084: Escape the Golden Cage: 5 Freedom Strategies for Your Exit Plan

00:00 - 37:01 | Christopher Nelson: Have you ever felt trapped by the very success that you were trying to achieve? Many people believe that financial freedom is created with a bigger paycheck and more wealth, and the reality is that it isn't. Now, I know in the term financial freedom, financial comes first, so you think that that takes more importance, but it's not true. What if, what if, Getting to financial freedom was not about accumulating more wealth, but it was about reducing constraints. Welcome to Tech Equity and Money Talk, where we discuss real-world examples and strategies of how to grow your wealth with tech equity compensation, manage the money that comes with it, and exit your W-2. And today we want to talk about exit planning, beyond the money. I know that when we think about financial independence and we think about exiting, many people think it's all about the money. I need to get this big, big pile of money and then I can exit and be free. The reality is, it's not that. It's really about understanding, can you unlock a life of intention and purpose so that you can build a life that you deserve that helps you unlock your talents and potentials? Many times this may not have anything to do with money right now. Today I want to break down for you in this episode how you could be working your way into the golden cage of tech and how do you identify that. I want to break down for you what are the five freedoms of lifestyle design. There's time freedom. Financial freedom, freedom of relationships, freedom of purpose, and geographic freedom. I'm then going to share with you some of my personal tips that I have used that have helped me gain back some margin with time, and then also the incremental process of how you can start building more freedom in your life that can ultimately help you exit your W-2. If you're in a situation right now that you feel like you're working harder and harder and it's getting hard and you can't even realistically think about the exit, this is the episode for you, right here, right now. Now, before we get into that, I do want to say, if you enjoy this content here, if you're somebody who works for tech equity, you're trying to understand how that works, you're trying to figure out how to manage the money that comes with it, build a lifestyle by design, then I would ask that you subscribe to this YouTube channel, hit that bell, make sure you're notified. We publish episodes every single Tuesday. We reel out every single day. Or if you're listening to us on audio podcasts, just hit follow, whether that's on Apple, Spotify, or wherever you listen. All right, I hope you're ready, because I'm jazzed up, ready to go, and we're gonna get into this episode, exit planning beyond the money. So the storyline for many of us is the same. You get out of college, you finish your education, and you go to work for a technology company. These technology companies give us this front row seat to the future. It's incredibly exciting. They also start defining our identity, providing us with a tremendous financial reward. And they create this foundation for our financial success. But what ultimately starts out as just a job also starts transitioning into part of our lifestyle and part of our identity. Over time, and you may not realize it, it actually starts becoming the golden cage of tech. What happens is we start making more and more money, getting more and more success. And maybe because we're making more money, we start inflating our lifestyle. We start growing our expense line. At the same time, we start getting more reward for the more hours that we put in. As this continues to grow, we get excited about all of the accolades and all of the things that actually help us represent our identity as well. This is when things start to change. Usually when you get to a little later in your career, you've still been single. Now, all of a sudden you start having a family or you have aspirations outside of work. This is where the friction really starts because while you have this front row seat to the future, you have this exciting job that is part of your identity. You start having these desires that pull you in another direction, but the more you try and head towards your hopes, your dreams, your personal purpose, you feel pulled back into this golden cage that you don't know how to get out of. The skills and experiences and all the knowledge that we've gained, in reality, we're sitting in this cage with an open door, but many of us just don't understand what is the plan that we need to walk out of it. For me, I remember the exact moment when everything needed to change. It was in 2014 when my wife and I had a set of identical twins, and I was sitting here looking at three babies, two and under. We'd had our older son 18 months previously, and now we had three sons, and I wanted to have more time with them. But I was at a point in my career when I was busier than I ever was. My nine to five commute had become a nine to nine. I was working long hours because I was a senior director, senior director at a hyper growth company. I literally kept catching naps on my commute to just keep up. I wasn't just busy. I was buried. The demands grew exponentially. I mean, over time, the demands of a growing family, a tired wife pulls you in, coupled with the fact that you have this, this other mulling screaming baby, that is this hyper growth technology company that, you know, you need to hire new people. You need to continue to innovate. You need to continue to deliver on solutions. As this company had 24 by seven access to me, I had babies that needed 24 by seven access. Like I was being forced to choose between my career and my family. It was really at this point that I realized more than anything, I had to figure out a way to get out of here. Now, before I go on, I want to make sure that you understand that this exit plan that I'm talking about today is really part of a series that I've been doing for the last, this is the fourth, episode that I've done of my entire from equity to exit framework. And so if you go back to episode 81, you're going to get the fundamentals of tech equity that were the building blocks of how do I actually generate wealth to start getting towards an exit, to start building something that I could use to get to financial freedom. Then there is episode 82, which is how expertise gives me leverage and then also creates opportunities outside the W2 so that I can actually build a personal brand and build a business around that. I remember the exact moment when I realized that I needed an exit plan. At that point, I was three years into a role at Splunk, which is a hyper growth company that we grew from in five years from $100 million in revenue to a billion dollars in revenue. I was getting sucked into the 24 by seven lifestyle of continuing to grow a team, continuing to innovate. At the same time, my wife and I, in April of 2014, had a set of identical twin boys. Those were our second and third sons. So we had three sons all day. Our oldest son at that point was 18 months old. And I had another 24 by 7 lifestyle of these brand new sons that needed help from mom, needed help from me. I mean, my lifestyle was so compressed that it was literally on commutes on trains that I was getting the majority of my sleep. At this point, I wasn't just busy. I was buried. And what I'm telling you sounds normal. You have heard this in, in your day to day and in your, in your life as well, because we know as technology employees, while we get this exciting front row seat to the future, it pulls us into this 24 by seven lifestyle. And then we ultimately get to this point, like I did, where I said, I need an exit plan. Now it's important that you understand that what I'm talking about today, this exit plan, is actually part four in a series that I've been talking about from equity to exit. What I wanna do to ensure that you are confident in making decisions around tech equity, managing the money that comes with it, building a lifestyle by design, is giving you all of my core frameworks. So the four pillars started with episode 81, which was the foundation of, How do you strategically work for tech equity as a wealth building strategy? Episode 82 was how do you leverage expertise to get more equity, and then also leverage it in your exit to build a brand and a business around it so that you can have opportunities outside of your day job. Then there was episode 83, which is building your evergreen portfolio. This is the engine to financial independence, and it's truly something that is built as a business. Today, what I'm walking you through here in episode 84 is your exit plan. What do you think and what are the steps to actually start moving from being buried to actually exiting into a life that you have designed for yourself and for your family? Okay, here is the secret about the exit plan. It's not all or nothing. It's not binary. It's not whether you're exited or not. It's actually a series of small steps that you take over and over again and you learn how to do it. The first step to independence is creating margin. Do you have any? Do you have any margin right now? If you don't have any margin, hit it in the comments below. Let us know that you're tapped out. I want to hear about it. But before we get to understanding an exit plan, let's talk about where we're moving to. So you want to understand the five freedoms of lifestyle design to understand where you're going with your exit plan. So in lifestyle design, freedom number one is time freedom, where you have the freedom to choose where you spend your time and who you spend your time with. Freedom number two, as we all know, is financial freedom, or that's the one that people are most familiar with. And that is where you have income coming in to pay for your bills, to pay for your lifestyle, and you're not dependent on a job or another source of income to be able to take care of yourself financially. Number three is geographic freedom. That's the freedom to work where you want all over the globe. Nobody tells you where you have to show up. You can be wherever you want. Number four is then the freedom of purpose or mission. Many of us choose the mission of our work and we're helping advance those, but we start finding later in life that we have talents, abilities, and problems that we can solve for people. Like here, my mission is to help educate other technology employees when it comes to equity compensation and managing money so they can be confident and comfortable when they're making their most important decisions. It's my personal mission. You may have yours, but when you get to a freedom in your lifestyle design, it's where you get to choose. And the fifth one is freedom of relationships. because sometimes we don't realize that we are bound, whether it is by geography or whether it's by time constraint, but when you have those other freedoms, it opens up the ability to be free to choose other relationships outside of your normal network today. So now that you have those freedoms and you understand what those are, it's also key to understand that the freedoms work together. The simplest one that many people understand is if I have financial freedom, if I don't have to work 40 hours a week for a paycheck, if I'm able to work 10 hours a week managing my portfolio, then I have an additional 30 hours a week where I can choose. I get time freedom because I have financial freedom. Those things come together very easily. It also works the opposite way as well. If you are working and you have a lot of income, but you also have a very large expense line because you've decided to buy the more expensive car, the more expensive house. then you want time freedom, but you can't get it because you have to keep working to continue to pay those expenses as well. So because you lack financial freedom and you actually have a very large financial constraint, that actually keeps you from achieving time freedom. And because you don't have that time freedom, you don't have the freedom of mission and purpose and relationship, right? You start getting the idea of how they're all related. And so when you understand those freedoms, and you understand that I wanna get to where I am today, constrained, feeling overwhelmed because I don't have any time, because I'm working for the money, or I'm also working for my identity, which could be a thing too, then you start understanding that what an exit plan is, is it's moving from this constrained environment to more of an independent and free environment. Now, I know that that sounds really fluffy, And it may, but the reality is, is this is ultimately how it works to get to the point where you can create a true lifestyle by design, where you're picking off items of the menu of financial of the five freedoms and you're choosing, do I want geographic freedom? Do I want time freedom? Like, what do I want? It starts by slowly getting less constrained and getting more free. So let me draw out a story for you and actually give you a real example of how you can do some of your first iteration to freedom. When I started, as I mentioned before, I wasn't busy. I was just buried. I literally had no margin. I had no time freedom. So if I wanted to start creating an exit plan, if I wanted to start even planning towards financial freedom, how do I get there? Well, I realized I had to start making incremental steps towards time freedom. But the reality is, I had zero margin as I was running in between meetings, as I was running to change diapers, as I was in the middle of all this chaos. When I started thinking about creating these little freedoms in my life, these little moments, I realized that I had to create more time to actually get margin back. So what I chose to do was two things, two steps, and these are things that you can do as well. So I want to share this with you. How do you create more margin? Number one was calendar blocking. I realized that if I wanted to create more margin at home, I had to create more time at work. So what I did is instead of leaving my calendar open all day and just having some meetings blocked off, what I did is I would block out time in my calendar to do my work. I would label that deep work or I would label that, you know, meeting, working on X project, working on Y project. But I started defensively blocking my calendar and providing friction for people to just come and take my time. That was number one. Number two from the calendar blocking was then looking at all of my meetings and doing a detox and asking myself, what were meetings that I didn't need to attend? What were things that I could move off my calendar and actually get more work done during the day? This was an exercise that got me an additional you know, five to seven hours a week just starting. And over time, I was able to get back around 10 hours a week, which is very powerful, which allowed me to get more of my work done during the day and not take things home with me. The second thing that I did was I altered my sleeping schedule at home so that I started waking up at 4.30 in the morning. I know many people are screaming, why 4.30? It was out of necessity, but I knew that if I got up before my kids got up, I knew if I got up before my wife got up, I could carve out another 90 minutes. Which, you know, times five, that actually got me another seven and a half hours a week. The point I'm trying to make is that if you can leverage the calendar blocking, if you can leverage, you know, this strategic time creation, as I call it, you can start getting the margin back. Now, what do you do with that? Once you have this margin, then you can start taking that time and investing it in getting other freedoms. So for me, I took that time margin and I really started focusing on how do I build my portfolio as a business? How do I start generating income to replace my paycheck? So that in three, five, seven years, like at that point, it wasn't still clear, but I knew I had this vision that by the time my kids were seven, eight, nine, I wanted to be having enough income that I could be planning to exit the workforce. I know that these are small, little steps that you're taking that's all on this journey to freedom. And it may seem small and minuscule now. But the reality is, the more that you create opportunities like this defensive calendar blocking, like the strike strategic time creation, they can help you build that. They can help you build this bridge to your ultimate exit plan. If you enjoy strategies like this, I would also check out our newsletter, Tech Equity and Money News, where I share frameworks every single week. We publish every Tuesday at 4 p.m. Pacific, 6 p.m. Central, we publish a newsletter that helps break down strategies like this because ultimately it's these small little building blocks, these small little frameworks that are going to then help you build up this rhythm that's going to help get you to your ultimate exit. So you've made it this far. You understand what an exit plan is. For those of you who stuck around, now we're gonna get into understanding what are some mistakes that people make around exit planning. And then I want to break down and walk through with you. What are the steps that you need to create your exit plan today? Many people make the mistake thinking it's all about the money. What that means is that they focus so much on just shoveling money to the bank. How can I get more responsibility? How can I move up the ladder? How can I get a greater salary? How can I get more equity? And they keep building this pile of money that they don't focus on or spend any time thinking about the exit plan, thinking about how they actually become the CEO of their own portfolio and managing that money to work for them so that they ultimately stay stuck. That's one of the biggest mistakes they make is just focusing on the money. The second one is emotional decision-making. One of the things that we have to be so careful with as technology employees is that burnout is real. We can get stuck in a 24 by 7 lifestyle for a number of years and get to the point where we are mentally and physically exhausted. so that our exit plan—I'm using air quotes for those listening—our false perceived exit plan is running away from something instead of intentionally building and moving towards something else. When fear and burnout lead you to running from something, You know nine times out of 10 you're going to make poor emotional decisions and it's not going to be based on a clear plan. So your exit plan degrades because you're making these emotionally laden decisions. That's the second mistake that many tech employees make. The third one is a simple one that many people can make on many things, which is analysis paralysis. They don't understand how things work or they keep iterating on the plan, but they don't move towards taking steps to freedom because the reality is you have to work for it. It's hard work. and you have to get uncomfortable as well. And then the fourth one and the most powerful one is that some people think it's all or nothing. I'm either going to be walking away from my job 100% financially independent or I'm not. What they lose in that type of thinking is building the skill of understanding how creating freedom works. And I'll give you an example. I have a friend of mine, and this is, again, a mistake in their exit planning as they felt stressed out by work at a technology company. So they wanted to become financially independent. They wanted to generate their own income. So they bought into a franchise. It was a small business franchise, not a restaurant franchise, but a small services industry franchise. And what happened is that starting that business was incredibly hard. They put a lot of their own money into it, and they soon found out that they were at greater financial risk and were working harder than they ever had in tech before. But what got them there is that they'd made a very emotional decision and just wanted to get out. So they sort of, without thinking, without talking to a lot of people, or talking to people and people saying, don't do that, they said, I'm going anyway, because they so badly had to get out of tech. It's one of the things I want to caution people around and make sure that as I walk you through how you structure an exit plan, make sure you hit every single step of this. It's a five-step plan. It's very simple and straightforward, and it's iterative, meaning you can start small like I did. and focus on just creating some simple margin in your life before you get to the point where you're building a complex portfolio that's going to support you and your family, generating hundreds of thousands of dollars. So let me walk you through it. Creating an exit plan, your step-by-step guide. Step number one, define your destination. I want you to get crystal clear about this. What is it that this one step of freedom is going to get you? And again, this is incremental. So for me, for example, I knew that I wanted to try and get 10 to 15 hours a week that was my time. I didn't have to share with anybody else that I could use to start understanding how to build my portfolio as a business. That was important for me. Maybe for you you want to start getting some margin so that you can plan how you get a remote job because you want geographic freedom or maybe you want to carve some independent time out because you want to go work on something for your mission. Right, you want to go and contribute more to society and solve some big problems. Whatever it is, write it out. Maybe it truly is financial independence. You've been building for a while. You have a robust portfolio. You're getting ready to take the leap and you want to write down and understand your destination. What does your life look like then? Just make sure you have clarity on your destination. Identify what you want to do, what you want to achieve, and what you want to do once you get there. Also list out what you are willing to leave behind, because there may be sacrifices along the way for whatever you're choosing. Just make sure you have clarity with what you're doing. Define your destination, step one. Step two, establish your why. I will tell you right now that if your reasoning to get to financial freedom is just that you want time, period, and that's it, you will quickly lose that goal. We as human beings need greater purpose, greater mission in our lives. So you need to choose something that's larger than yourself. Is it something that you want to serve? Is it something that you want to do? I know for myself, my goal for financial freedom was that I wanted to be free and not have to work a W-2 job so that I could walk with my boys, from being middle schoolers to being young men. That was my vision, my goal. And now my goal in time is evolving, or my goals are starting to evolve after that, now that I've achieved this. But you need to make sure that you define your why and make sure that you're calling out, what are you going to do with your freedom? What are the benefits that are larger than yourself that you're going to get from this? And what's the impact that you want to create? Those are things that are going to be incredibly motivational when you have these hard days that you're trying to figure it out. So then once you get your plan, you have to reverse engineer it. How is it going to work? This is where many people stop. They have, they get to the point where they say, okay, I understand like my destination. I have a reason why I'm just going to make a move. Whoa. Understand how the math works. So I think for many people for financial freedom, they say, I want to replace a paycheck. Okay, so if you want to replace a paycheck, what that means is that if your current paycheck today is $150,000, you need to deploy $1.5 million in assets that are generating 10% cash on cash return to generate $150,000. Simple math. Or you could, hey, maybe I want to actually deploy $750,000 in assets, get $75,000. And then I want to have a consulting gig that brings in 75K a year. That's okay too, but you need to plan your exit, especially if you're doing it from a financial perspective, you have to have the details of your expenses, how you want to live, what's the income that you're going to generate and make sure that those things tie out very clearly before you just take the leap. Otherwise, you could have a hard landing. So step three is to reverse engineer your plan. Step four is you need to prepare your resources, right? If you're going to go on a journey, do you just walk out the front door and go? Well, maybe if you have a credit card in your hand and car keys, you know, you can drive wherever you want and you have, you know, money that you can buy the resources you need. But if you're going to go hiking in the wilderness, you need to have a backpack. You need to have your food. You need to have your supplies, your equipment. It's the same thing when you're planning to go into an exit plan. Whatever that is, you need to plan it. I know for myself early in my career, I wanted geographic freedom. So I found a role with a company called Accenture that would allow me the ability to be on projects to travel within the United States and also get international posting. But guess what? When I got there, my skill set at the time just allowed me to be in an office in San Ramon, California, just commuting every day and being there. What I realized is that to get to geographic freedom, the resources that I needed were I had to build skills and I had to build relationships. And when I built those skills, and I built those skills in the Salesforce.com technology, and I built relationships with senior executives that had contacts in different areas, I was able to start getting staffed on different national projects, and then eventually spent some time living in Asia, fulfilling my geographic freedom dream because of that. Step number five, the next one is you want to execute incrementally, meaning that as you've done your preparation, you have your plan, start executing it step by step. A great example would be for my financial freedom. One of the things that I did was in 2019, I left a full-time role and I just let people know I am taking a sabbatical. I didn't let them know that I was leaving my career. I said, I'm taking a sabbatical. I had my portfolio up and running at the time. At that point, I was replacing probably around 75% of my paycheck. So I sort of experimented and let it happen. I watched over the next nine months my income, my expenses, and saw how some things changed, some things stabilized, and I realized that I wasn't ready. I wasn't ready for financial independence. I had to go work for some more equity. So I went and looked for another role and took an opportunity at GitLab that I took through an IPO in 2021. But what I did is I did it incrementally. I built something, tested it. found out what worked, what didn't, went back and made the necessary adjustments on the preparation. I had to go get some more actual equity that I could invest to generate more income to get me to the level where I could have a complete exit. Are you getting it? Are you seeing how it all works together? It's a five-step exit plan program where you define your destination, You make sure and write down and state your why. Number three is you reverse engineer your plan. You need to understand how you're going to get to where you want to go step by step. Then number four, you want to make your preparations. Do you need skills? Do you actually need assets? What is it that you need to start moving forward? Then execute incrementally. Make sure that you're testing every step by step to make sure. Because when you ultimately get to the step where you are moving beyond the W-2 and getting to that place of financial freedom where you no longer need the W-2, you want to make sure that you're 100% ready for that in all things. And you're not unintentionally burning a bridge if you still need it open. That was a lot. If you have any questions, if you have any comments I want, especially if you're on YouTube, go down below, hit the comments, ask me questions. I will answer all questions. If you have questions on financial independence, how to get there and all of these things. But ultimately that five-step process will work whether you're doing something small or whether you're doing something large. Just remember, Freedom is not a dream. It's a decision. So what is the first step that you're going to take? What's the step that you're going to take? We talked a lot about some different things today. And I think where it's important that you understand is identify what is that freedom area that you really need some freedom right now to number one, know that you can do it. And number two, feel that celebration that you can start moving in that direction. Is it time freedom? Is it geographic freedom? Is it freedom of network? Do you really just need to carve out some time so that you can go and meet some people that are doing something different, maybe networking into another company? I don't know. Number two is to create some initial margin. Like I know so many tech employees are busy and I know that you need time to learn, you need time to focus on things outside of work. So make sure that you're creating margin. During these hours, build skills. During those protected hours, understand whether it is a new technology skill that's going to get you to a new company to generate more equity, or whether it is truly learning to manage the money that you've already built so you are the manager of your own portfolio so you can get to a financial freedom exit. Test freedom in small increments. Take small things. Test. Start with your time margin. Keep managing that. I mean, that is something that ultimately helped get me to the point where I was able to carve back more and more time to be able to build outside of work and get to where I am today. And then just like in tech, when you find something that works, scale it, scale it, keep growing it. These are the things right now that if you take action and you're able to identify that freedom area, you can create some margin, build skills during those protected hours, test the freedom in small increments, and then get to the point that you're scaling what works. This in and of itself is a plan to get to an exit. I just need everybody to remember the one key takeaway here is freedom is not binary. It's not. It is something that is built incrementally, step by step over time. So I want you to start today with just finding one thing, one freedom that you want to work on and then continuing to iterate it on the exit plan. Wow. Wow, what an episode. I mean, there was a lot there. More than anything, I hope that you're walking away with actionable insights. I know that when I was sitting in your shoes, more than anything, I wanted to hear somebody talking about their real experiences about navigating equity compensation, money, and getting to freedom. This is why I'm sharing it with you. More than anything else, I want you to be able to learn, feel confident in your decisions, understand what works and doesn't work from people who've been there and done that. This episode, we covered a lot. We delved into the five freedoms. Right? We have time freedom, financial freedom, geographic freedom, freedom of mission and purpose and freedom of relationships. We also covered off on my strategy of how do you actually build margin? How do you go in there and build some margins so that you can start having some space to start eking out more and more freedom? I define for you what is an exit plan. An exit plan is moving from constraint to freedom. Okay, I have less time. I have more time. I have less financial freedom. I'm starting to build my way towards financial freedom, right? I don't have any geographic freedom. I can travel a little bit more to ultimately You know, I have the keys to the globe. The other thing that we learned that's so important, right, is we talked about the four mistakes that people make. And I think the biggest one is people not understanding that an exit plan is not binary, that you can get a little bit more freedom through increments. And this is where I tried to break down some steps, how you can identify a freedom and start iterating towards it today. Ultimately, I just want to know what resonated with you, right? I'm here creating content for technology professionals today that are in the fight, that are in working for these companies, advancing the future of work, advancing the future of technology and devices that influence our daily lives. I want to know from you what resonated. I want you to hit me in the comments. If you want to reach out to me, join the newsletter, techequityandmoneynews.com. Take a newsletter and reply to it. I answer all emails. More than anything, we're trying to build here at Tech Equity and Money Talk is a forum where we can have these open and honest discussions, help us understand what really resonates with you. So make sure that if you haven't subscribed to the podcast on YouTube, make sure you hit that notification bell. We drop episodes every Tuesday. We also drop reels every day. If you're on audio, make sure that you follow us on Apple, Spotify, Amazon, wherever you listen to podcasts. And then also make sure that you subscribe to TechEquityAndMoneyNews.com. If you go there, subscribe to our newsletter. Every Tuesday at 4 p.m. Pacific, I release a new framework. I released a new strategy to help you grow your career, build wealth, and live the life that you ultimately deserve. Thanks for being with me on this episode. We'll see you on the next one.