to be mindful to protect yourself and always be looking. Now what happens, and this is a case with one of my clients here, they're out of work every 12 to 18 months, and that happens 3 or 4 times. Not only are you missing out on that, you're never hitting your vesting dates, right? You're constantly looking for work. The perception of what's happening makes it look like it's your fault, even when in many cases it's not, especially if we're working with startups or big macro industry changes or COVID happens. There's a lot of reasons why you might be changing jobs frequently, and the negative perception is always on you. And what also happens from a mindset perspective— so there may be some executives feeling this right now— from a mindset perspective, you start to second-guess yourself. You start to say, am I as good as I think I am if I can only hold down a job this long? Or it's so— I've applied to 1,000 jobs and I've only gotten 3 interviews and I'm always coming up second. That when— as soon as that mindset and that self-doubt starts creeping in, you lose leverage. It becomes harder to nail down a leadership position because you're no longer exhibiting the traits of a great leader. So one, being proactive and having that financial plan can give you more leverage. Now, in this particular instance, I did have a client who was out of work for a few months after a very short tenure. I want to say it was 6 months. So talk about no leverage, beat up, the perception is you can't hack it. Also moving up in title to a C-suite role, they're thinking, oh, maybe she's not cut out to be in the C-suite, right? And that started to affect them mindset-wise. And I'm here to say, I mentioned earlier, when you have a job, it's easier to find a job. And I think that's mostly mental, more so mental, because you know your needs are being met. This is a Maslow's hierarchy of needs thing. You know, you're being met, so you negotiate more confidently. Now, you can still come to interviews with that if you've got a smart financial plan or you just are very comfortable taking risks depending on the situation you're in. So in this case, I just asked my client, hey, pretend you already have the job. Pretend you're not out of work. Pretend that wasn't an issue. You know, communicate more forwardly. Talk about the lessons that you learned, not the hiccups along the way or the short tenures. And use language like, you know, I'm glad you're talking to me. One of the reasons I'm choosing to talk to you and a couple of other companies is because I'm looking for a place where I can be for the next 4 to 6 years. Right. Right. I don't think my career can handle a couple more short tenures like that. I'm sure you understand. So it's getting in front of it and taking it kind of in your own way. And the result of this instance was an actual increase in compensation, about $50,000 from previous. Kept the C-suite title and moved into what they call the two comma club, which is a million dollar earner per year kind of situation. So even though everything was stacked against you, there are still outcomes that can move your career forward. So I just— this is more of a, I guess, a life coaching moment, right? Don't be too far, like, in your own way. There's a lot of macro changes happening to the market, and it's often so easy to beat ourselves up and compare ourselves to everyone else in the room, but that will not serve you in any way there.

Yeah, I love the language that you coached your client in that situation to use. The word that made them— that stuck out to me was, I'm choosing to speak with you. I thought that was really interesting choice.

That's a dynamic change. I mean, when you're out of work, like, I equate the visual— the visual I think of is Oliver Twist. Right, where he's asking for more food, like, please, please, anybody give me food. And I got— I don't know if that's politically correct to say, but it feels like when we're looking for a job, we're just beaten down and we're submissive. Who wants to hire a submissive leader, right? Right. So like, if you're begging or coming across as desperate or putting the green circle on your profile, like, you are signaling weakness. That's just the way it works. And weakness and leadership should not be synonymous. Right? So we have to find a way to keep our mindset in the right direction. I'm not suggesting being arrogant or not self-aware who you are, the situation, but we focus more on a growth mindset and moving forward and forgetting the past. Like, you're gone with that. Like, we're done with that. And we cannot get mired into that. Now, what I find interesting about working with someone like Dan is with a smart financial plan, you can weather those hiccups and you can maintain your leverage. Like, sometimes I'll have clients that are out of work for 2 years. And they are pulling from their 401 and they're doing what they can to survive, but they have the privilege to be able to go 2 years without work. That is a— that's actually a good position to be in, especially compared to your fellow American or wherever it is you are. I promise you that is a privileged position to be in. Right. So we can have some confidence that you've made great decisions and can continue to negotiate from a position of strength where you choose your path versus settling for the sake of paying the bills. And a smart financial plan can help you get there in addition to a strong negotiation plan and mindset moving into that.

Yeah, I love this concept. And again, I agree with you. This is a little less about financial taxes and X's and O's. It is a little more life coaching. But I'm going to share with you a concept that I think makes sense for this part of the discussion. You talk about, you know, having some time outside of work, being able to support that. You know, we'll oftentimes do calculations when we run a financial plan for a new client. We'll say, okay, well, what is your emergency fund need to be? And it's unique and it's different to each individual and each family. And a lot of it is based on, to some degree, your lifestyle. But it's also based on what's the volatility of the role that you're in, right? And what has been you know, your track record so far, and then, you know, what are we projecting out as your risk profile moving forward? But when you're out of work, there are some really, really interesting opportunities that start to present themselves. So, a concept that I'm talking about every single week now, I've started calling it hybrid retirement. And it's essentially the idea of, I get a lot of executives that say to me, Dan, I want to retire in, or I want to stop doing what I'm currently doing. That's probably a better way to say it. Um, in whatever the timeframe, 5 years, 10 years, 7 years, 6 years, whatever the case may be. But I'm not ready to just go like sit on a beach somewhere. I want to still be active. I want to be doing meaningful work, but I want to be doing it on my own terms. I want to have flexibility. I maybe want to do things that are important in my life outside of work, whether it be family or, or just causes that you're passionate about. And so, we help to build a plan for hybrid retirement. And a lot of times, that encompasses some sort of passion project, that might encompass consulting work, it might be some fractional work. I know you know this, Jacob, but the rise of two things have really promoted this concept over the course of the last 5 years. It's remote work and the ability to work wherever you want, and it's the ability or the need and folks are really looking for fractional, very focused, very specific skill sets. So, those types of opportunities are more available today than they ever were before. And I've seen a lot of executives have a really, really sort of life beneficial and really enjoying and high quality of life transitioning out of the day-to-day grind and into something that's maybe a little bit more part-time, maybe a little bit more flexible. They're doing it on their own terms. And that looks different for each individual in each, each situation, but it requires planning. And again, all of this stuff can be modeled out in the software to show you what are you earning now and what can we project that you'll be earning, albeit likely, as we mentioned earlier, on a more tax-efficient basis, because now we're going to likely be looking at something that's 1099 work as opposed to W-2. So that concept of hybrid retirement is something I hear a lot of folks talking about. I think it's a really, really cool opportunity. I actually wrote an article on it. And, you know, if you want to grab that, I'll put my links in the, in the chat and you can get on our newsletter. And we've talked about that concept a bunch. So what are your thoughts on that?

I have, I have a couple of thoughts on that. One, I don't, I don't want to come across as hypocritical because I've been living that life for 10 years. Right. That being said, it's not for everyone. I have clients that have millions of dollars in the bank with spouses that make millions a year who say that starting a business is too risky. I need to de-risk this. I'm like, you don't have the mindset to start a business if you have millions of dollars in the bank and you're trying to get into being an entrepreneur, but you don't— you feel it's too risky. Don't be an entrepreneur. It's okay. It's not like we are very much glorifying entrepreneurialism because it can work out right. And a lot of folks don't necessarily or wouldn't necessarily enjoy it. Right. So it's not— I don't want to overly glorify it, although I'm a big fan and the tax savings and everything that you can do is a strong plus, but it's not for everyone. So that's one thought. Now, the other thought is you can't be in both camps at the same time and you can get away with it passively, but sometimes you'll struggle in each. So what I mean by that is you have to commit. Because one thing that happens to a lot of folks that become a founder, let's say they're in their mid-30s, early 40s, they become a founder. They proudly put founder CEO on their profile. You know, they're— they got a couple hundred grand in the bank, perhaps, right? But they— not enough to retire, kind of depending on their lifestyle. And then they decide like, oh no, my company failed after 3 years. I need to go back into corporate. That is a bitch of a transition for a lot of reasons. Like, First of all, people go, what's wrong with you? If you're a successful entrepreneur, you wouldn't be coming back. So you look like a failure. You go from a CEO, founder, fractional committed role to now full-time commitment. And they say, are you going to be able to take direction from someone else because you've been in charge so long? So there's a negative perception on that, too. And then just the entire transition becomes a little bit trickier. I also know a lot of C-suite executives that are full-time, W-2 committed, in office. That look down upon those that force hybrid or force remote work entirely, or those that overly emphasize it for the commitment factor. It's also important depending on your age where that fits in. Whereas if I were earlier in my career, there are a lot of benefits to being in the office and being more close to hybrid. Later in your career, that starts to tailor off a little bit as you get your families and those things, but then you're not having the mentorship opportunities for your staff and you're not being face to face. So your digital presence better be pretty dialed in to be able to exude that executive presence you need to succeed there. But the piece I hear from some like full-time committed C-suite W-2 folks, they poo-poo the fractional folks saying like, you're not committed to my business. There's no way that in 20 hours a week you will be as committed to me at 60 hours a week. And therefore I'm not— this isn't to suggest this is right or wrong. This is just to suggest that this is what you'll be up against perception-wise. Wise, right? And so with your narrative, you need to combat that. So if you are a founder going back to a W-2, your language needs to be something like, where I discovered I made the most impact was when working with a team within these circumstances, which is why I'm choosing to talk to you. Or what I found was I miss being full bore with a team and seeing that growth, right? So there's a narrative change that you're going to have to be mindful of If you're W-2 or fractional or entrepreneur or dabbling in each, how you communicate that publicly is really important to get right. And I strongly suggest that you share less information rather than more information publicly, because that— those triggers everything that you put out into the world will be used against you. If you say you're a $100 million entrepreneur, you won't get billion-dollar opportunities and so on. If you say you are good at a $10 million to $20 million company, you'll never get the $50 to $100 million opportunities. Opportunities. So oversharing either direction can hurt you. Whereas I'd argue that most people on this, this conversation today would be stronger in person navigating their narrative appropriately. And so, Dan, that's why we put together that free LinkedIn tool, was essentially to strip all of the bullshit out.

Talk about that. Let's talk about that tool. I've had a lot of folks that have given me great feedback. Talk about the tool for a second.

Oh, sure. My, my head of AI and I, so Justin Parnell and I trained this tool for a couple months and it costs us like a little bit of money to run, but it's pretty helpful to give away for free. And it just takes your LinkedIn PDF and it basically strips out the buzzwords and takes out a lot of the information that will be used against you negatively in a negotiation. So what you'll notice is those executives who Basically, if you know, you know, that's the language I use. If you know, you know. So like a VP at Google doesn't say anything on their profile.

Why?

Right. Because the VP at Google carries the clout for them. Right. And then they can negotiate accordingly. Like if they're in marketing, the odds are they could be in revenue role or they could be in a commercial role or they could be in a product role. They don't want to overshare what they're doing because it pigeonholes them into opportunities. And we want to expand opportunities when it comes to LinkedIn. Your resume is a little different. That's where you personalize it to a person. So if I was applying for something with you, Dan, I would write a resume that was just speaking to you. But on the high level, my LinkedIn would be high level just to create interest. So really, it's, it's very contrary into how copywriters look at putting together a profile, or how you may be thinking about designing your presence, because copywriters Often, and resume writers and LinkedIn writers often mistake length of content for value, right? So when you're getting paid by the word, so to speak, or your product is this, like our general mindset is more is more and that is good, right? But actually less is more, right? Less is more. It gives you more flexibility. Mark Twain said, if I had more time, I would have written you a shorter letter, right? So we really want to tighten up what we're doing. So that's a little insight there.

Very cool. Very cool. Yeah, I mean, listen, I see it all the time with LinkedIn profiles, just sharing so much information to share. And you've got to be really clear on what your objective is, right? The way that you're going to write it as an executive that's looking for a role is going to be different than an entrepreneur that's looking to sell their services, for sure.

Well, in saying fractional, if you say fractional CMO, you're no longer being considered for full-time.

A real CMO. You're not a full— and I shouldn't say real— not a full CMO, right? Right.

Well, oftentimes that's enough of a perception change to eliminate you from candidacy. So you want to be very mindful about the word choices that you use. Right. So that's why I talked about the perception piece. I didn't really intend on pitching the LinkedIn deal. I guess it's kind of hard to pitch a free thing, but it's— I didn't intend on bringing that up. But the, the word choices are so important. I did an A/B test on this where I, I listed myself as a freelance writer. This is 10 years ago in my career, and I added 1,000 marketers on my profile. I had about 10% reach out to want to pay me for freelance writing work, which is a great conversion, but they expected to pay per word like 10 cents or very small deals. When I changed to, uh, instead of using freelance, I used consultant, I got significantly less attention, but the expected pay was 10 times more than a freelancer. Because the word freelance is disposable and cheap. Consultant is valuable and informed. And so, that word choice, fractional is less committed, CMO, more committed, right? So, we want to be very mindful about what every word plays because you only have a few seconds to make that impression. And that plays into your wealth creation as well.

Yeah. Well said. Well said. All right. So, we got time. I've had a couple of questions come in, both from folks that sent it to me ahead of time that wouldn't be able to view and a couple that have come in throughout the of the program. Sure. There's one I wanna hit specifically, and, you know, certainly Jacob and I will share with you how you can connect with us if you wanna ask additional questions or anything we can help you with. But here's one that you and I, I think, both have some thoughts on and we talk a bunch about. And the question was, if you have flexibility, if you have the choice to choose, which that's always the better place to be in, what's the best time and best way to ultimately time a job transition? So when would you pick the job transition? If you have that timing? I'll let you go first and then I'll share some thoughts.

There are so many nuances to that. Like, there are a lot of nuances. Like, do you like what you do?

Right.

First of all, do you enjoy your job? Like, that's, that's a big part of it. If you don't, that's a, that's a reason to be looking for something better, right? You should never be so sure that what you have is enough that you wouldn't accept more. So I would say it's always the right time to be looking. And I would argue that the open to work tag on LinkedIn is unnecessary because everybody is open to opportunity. If I said, hey, Dan, I would love for you to do exactly what you're doing now, but I'm going to pay you 3 times more and you can still own your business and do all those things. Are you open? You're going to say yes, right? So everyone is technically open on that. The best time. I mean, I can share some time gaps that I've noticed be problems for clients. Particularly with vesting schedules. So the ideal tenure, I think, to be maximally compelling is 3 to 4 years at a company. 3 to 4 years is maximally compelling. Like everyone that says, I'm going to wait until I get at least a year, that doesn't mean shit. Like, that's not like there's this arbitrary number. I'm waiting until a certain point to then take action. That's a bad mindset to be in. You need to take action sooner. Like optimally, I would leave a company every 3 to 4 years to maximize wealth. As soon as you're in 6 years, 6 years starts to get to be an interesting point unless you've made strong forward momentum within that company, like a promotion, a good stock refresh, or some good reason to stay there, right? Fine. 6 years is kind of like the cutoff. If you start going past 6 years, you start to be a lifer, right? Like I had a client at a company for 12 years and they thought they were doing well financially, but they were probably 80% under market. Right. They didn't know it.

Right?

There's just limited options. And it's because the employer is armed with their most important metric, which is how much you'll accept. They already know you will accept that. So why— like, you're so far behind the 8-ball, you lose that. The other piece there is that the longer you're with a company, the more baggage there is. It's like, let's say your first impression carries a lot of weight. So if you've worked with somebody for 6 years, sometimes their first impression is who you were 6 years ago, and they don't see all that growth that you've made, right? But when you enter a new company, you start and you can forward project, which is what I want my clients to forward project their value so they can grow. I'd rather them grow into it rather than carry a bunch of baggage that drags them down. So if your presence has improved over 6 years but you still have this immature presence with the company you've been at for a long time because you're trapped with that first impression, you have the opportunity to reinvent yourself when you move and reinvent your career upward. I wrote an article on rhetoric that will come out on Thursday. Repetition of this is very important. If you want people to think you're a leader, you better start telling them that you are. But if you weren't a leader 6 years ago in this company or 10 years ago or even 2 years ago, you're hamstrung by all that baggage. So I don't think I answered that question, but I'd say optimally 3 to 4 years is when I would want to be making a move.

Yeah. I mean, from a financial perspective, that absolutely lines up, right? I mean, I'm usually helping folks. I will do, not to the extent that you do, but a little bit of career guidance as well because I've spent time in the seat. But the 3 to 4 year mark from a perception perspective, I think makes a lot of sense. You know, most stock options have 4-year vesting periods. So, if you have some form of company equity, you know, there's some financial benefit to being there as well. But I completely agree with you. I see a lot of times folks are not prepared for their next move before it happens, and, you know, way too often they get caught off guard and something happens with the company or there's a layoff or whatever the case may be. If you're proactive and you're always sort of looking, you're always open to work without necessarily putting the banner up in LinkedIn, you're gonna put yourself in a much stronger position, and if you really have a good idea around your financial plan and where you're going, you can make those decisions with a ton more confidence. And I think confidence in financial decisions and in career decisions, we're sort of hitting on how important that is today because that affects the way that you present yourself, it affects the strategic decisions that you make, and it affects the overall way that you come off to the public. So if you have your financial plan in line and you're being well coached on the career strategy side, everything you do is gonna come from a place of confidence. I think it's a great theme. I've, uh, I've really enjoyed this discussion, my friend. I know we're, uh, we're kind of up against the hour. Any, uh, any closing thoughts for our audience or anything you want to share with me?

I actually had a closing thought on that. I think that, you know, you can't be reactive in your career and also put that you're strategic on your resume, right? Right. Because oftentimes, like, a lot of my clients are very good at negotiating on behalf of their companies but not themselves, right? Of the cobbler's children has no shoes kind of thing. The— I find this hypocrisy all the time. So you have to lead from the front quite a bit for your own career as well. These aren't different things. Like, you have to show up. It's like putting your own life mask on before giving it to someone else, right? Everyone dedicates everything else to their education at Harvard and then their career. Then they put all their eggs in that basket and then wonder why they get broken. Right. You have to be proactive yourself and lead from the front. And then that character trait leads through your career next.

Right.

You can't be a leader here and not, you know, a follower when it comes to yourself. Right. So that's just something to be mindful. I find that hypocrisy and that double-edged standard quite a bit.

Yeah. Well said. I think we could do a whole nother call on your analogies. I love your analogies, my man. We got to— wow. I mentioned that.

I mentioned that in the rhetoric piece. Like, metaphors are important. You know, you don't build a well when you're thirsty. Yeah. Right? You're like, shit, I'm really thirsty. I'm gonna spend 6 months building this well. Or you know what? It would be really nice right here. Some shade right now in this 100-degree day. I'm gonna plant a tree, right? And then I'm just gonna wait and burn alive right here. So, we can go metaphors all day. I got plenty. I'm probably the most annoying metaphor guy.

The metaphors apply to both of our businesses and I think all of the folks that have joined today, what they were looking to join about, which is you know, how do you optimize your compensation? Then how do you use your, your compensation and your financial tools and resources to live the life you desire? And what you just said nails it on both of those. So we'll, we'll kind of leave it at that. We've put our links in the chat. So if you want to get in contact with Jacob or I, I know I'm open to just DMing me, but I put my links in the chat. You know, Jacob is with Think Warwick. I'm Tailored Wealth. And, you know, I think this has been a lot of fun for me. I hope to be able to do some of these with you again in the future. I think we've identified a couple topics that might be fun to do. But, uh, thanks for the time, brother. I, I hope the, uh, the audience enjoyed it as much as I did.

Yeah, I suspect we'll need to do a, an AMA session for us where we're very tactical, because I know there's gonna be a lot of follow-up questions. We didn't go into the total weeds, but I'm happy to answer some of those in DMs.

The best content usually comes from those questions. It usually comes from, at least for me, talking to my clients, talking to my prospective clients. So Share with us your thoughts. Come connect with us afterwards. Give us ideas on what we should do, and we'll be happy to do more of this. Thank you. All right, brother. Good being with you. Cheers. Thanks, everybody, for joining.