Aug. 22, 2023

016: Tech Employee’s W-2 Exit Blueprint: A Step-by-Step Guide to Financial Independence

Ready to take charge of your financial independence and break free from the shackles of the traditional tech career? Join host Christopher Nelson in this thought-provoking podcast episode as he unveils a comprehensive step-by-step guide: the tech employee's...

Ready to take charge of your financial future and break free from the shackles of the traditional tech career? Join host Christopher Nelson in this thought-provoking podcast episode as he unveils a comprehensive step-by-step guide: the tech employee's exit blueprint. Discover the key building blocks that pave the way to financial independence at the intersection of your career and personal finances.

 

In this eye-opening episode, Christopher Nelson shares invaluable insights on the four fundamental pillars that form the bedrock of a successful transition towards financial independence for tech employees. Gain a deep understanding of how to leverage your expertise, harness the power of equity, build a resilient evergreen portfolio, and develop a solid exit plan.

 

With a serious and no-nonsense approach, Christopher delves into the intricacies of each building block, providing practical strategies and actionable advice to help you navigate the complexities of your career while securing your financial stability. This episode serves as a guiding light for those seeking to redefine their professional journey and achieve true financial freedom.

 

Embrace this opportunity to learn from one of the industry's finest. Tune in now to listen to this crucial podcast episode and unlock the secrets to creating a path towards financial independence.

In this episode, we talk about:

  • The hidden value of using tech equity as a launchpad towards wealth creation.
  • The four foundational building blocks: expertise, equity, evergreen portfolio, and exit plan.
  • How honing your expertise can more firmly establish you as an authority in your niche.
  • Leveraging your expertise to attract opportunities for equity and financial growth, both within and outside of your W-2 job.
  • The power of tapping into equity compensation to propel your wealth growth journey.
  • Taking advantage of opportunities to become a part-owner of companies and gain financial flexibility.
  • Being proactive and skeptical of skeptics who doubt the potential of working for equity, as their views may be biased.
  • Insights on constructing an 'Evergreen' portfolio for achieving long-term financial stability and generating continuous income.
  • Creating intentional exit stories and position yourself for the career transition you desire
  • Considerations when designing an exit strategy to seamlessly shift from your traditional job towards achieving financial independence

Connect with Christopher Nelson on LinkedIn - https://www.linkedin.com/linkedin.com/christophercnelson

Transcript

Christopher Nelson (00:00:00) - When I first had this idea that you could work for tech equity as a wealth building strategy, I wasn't sure whether it would work or not. I'd seen some evidence of people doing it, but I had never really talked or understood how they did it. After doing a lot of research, I began to understand how people are doing it and seeing more evidence of people doing it out there. But there still wasn't this roadmap of working for tech equity, building an evergreen income portfolio and then getting to the exit. But this is essentially what I've done. I've created a framework of a foundational for of concepts that once you start understanding those, you can start putting them into practice and then you can execute that and go from equity to exit. I'm excited to share that with you today. Hello, my name is Christopher Nelson and welcome to Tech Careers and Money Talk. I'm your host, been in the tech industry for 20 plus years, and after climbing my way to the C-suite, working for three companies that have been through IPO and investing my way to financial independence, I'm here to share with you everything that I've learned and give you the foundations, the concepts.

 

Christopher Nelson (00:01:12) - And the place to be able to execute this yourself. In today's episode, I am going to give you the foundation for building blocks for how to go from earning tech equity to a W-2 exit. I'm going to spend the first half breaking down these four key fundamental building blocks that you need to understand. I want to give you the details. I want to give you the concepts. And then in the second half of the show, I want to give you some key actionable items that can allow you to start moving forward today. This journey is difficult. It's complicated, and it takes understanding some key fundamental concepts. Uh, and in where you need to build skills, where you need to put together processes to be able to execute this. So let's start off with what are these four building blocks? Expertise is number one. You need to build your expertise. I also call this career capital, but you'll understand that I'm trying to do something cute here where the four building blocks are Expertise Equity Evergreen portfolio in your exit plan.

 

Christopher Nelson (00:02:32) - Those are the four fundamental building blocks that sit here at the intersection of career. This is where you're building your expertise. This is where you're working for equity. And then your financial plan, which is your evergreen portfolio. In your exit plan. Your exit plan is essentially what ties the two together and gets you bridging from. Okay. I'm a full time W-2 tech employee and now I've moved over to living the lifestyle by design. So I want to get down into each of those fundamental building blocks and break it down for you so that you can understand what they are and what are some skills that you need to to build in and around those. So expertise is the first one. It is essential that you can build and position yourself as an expert inside your W-2, and then you leverage that to transition when you're outside your W-2. Let me make sure and say that again, this expertise in what I call your career capital, which is your X education experience and results, that same skill and in behaviors that you're learning in the W-2, you want to continue to build off of that to allow you to then move outside your W-2 and leverage that for whether you're building and working on your Evergreen portfolio as a full time investor, managing as a wealth manager.

 

Christopher Nelson (00:04:09) - And we'll talk about that in a moment like what that means, or is that actually your transitioning out of your W-2 work and you're actually doing some, you know, part time work in other things where you're transitioning out of your W-2 work to be able to have part time consulting gigs or other to complement your income while you're continuing to build the portfolio. Let's break this all down. So building deep skills is going to differentiate you in the market. And I know I talked about this in episode six on the podcast, when I talk about how you work for equity when you build your education, your experience and your results. And you're able to differentiate yourself by the experiences you've had, the results that you deliver. Well, guess what? You then create opportunities inside the W2 job market, inside the corporate market and outside as well. So Frank Sluman is a great example. For those of you who don't know, he's the current CEO of Snowflake. He, to me, is somebody who has built his career capital, where he went from working at software companies like Borland to then helping take Snowflake before Snowflake.

 

Christopher Nelson (00:05:31) - It was ServiceNow. He worked at ServiceNow. He helped take it public, grow it to become a multibillion dollar behemoth. And then he gets the job at Snowflake, which was the largest IPO on record at that particular point in time, I think still today. And he got that because he was seen as somebody who had delivered those results before. So he got an incredible compensation package that moved him over. So that's one example of where building this deep expertise of being able to guide and manage companies. Is something that can get you incredible opportunities. If you go to episode three and you listen to Brian Weiss, Brian Weiss is somebody who has positioned his career after he did eight years at a public company where he was taking equity off the table, delivered, you know, built some expertise in the IT world. He is now positioned as a VP of it, a CIO who helps take companies public, who helps get their IT systems, their IT teams in place to take them through an IPO.

 

Christopher Nelson (00:06:39) - This is building unique expertise that is positioning yourself inside the corporate market to work well for equity. That's essential. And while you're doing this, while you're building this expertise, it's important to understand all of these skills that you're building. Are going to help you when you move outside of the corporate world as well. I think this is one thing that people don't seem to understand. There's when they get into corporate, so many people want to get out, they want to do other things and they don't understand that there's a huge value in the skills that you learn while you're in a corporate job that help you become a better entrepreneur. I know it worked that way for myself. I know that I learned when I was mentored and helped become an executive for technology companies. I learned a lot about how to manage myself. How do I set priorities? How do I hire? How do I assess vendors? All of those skills help translate into real estate. When I was working as a director of business applications, I purchased a lot of software and I had to go through these very complex contracts, software contracts.

 

Christopher Nelson (00:08:01) - Guess what? All of a sudden I'm purchasing large commercial real estate and I have to go through those contracts or I have to create private placement memorandums. I'm well versed in that. That came from corporate. My understanding of how to manage finances, manage panels came from corporate and helped me become a great leader of a private equity investment firm. Those things translate. So it's important that you understand that building your expertise. Inside of a corporation is important. As you're planning an exit from corporate, what are the skills that you want? Be intentional about that. And a couple of my big takeaways from this are. Always better. Never the best. Whenever you're learning something, remember when you get to the best you want to, then rest. You're like, okay, I've hit the mountaintop. There's nowhere to go. That is a quitting mindset. The mindset is there's always opportunity to improve. You see this in sports all the time is that world records are constantly getting smashed as people are continuing to push themselves and how they can perform.

 

Christopher Nelson (00:09:15) - It's the same way in business also is that we can continue to get better. So always better, never the best that allows you to keep humble, keep iterating at these skills, whether you're in corporate or outside of it. You want to leverage these skills and this expertise to get more equity in companies, right? All these building blocks go through phases. So when you're in your building phase, you want to be building this expertise so that you're able to get more equity. Then you want to be able to build the expertise to be able to then attract people to your brand. Because that may be part of your transition. Right. This expertise is this valuable asset. Right. And this is what I talk about in episode number six is you are the asset and that is the these valuable skills that you're building. And so, number one, you're investing in yourself so that you can succeed. Inside of the corporate world in tech, working for equity. And then you take those things outside and that then helps you have these skills that you can manage and build your lifestyle by design.

 

Christopher Nelson (00:10:27) - It's all related. This is a foundational building block, and you need to remember that as you're building these skills, you need to be able to tell the story around it. When you're in corporate, when you're working for W-2 jobs, you need to make sure that you can tell your own story because nobody's going to tell it for you in this skill translates to outside. Because guess what? Once you are outside, if you want to do board work, you want to do consulting work because maybe you're your portfolio isn't able to give 100% of your paycheck or you still want to make impact your personal brand, your professional brand that you're building in the story that you're able to tell is going to be able to add credibility to that. And I think I have some really good stories to tell. So I want to make sure that while you're in your career, right, when you're in here, you know, one of the one of the big lessons I learned was from Cal Newport wrote a great book called So Good They Can't Ignore You.

 

Christopher Nelson (00:11:30) - In that book, Cal Newport talks about the fact that you want a craftsman mindset. The craftsman mindset is going to. Allow you and focus you on building these skills and expertise so that you become this respected craftsman that people know, like and respect. And it's with that high skill level, you're going to be able to translate that into work that you're passionate about later. And so while you're in the W2 job, you can take these. As I mentioned, I called out the Brian Weiss example of where he positioned himself. For the second half of his career after he really skilled up the first eight years of his career, he positioned himself. So then he was getting opportunities for companies that were 18 to 24 months from an IPO. The same playbook that I swiped from him and others that I knew. I position myself as a leader of business applications that could help take them through a Sox audit. Sox Sarbanes-Oxley is a level of audit that companies need to pass once they go public. This is a set of criteria that came out after the Enron scandal.

 

Christopher Nelson (00:12:50) - And so I position myself as a business leader that or sorry, as a business systems leader that was able to help companies through this. So the opportunities that came to me were the opportunities that I was exactly looking for. And this is my point, is that you want to make sure that you're positioning yourself, your expertise to get to the position that you want to be in. Let's talk about exit stories, right? In episode 12, I interviewed Blayne Wagle, who was a chief of staff for SAP, a very, very large software company, working for executives and helping them tell their stories internally and externally as part of her job. It was a skill that she built to be able to. Look at executives, understand the value that they delivered and the experience that they had, the programs that they wanted to deliver and communicate that for them. She's now created an opportunity for herself outside of the W2. Where she's able to. Help executives. Build their personal brands online so that they are creating more value outside of the workplace.

 

Christopher Nelson (00:14:12) - It's a key thing to understand too, is building your expertise, being able to talk about it, being able to understand what it is, setting standards around. It is critical because this translates and this is the foundational building block because it is this expertise or career capital that you trade for equity and that you also leverage to build outside of the W2 for whatever type of income you want to generate out of there. I know for Maurice Philomene, who was in episode 13, you hear him talk about how everything that he leveraged in corporate allowed him to now build out this real estate business that he has. He has a Quattro capital that is purchased around, I think, 2000 units of multifamily where he's engaging with investors, he's raising capital, and then he's also building out a coaching business based on everything that he learned in corporate. He then understood how to build a business out of that as well. And. And that's exactly what I did. The same playbook, right, is I leveraged a lot of my knowledge in corporate around contracts, around finance, around executive communication to build out my private equity business.

 

Christopher Nelson (00:15:39) - And so the key, the first building block of expertise is critical that you understand it and you continue to build on those because those skills are then needed in this transition. So building block number one, expertise building block number two, equity. We always work for equity. And this is to technology employees. Equity is the key that allows you to compound your career compensation. This gives us the ability to make in ten years what others take others not working for equity 20 years to make right. It's able to compress that time frame or even more trying to be conservative. Always working for equity and. Letting you have part ownership is this key that Robert Kiyosaki talked about right in his book, Rich Dad, Poor Dad. You want to be an owner of a company, not just an employee. Working for equity allows us to be both, gives us the flexibility to be an employee, but allows us to take equity off the table. Now, I have a lot of inbound when I talk about leveraging.

 

Christopher Nelson (00:16:59) - Tech equity is a wealth building strategy. A lot of skeptics reach out to me and say, No, it can't happen. That's that survivor bias because you went through these companies that went through IPO. There's a lot of companies that don't. And I said in my response to them is. Yes, that was my experience. But what I'm talking about here, what I'm advocating for is I'm advocating for people to go to work for public tech companies. Where. The equity is already liquid. It's part of the compensation plan because the data says that people working for large established companies I'm talking Microsoft, Oracle, Google, Facebook, Amazon, these large companies that are providing equity compensation in PSUs, that's already liquid. Make. On average, I'm talking from entry level to executive level. So that's an average 30% more a year. Then those who are not working for equity. This was the second building block that I had. I wanted to build expertise. I was focused in the first eight years of building my expertise.

 

Christopher Nelson (00:18:17) - But when I realized how to work for equity and then how to get that compensation coming at me faster, I realized I didn't have to work 40 years. I got out at 20. The reality is I probably would have figured this out and I'm hoping that you do. I could have got out at 10 or 15. Because I didn't. I didn't know this. And working for public company equity is a great way to compound your career compensation. It is full stop and a sentence. And again, you know, we know a lot of these larger companies that are out there, right? There's the Fang, there's Facebook, Apple, Amazon, Netflix, Google or now Alphabet. But there's a lot of, you know, smaller companies that are growing that have great equity packages for their employees, too. I'm talking about Workday Salesforce. I mean, again, these are not small companies now, but they may not be familiar. There's also, you know, CrowdStrike, Zscaler, the companies on the cybersecurity side, they're doing very well.

 

Christopher Nelson (00:19:28) - Companies that I used to work for, Splunk, GitLab, all these have equity compensation. That comes to you as part of your compensation package, what does this allow you to do? Why is this important? Well, you know that the speed of money coming at you, if you're able to make twice as much in half the amount of time, it means two things if you manage your money well. You can put it to work sooner. And so then if you're putting to work sooner, it's going to be able to grow for you faster. And this is why when you're working for equity compensation, the management of your money should be relatively straightforward. You want to live within your paycheck. Hardest thing for most people, but this is one of the keys. You live within those paychecks. And generally speaking, those paychecks are pretty high. The challenges many of us face when we're working for those companies may live in high cost of living areas, but you want to live within the paycheck. The second thing is then you want to get a bonus, that's where you get your extras, That's where you get your vacations or your large expenditures.

 

Christopher Nelson (00:20:37) - Your equity. You invest all of it. Your equity is invested the whole time so that this is you continuing to compound and build out your evergreen portfolio. And it's growing much faster as you're doing the work. That's the accelerant, right? It's these two blocks right here. Your expertise in working for equity that is going to accelerate and allow you to look at. Putting together an exit plan in ten, 15, 20 years that may take other people 30, 40 or longer. Right. We're hearing that people are struggling to retire right now. This is the accelerant. This is the key. And so use your experience as the asset to trade for it. And again, go back to episode number six, where I really break down the relationship between those two. Because today I want to cover off all these building blocks. So first, building your expertise. Number two, always working for equity. Equity is number two, building block number three. Is your evergreen portfolio. So. This portfolio is your business.

 

Christopher Nelson (00:22:01) - This needs to become your business. It's not this obtuse object that's sort of being managed by somebody over here. That portfolio and I'm calling it Evergreen for a reason, and I'm calling it a portfolio again for a reason. Evergreen, because you want to think that this is anchoring your family for multiple generations. It's not just about, you know, a portfolio that then you're trying to build and then you're going to drain until you die. No, And that has to go into the mechanics of how you build it. That's why I'm calling it a portfolio, because you need to build it aligned with your financial goals. And if your financial goals are exiting from the W2, you then need to think about income in your portfolio. How do you get income in your portfolio? This is where, you know, when you look at general portfolio construction. What I used was the 6040 rule and I know other people are more extreme. They may say 7030 with an income to then what's in the market.

 

Christopher Nelson (00:23:10) - And I know some people that are all into 100% income portfolios and they may have little or no market exposure. This has to do with your personal preferences, your risk tolerance and how you're deciding to build it. And again, this is not financial advice. I am just sharing with you experiences that have worked for me, for myself. I went to a 6040 model, sometimes oscillating between the 5050 model where 50% is in growth. So that's in traditional stocks. Growth stocks. I may also have some in some ventures. I do have some aggressive plays there as well, or I may have that in. Different startup companies that I know are going to grow over time or business ventures where, again, I'm not getting any income off of it, but then I have 40% of my portfolio. That is made to send me checks. I leverage this strategy of creating a portion of my portfolio that was made to semi cheques. And the interesting thing is the 6040 portfolio strategy is not new, did not make this up.

 

Christopher Nelson (00:24:20) - It was actually around for years and that was one of the primary strategies before the bond market imploded in 2008. As all of a sudden the financial crisis happened, the bottom dropped out of the bond market, interest rates started falling. And so the 6040 portfolio all of a sudden became this 4% rule where you're in these growth stocks and you're trying to, you know, harvest 4% a year and you pray that it doesn't go away before you die, that you don't use it all well. An evergreen portfolio is different. Right is you are constructing the portfolio. So let's talk about, you know, when we're talking about the strategy here, what's the strategy of an evergreen portfolio? Number one is you need to be the CEO of this business. And this is really powerful because you, like a CEO, bring in CEOs, have a CFO. They don't manage the finances. They bring in a trusted, experienced professional to deliver the result. And this is the same thing when you are the CFO, when you are the CEO of your portfolio, and you're managing this company.

 

Christopher Nelson (00:25:33) - You run it and you own all of the decisions and you may bring in professionals. I bring in tax people. I have tax professionals that they own. The result of lowering my tax burden every year. Certified tax planners. You know, you can go and listen to episode number five, where I talked to certified tax planners. So important you have the right tax planners on your team. But I own the results. I am driving this vision and I am meeting with my team on a quarterly basis and that's my team internally, you know, we're working and I'm saying we my wife is my business partner. We're working this week over week building this business because this is a business that we want to we're slowly bringing our sons into this business, but this is going to be our business. You know that that will live on beyond us. And that is our intention. And this is where you have to set that intention and you have to manage it like a business. If you're going to treat your finances like a hobby, you're going to get that result.

 

Christopher Nelson (00:26:39) - If you're going to treat it and own it like a business, you're going to get that result. Now, here's the very powerful thing, and I know my friend Maurice Philomene, he's given me the language around this. This is the way that we acted. But I think his words are so powerful when this building, this business, becomes your purpose. When you're saying, okay, wait, I'm going to build a business that my family can live off of for multiple generations, and it should be a portfolio. It's different, right? I mean, for us, we have. Real estate holdings. We have some that we've invested with the private equity group. We have some that we have with other partners as well. We have a stock portfolio and we are also entertaining some other business ideas. It's a portfolio. But the thing is, it is as you're building this. That becomes your purpose. So then your W2 job, your corporate job becomes purposeful. Let me break that down.

 

Christopher Nelson (00:27:42) - When you are in the grind and you're in the W2 and you go, Why am I doing this? And you don't have something like this. It gets frustrating and gets lonely and you wonder why it's all what it's all about. But I can tell you that When. We were, you know, doing some different product launches when my team was really grinding and we were working really hard and I saw the benefit to the company that I was bringing. I saw the stock price going up and I knew that every time I was cashing out some issues, I was putting more bricks into the foundation of this portfolio and growing it. That portfolio was my purpose. My work was purposeful. So that is my message to you, is that when you build a portfolio and you make it a business and you become the CEO of it. Then that becomes your purpose and the work becomes purposeful. And that will give you a lot more motivation. That will give you a lot more focus and that will give you a lot more clarity.

 

Christopher Nelson (00:28:50) - And what you want to do. So these portfolios need to have income producing assets. Income producing assets. I think it's important to cover off on traditional income producing assets. I mean, now you see savings accounts are up to 5.15. I mean, you can get some capital in there and you can get some decent returns. Is that beating inflation? Well, that's debatable, but you can definitely get more generated. So you have savings accounts, you have certificates of deposits, you also have bonds. And those are some of the traditional investments. And then, you know, on the alternative investments, this is where in your portfolio, being the manager, you then get to choose where do you want to spend your time? And if you remember in my interview with Litton, you have a founder of visor. He said, Well, wait, I want to have somebody manage my stock and traditional portfolio and I want to spend the time on the alternatives where there's more risk. And again, he gave me words to what I was already executing, which is that it's easy to put your stock portfolio under somebody's caring guidance or manage that yourself automagically with some robots.

 

Christopher Nelson (00:30:09) - And then you can go focus where there's the most value and where you have to manage the risk more aggressively. And so what do those instruments look like? Well, when you get into alternative investments, it's a whole world. You can invest in. Commercial real estate is right down the middle. You can also invest in royalty funds where you're buying pieces of music. You can invest in legal litigation funds where you are funding litigation, and then if they win, you get portions of that. You can invest in life insurance funds, you can invest in farmland, you can invest in small businesses. This is where there's a whole world out there. And all of those have different risk profiles. All of those have different return profiles. Why real estate? Well, real estate is right down the middle. I'll tell you why. Why people tend to go for real estate is because it is a. Multiple return profile assets. It's very, very interesting. When you're on the equity side of real estate, you are able to make money in four ways.

 

Christopher Nelson (00:31:11) - Let's count them off four ways. Number one, you always want to focus on cash flow. You have more income than expenses. You get cash flow off your real estate. Number one way number two is appreciation, right? The asset over time increases in value. Don't invest in that as a primary cause, but that is also a benefit. Number three is equity pay down. Depending on how your equity is structured, you know, it could be interest only, but if you have interest in principal, then if people are paying your rent in a single family home scenario and they're paying a portion of it to your principal, then you get that goes to you. You're actually getting more equity as time goes on. And the fourth very powerful one is depreciation, which you get tax benefits. So the reality is. The tax benefits of real estate mean that? You actually pay less taxes. So if you're actually making all of your money on real estate income, you need less real estate income to replace your W-2 income.

 

Christopher Nelson (00:32:12) - Wait, what? Yeah. So if you are an executive and you're making $225,000 a year in W-2 income, then for real estate income, with the depreciation against it, you really just need to be targeting $190,000 a year and you're making around the same amount. Yeah. That's why people love real estate. It's so important. So this is the third building block is this evergreen portfolio. And remember, you need to be the CEO. You're responsible for the results. Embrace that mindset. And it's so important because I know in running my private equity company, I hear a lot of stories and some of them are horror stories. And I have heard people tell me stories where they're frustrated with financial advisors because. They really don't actively manage their portfolio. Where somebody is in a portfolio for this gentleman happened to be with a particular financial advisor for 20 plus years and he was in the same fund the whole time. There was no active management. He wasn't getting a lot of planning. He wasn't really told what to do and he was paying a really high, you know, I think 1.5% asset under management.

 

Christopher Nelson (00:33:40) - But ultimately. He was responsible for that result. He wasn't checking in with his advisor. He was treating it like a hobby. And just expecting that this guy was doing his job. You have to manage your vendors and you always do as you are moving up the ladder and you're making more money, you then need to be thinking, okay, is this person still. Somebody who is going to fit my goals and is going to be able to manage my business. Be prepared to fire some people you've been with for years. It's true because you need to manage this like a business and you want to grow this business. You want this to be a growing, thriving business. And this is really where the rubber meets the road and where your career and finance come together like this. This is the friction point. Is everything that you're learning, your experience of people managing departments very well, but then they don't manage their finances the same way. They don't get regular status updates. They don't understand the metrics quarter of a quarter.

 

Christopher Nelson (00:34:52) - And are they meeting their goals? What adjustments do they need to make? Are they learning and understanding what people are doing? One of the other things that I think is really important around this portfolio is that you need to. Unlearn a lot of things. You need to unlearn a lot of things, especially if you are growing and becoming an accredited investor, becoming a high net worth individual. A lot of what is being pushed at you from financial services companies is really for people who are middle class and will honestly keep you middle class. But a lot of the thinking that's done by high net worth individuals, the way that they invest is completely different. Then it is done. Here. You know that that is done From what? From what these fast food wealth managers are pushing, Right. They're going to just let us have complete control. We'll push you in this, don't do a lot of things like they're trying to push you out, have the control and they're not really demonstrating like, what's the value? Are they really aligned with their goals? And I'm not trying to bash all wealth managers.

 

Christopher Nelson (00:36:07) - I had a phenomenal conversation with John Morrison, as you know, in the last podcast, and you should look that up. He is a different class of wealth manager and they're great people out there. But you need to make sure that you're talking with the right people and you need to make sure that you are also willing to unlearn what you've learned to continue to progress in your growth. And so let's let's recap where we are before we get to the last one. Okay. When you're managing your Evergreen portfolio two, you're going to need to build new skills. This is something that you're going to have to grow into. This is something that you're going to have to learn. And it's critical that you do this so that you can become this wealth manager. And what you can do is pass that on to your family, continue to raise your kids in this business. Let them see this as a business. Let them understand the purpose of this business so that they can help grow and manage it too.

 

Christopher Nelson (00:37:10) - And a lot of this education you're going to have to find from other people, you're going to have to find from online courses and not in a lot of what you would consider the normal places. There's not a lot of university courses that are being taught. On some of these particular subjects. And I think it's really important that you seek out the right education and understanding. I'm talking underwriting, due diligence, operator vetting, and then this management of your entire portfolio, understanding that. It's really, really important. The key thing the fun thing about all this is it's really in this portfolio building that you can build a community and you can have a lot of fun with it, right? I have met so many people, I have investors that we partner together and go look for different opportunities together. We enjoy it. It's exciting to find new partners and understanding or operators that you're investing with. And then they know other operators too. And you start building this community and you understand who's like minded, you know, who are the people that you want to do business with.

 

Christopher Nelson (00:38:23) - And it really becomes something where you're on a journey with a lot of different people. And I found that, as I was concerned, of leaving my W2 and not having this network and, you know, these friends that I really enjoyed spending time with, I found a lot of that outside of this in my investing community. And so that's a great thing and a big advantage. So let's recap right now. Where is our expertise? You build it. That is a valuable asset that you continue to build that's going to help you in the W2 is going to help you outside of that. But you need foundation number one, build your expertise foundation number two, equity. Always work for it, always work for it or build it, right? I mean, you can also build that in companies that you're building and owning, but always work for equity or always build equity. Number three, Evergreen portfolio. That is your business. You are the CEO of it and run it like a business, not a hobby.

 

Christopher Nelson (00:39:27) - And number four, exit plan. Your exit plan is what ties this whole thing together. Your exit plan is going to be your strategy that is helping you build and grow your career, maximize getting the equity off the table, putting it into your portfolio, and then helping you understand what does that life look like outside of the W2? What is that plan for you to be able to get income from your portfolio and also any additional income that you may need from other sources? So what does that look like for people in tech? So many people think, oh, if I leave my W2, I'm no longer valid. It's not true. You know, I know people that have stood up advising businesses where they're getting, you know, $4 or $500 an hour to advise startups because they have specialization in a unique area. Making money still relevant? Still continuing to build skills. I know that executives you know are some of the senior directors VP's above. Move on to board seats and get board seats and board seats generally have equity compensation that come with them.

 

Christopher Nelson (00:40:51) - Some of them may have stipends and other things, but for the most part, it's equity compensation that they get. There's board seats. There's also consulting. People that you know, and I've seen people do this very strategically where they actually work for hyper growth companies, have some exits or some equity events, take that off the table. And then they do. They're building a consulting gig on the side so they can then continue to make money while they're in this downtime. And then they go and they do another one. If you look at Darren Murph, who I interviewed, I can't remember the episode right now, but Darren Murph, head of Remote at GitLab, he has a consulting business that he operates all the time on helping companies strategically create. Um, you know, organize, organize the work, organize the remote work. And what is their playbook looking for? Like, for that, he's built this consulting business. So whether he is W-2 employed or not, he is still able to generate income off of that.

 

Christopher Nelson (00:41:56) - And that was built by expertise. And so your exit plan, you need to be building that, crafting that and understanding what that is. And you're really tying your expertise, the equity that you're getting and how that's filling your portfolio to complete. What does this exit plan look like in your exit plan? Is ultimately this, you know, financial and business plan that intersects all this together? This is why I think that these conversations are so important because. I know that when I was starting on this journey, I didn't have a lot of people to talk to like about this stuff. Now I have a ton. I have a lot of friends that we get the opportunity to talk about these strategies and tactics, but an exit plan is essential and in your exit plan. You need to tie in your career because maybe you want to slow down your career growth and you want to be able to focus on, okay, what used to take me. Now I'm a very experienced senior director and I'm choosing not to go for VP.

 

Christopher Nelson (00:43:08) - That will add another 20 hours a week and maybe another, I don't know, 100, $120,000 in a year. There may not be a payoff with my plan. I may want more time to be building out my professional brand. I may want to start a consulting business. I may want to do more speaking. I may want to do other types of events that are going to set me up for something else in my plan. But this is where ultimately, in your business plan, you want to understand where you're growing and take your expertise so that you can then ensure that you are growing and getting as much equity as you can while you're working in your W2 positions. And all of that is then feeding into your Evergreen portfolio that are your investments. And then also any type of business ventures that you may be starting as well. I've definitely seen quite a few people starting to generate expertise, create followings online and start to sell courses that then they leave a W2 job and they go and they start becoming a group coach and taking people through that.

 

Christopher Nelson (00:44:22) - And now they're getting income from that. And that's a business that they own completely. It's their business. Those are the four building blocks. That's it. I want to make sure of that. Oh, and I think it is. Um, let me add a couple of things to the exit plan. So your exit plan is a living and breathing process. It's going to change over time. And I think about the story where I. Took a sabbatical in 2019. I wasn't saying at that point that I had left my W2 permanently, but I took a sabbatical and I was focusing on my private equity company. I was doing some writing and I was just taking a break from tech for a little bit and I wasn't sure, well, what happened in 2020 happened and there were a lot of headwinds at that point for commercial real estate. This company, because of the fact that my portfolio wasn't to the size that I wanted it to, to provide all the income for my family. And arguably, I wasn't in some of the assets that I wanted to be in mobile home parks.

 

Christopher Nelson (00:45:30) - I wasn't ready, so I had to go back to work and that was fine. And so I leverage my expertise. I got a great call for an opportunity to GitLab or to GitLab for two years, took it through another IPO, took some more equity off the table, put it into the portfolio, and invested quite extensively in mobile home parks over the last two and a half years. Considerably more cash flow made the exit very viable. Also worked on writing, also working on growing my personal brand a bit more as this tech career and money strategist and starting to grow other opportunities that allow me to enjoy my diversified portfolio of income and lifestyle and also create impact, which I think is so important. So. That is it. So as we got to the end of these first four, I realized that I've gone a little bit long and this stuff is so impactful. It's so important for people to understand this foundational four that I wanted to break it out. And these are truly the four big building blocks that will take you from equity to exit.

 

Christopher Nelson (00:46:50) - And this is where I'm going to be spending more time bringing on different guests. And you can see that I already have examples and that's why these episodes are so important to tie back to you and say, wait a second, you want to see an example of somebody who has built expertise and has a business alongside it. Go listen to that interview with Darren. Murph, Do you want to hear somebody who is really focused on how they, while it works, really created an evergreen portfolio that can now, you know, help their family today, help them get to financial independence today, in the future? Go listen to the interview with Maurice Philomene. It's filled with that stuff, you know, and then continue to go back to those episodes where I'm breaking down these foundational concepts around how do you go to work for equity as a wealth building strategy and understand that? And more than anything, ask questions. I would encourage you to go to Tech Careers and Money Talk, ask questions, fire off emails.

 

Christopher Nelson (00:47:51) - We want to know what you need to know so that you can be successful in this. Okay, so I have gone a little bit long on the foundation for. And I do want to get you to some actionable items. So let's take a quick break. I'm going to be right back and I'm going to give you some actionable steps now that you have these foundational forms from equity to exit, where do you get started? What can you do right now to start moving the needle? I'll be right back with that. Okay. Welcome back to Tech Careers and Money Talk. I know that we've been talking for the last 45 minutes about these foundational four of what are these key concepts that you need to understand to get you from working for tech equity to the W-2 exit. So now where do you start? What are you doing right now? The key thing that most people don't tell you about journeys like this is that there needs to be a considerable mindset shift, that you have to have to embark on something that's long.

 

Christopher Nelson (00:48:54) - You My journey took myself and my wife ten years to get to this phase, and there's much more that we want to do is we've been building and evolving this business and this transition from full time tech employee to now all of a sudden running this other business. And the one thing that you need to do is define your why. Why are you doing this? If it's just for the money, you're going to burn out. You're going to go sideways. You're going to quit. It has to be for more than money. And we all have a why. We all have something that is really, truly driving us. And this is where I'm going to tap into my friend Morris, who he really encapsulates that we're all seeking five freedoms. We want financial freedom. Time. Freedom, geographic freedom. We want the freedom to fulfill our purpose. And we also want the freedom to develop deeper relationships. Those are the freedoms that drive us. But behind that, there has to be a why. Now, I know for myself, my wife, when we got started on this journey, the big Y was we just wanted to get the basics.

 

Christopher Nelson (00:50:13) - We wanted to get a house in the Bay Area. We wanted to, you know, get some money in the bank, pay off our college debt. And we wanted to set our family up so that we could be taking a couple of vacations a year and we could really be building this portfolio so that it could be something that we could then get more of these freedoms later. But ah, why that was right in front of us was really tangible. We had a very young family and we were trying to get our basics covered. We were trying to get a foundational footing. Now, what happened is 4 or 5 years into that, after the first IPO, all of a sudden now it started changing. Right. We have these three little boys and I'm realizing, wait, I think it's possible that I can get to a point that when they get to be ten, 11, 12. I can be working on a part time basis and really be helping them walk this journey to becoming adults, to becoming young men, and to be helping them launch from the home.

 

Christopher Nelson (00:51:19) - And so this is where the why changes. And then, you know, Rege-jean, my wife, she got this, you know, vision that our family could be geographically independent, where we could be, you know, living in different places, doing different things as a family. And so that is why we're building this shift. The reason that you have is so important. So why do you want one of the five Freedoms? And you know, from that y you know. You're going to understand that. Your Y needs to then be written out into a vision. You have a Y and the Y. The reason, right? So. So wanting to spend more time with your family, wanting to have geographic freedom that's driven by a Y, and you need to document that clearly in a vision you need to get very, very granular is, you know, I want my family to be able to. Live for six months in another country. So you will not have to worry about income during that time to be able to return to being able to pick up my career where I left off.

 

Christopher Nelson (00:52:34) - And you know what? What is your why and how do you document that in a vision? And part of that also. And again, I know that this is, again, all mindset stuff is then how does that align with your purpose? Like what do you ultimately want to do? Because I see a lot of people in the fire movement, right? Financial independence, retire early where they sacrifice so much and then they get to this point where now they're retired early in their, you know, have all this time, but they don't have a purpose. Like what do they want to do? And so that's why I think you're creating a clear vision, having that tied to your purpose. You know, so for example, my purpose is to serve my family. I want to really be there for my family. I also want to serve others. I want to be educated. When you give a lot of our big philosophy here at home we want to be able to teach our kids the things that we weren't taught.

 

Christopher Nelson (00:53:39) - And that's really important. And then also give them experiences. And I want to do the same thing for people in tech, careers and money. I want to teach you the things that we weren't taught. It wasn't taught this. But now you can because I'm leaning in and then I want to connect. So educating, serving and connecting is really my purpose. And that was something that I actually found in my W-2. I realized I wanted to teach people how to be better leaders, and how to grow in their career. And I wanted to be a servant leader. I wanted to make sure that I was taking care of my team. And we were creating infrastructure where we took care of each other and then connected. I love to connect with people. I like to get together and live events, you know? And this is why the podcast also has an associated meetup, right? That if you get on an email list, you'll get notified of our meetup where we get together, have master class, get networking.

 

Christopher Nelson (00:54:33) - Time is personal, intimate, but when you are executing this foundational four, you need to have a why. You need to have a purpose because it permeates that. It is really the fuel that goes into that. You also need to make sure that you have. The what? Right? What skills do you need to build this journey is all like if you think you have it all now and you're just going to take what you have now and cruise. Uh, and that's why this community is so important. Talking about this is so important, but you need to build skills along the way and starting off those are skills in your career. Then it's understanding how those skills translate and then it's picking up new things along the way and also leaning into your strengths. You know, there's a reason that I went and took a really large time commitment, money, commitment, public speaking course last year, and that was because I wanted to lean into a skill that already had continued to evolve, because I know that going forward I'm going to be educating.

 

Christopher Nelson (00:55:38) - I'm going to be doing a lot of public speaking, and it's important that I have that on lock that I understand what that is. You and then due diligence underwriting. These are things that I'm always looking at different courses. Who are the experts? Who can I get time with to really continue to hone that? Because as a. Real estate investor. I want to understand this to a tee. And I also want to teach my kids, you know, teaching this type of investing and teaching this type of these skills are things that we should be learning and evolving as we go. So you have to know why you need to get that drafted out in a vision statement. You want to understand what freedoms you're pursuing. You know, these are some writing exercises and what your purpose is. You then need to translate that in. What do you need to learn? Right? This is part of these fundamentals that I've laid out for you today. Where do you need to learn? Where are you in some of these things you want to understand what are standards? Inside of some of these verticals.

 

Christopher Nelson (00:56:47) - So when you're thinking about, you know, whether that is hard level, hard, hard skills and engineering, you know, and what are certain levels that you want to achieve there versus something that is, you know, public speaking, which may be a little bit different, You know, where where do you set your standards? And I think one of the key things there is, is finding people that have done this and following them and understanding. I mean, this is where we have such an opportunity in today's day and age to be getting a lot of this stuff, you know, from other people who are building in public. And I think leaning into people that are transparent, that are building in public, that you can see what they're doing, what they've done, and you can understand that is really, really important. Um. And then all of this comes down to this plan, right? This is how you're going to do it. Your vision, all your why all this needs to be written into a plan with, you know, the skills that you need to build.

 

Christopher Nelson (00:57:52) - This is part of your exit strategy. All this comes together in a comprehensive plan. That you want to be managing. And this is, you know, career based and this is also finance based. You want a financial plan, you know, where you know, let's let's talk about that budget that you have. Let's talk about how you're saving to invest. Let's talk about how you're managing your money. You need to have a financial and a business plan. And that's what comprehensively this is, if you are truly building yourself out with a set of skills to be running this particular company that you get the chance to define. This is why I talk a little bit about being the founder of your financial independence if you are building a company that's you, your family. You can bring in other people, other experts to this business. You have an org chart, you have everything, but you're building this and you're putting together a business plan around this. So starting to draft that out, what does that look like? Where do you start? Start with simple, you know, budgets start with simple business plans of, you know, analyze your portfolio.

 

Christopher Nelson (00:59:00) - Where are you now? What's the size of it? What's the diversification? What do you want to do? And then you need to execute, you need to start moving forward. And this is where so many people get tripped up because they think, well, I have to, you know, do this big thing. And you don't. Sometimes you just need to spend time doing more learning. Sometimes you need to take a course, engage with a coach and you need to move forward. Doesn't mean you have to take massive action right now. You just need to move, start being consistent, and you need to build momentum. Awareness. Awareness is huge, like being able to understand these fundamentals for being aware of those. Taking an inventory is the first place to start. What do I have in all these things? What's my maturity level? In all of these things? It's very important. And so execution is a discipline. You have to build it right. And this is moving forward.

 

Christopher Nelson (01:00:06) - So this is making sure that you're doing some sort of reading, right? I mean, growing your expertise is something that you should be building so that it's part of the fabric of who you are. It's constant learning and this discipline of growing, it's a discipline because it doesn't require motivation. That's what discipline is. Discipline is you get up and do it no matter what. And I always think of the David Goggins quote where you need to do your best work when you're the least motivated. And I just think to myself, I just have to move forward when I'm the least motivated. That's how I translate that. Just keep moving forward. And sometimes the work provides more motion and you can execute from that. Grow your confidence by building skills, you become better at execution the more you build skills. You put some of that to work and you see that happen, right? So this can be, you know, in those fundamentals for it can be, you know, when you're building skills at work, you get a chance to work on that on a project and you see some results that are going to build confidence in that.

 

Christopher Nelson (01:01:17) - The more you tell your own story, practice telling your own story, and people can see that in resonance with that, you know, that builds your confidence. It's the same thing with investing, right? When you study investing, then you make a small investment. You start seeing that perform over time. That's going to give you confidence. Now, not all of these things are going to work. You are going to have some failures. And one of the key things that you need to understand is that you can turn a failure into a lesson learned here. The sooner that then that will become confidence and you can continue to move forward. Do not get caught up in the mindset that a failure is where you stop. A failure is a valuable lesson that gives you insights into what you need to do next. So failure is a data point, and the sooner you can figure out how to turn that into a lesson learned and what not to do or how to adjust your strategy in whichever of those fundamentals that you're executing, you can continue to move forward.

 

Christopher Nelson (01:02:34) - And ultimately all of this works better when you build a team around you. Execution and moving forward with like minded people is so important because they keep you accountable. You tell them I'm working on this. And you do. You have to put it out there. Tell them I'm working on this. I am going to write my vision statement. Okay. Did you get that done? Did you write that down? Oh, no, I didn't do it. Well, it's. Why don't we go to a coffee shop right now? Let's dig into some caffeine and let's just pound it out. Like you just need to get a version one. You need to get AV1. You need to get it down there. Get it down on paper. You know, and I would encourage people to go download Otter, just speak it out, walk around, talk about it. You just need to move forward. You need to have a group of people to keep you accountable. And then also, the fun thing is to find people where you enjoy the journey, you enjoy this and then turn that into part of this lifestyle because the journey.

 

Christopher Nelson (01:03:39) - From equity to exit. Going to be a long one. For most of us, mine was ten years. 20 years. If you took all the learning, all this skill building. I was 20 years old. It's been a long time. But it was ten years that I was really focused and I really was building the journey. It's a long time, but I've made incredible friends and we're spending time together. We're spending more time together. We're in some of these I met in jobs. We're now all financially independent. We're working on different investing ideas together. We're working on education ideas together. We're working on vacation ideas together. It's great. And so. I want to leave you with this encouragement that you can do this. These actionable steps of defining your why. Getting that written out on paper with your vision is so important. I think also doing an inventory of what skills you need to build and then starting to move that into some sort of a plan. And think of it as a business plan.

 

Christopher Nelson (01:04:43) - You are building a business here that is going to be in your family for multiple generations. I want to set that seed because it's with that mindset that we build something that meets that criteria. And then create the discipline of execution in your life. You need to be able to do work and move this forward when you least feel like it when you are the least motivated. When you get to that point. Then you're really going to start getting the flywheel effect. This thing is going to start picking up steam and all of these different concepts. You're going to be able to lean into them more and more. But that's it. That is the foundation for those are the four key concepts. And I have laid out to you like where I got started, how I started executing. And I can tell you that writing is a big part of this, putting things on paper, putting your ideas, and doing some journaling is a big part of this because you have to keep this whole thing going. Good news is you're not alone.

 

Christopher Nelson (01:05:48) - We're here with you at Tech Careers and Money Talk. You can also come to our tech Careers and Money meetup on the last Thursday of the month. When you sign up for an email list, you'll learn more about that. But thank you so much. I'm excited to share all of this with you. I know this podcast went a little bit longer than our normal solo format. Had a lot to say. We are a new podcast. My ask for you is Please, please subscribe. Follow us on Apple Podcasts, Spotify, Amazon, Google, wherever you follow, follow us. Number two, please leave us a review. We need the reviews. People need to hear about us, understand what we're doing. Please leave a review. I know many of you have. Thank you so much for that. And tell other people. People do not have to go at this alone. So I'm excited. Thank you so much for this one and looking forward to the next time. Thank you so much.



Christopher Nelson Profile Photo

Christopher Nelson

Host

Navigating the vast seas of Cloud Computing and Digital Transformation, Christopher Nelson emerged as a force in the technology space over two decades.

From setbacks in early startup ventures to pivotal roles in the IPO successes of Splunk, Yext, and GitLab, Christopher's journey was anything but linear. Today, he predominantly focuses on speaking and coaching, sharing insights from his dynamic career.

As the co-founder of Wealthward Capital, and the voice of "Tech Career & Money Talk," he guides tech professionals towards financial independence. His diverse path, including global travels, entrepreneurial ventures, and eventual triumphs, serves as the backdrop for his teachings, soon to be encapsulated in his book, "From No Dough to IPO".