071: 5 Lessons in Managing Wealth Effectively After Leaving a Tech Career

00:00 - 25:06 | Christopher Nelson: Too many people want to talk about passive income or financial independence. It's just another path. Anything else that you do, if you don't have clarity, a plan or discipline around that, it's not going to go well. What I learned was these incredible five lessons that have really helped shape me and have given me a lot of direction and a lot of focus and have allowed me to get through two years of financial independence. Hello and welcome to this episode of Tech Equity and Money Talk. I'm your host, Christopher Nelson. And I want to give you a view into what are the five lessons that I've learned in the last two years of being financially independent. Financial independence is a goal. For a lot of you, I know that I've, I've talked with you. I understand where you're headed. I've been there for the last two years, and I want to share with you some takeaways, some lessons learned. So August 26, 2022 was when I stepped away from a 20 year career to, you know, take a leap of faith into this void called financial independence. Now, the great news is in financial independence, you can create whatever you want. It's a bespoke lifestyle design opportunity as long as you have that financial engine that's replacing your paycheck. And so one of the things that I found out as I stepped into this is that having a purpose having clarity on your why is critical to keep everything moving forward. It's important that you understand that financial independence isn't full-time recess, it's not full-time vacation, and arguably it could be if you built a machine, if you built a system that created that for you, but ultimately you're still going to have to do some level of work. You're still going to have to keep this engine, this financial engine moving so that you can, you know, continue to stay in that particular state. So having a purpose and having a reason that gets you out of bed every morning that keeps you motivated and moving forward is really important. For myself, my purpose that I established in desiring to get to financial independence was when I had my sons in 2012 and 2014, when It was, I wanted to be able to walk alongside them and have time freedom when they were going from boys to men. I wanted to be very available for them and was able to now, I've been, you know, financially independent for the last couple of years. So I've been able to spend more time with them and am excited about what's moving forward. Now, as I've been financially independent, this vision starts evolving. I really also started to feel a desire to help out my fellow technology employees and pursue some skills and things that I enjoyed, which is being able to synthesize things that are complex into, you know, things that people can easily understand. And so I realized I wanted to become an educator. I wanted to help technology employees understand how to work for tech equity as a wealth building strategy and how to manage the money that comes with it so that they can feel confident and equipped in making their most challenging equity and money decisions as they move forward. That over the last couple of years has evolved to be a part of my purpose that will continue after my boys become men and continues to drive me, to motivate me, to keep me engaged in our community, keeps this podcast going. There are things that I enjoy. I found that it's incredibly valuable to have a purpose. And it's not just me. Right. Viktor Frankl, you know, who is a Holocaust survivor, you know, has this famous quote that life is never made unbearable by circumstances, but only by lack of meaning and purpose. So having a why. Keeping it in front of you, letting it grow, letting it evolve and continuing to nurture it is something that has gotten me to this point of financial independence and will continue to evolve and grow with me as well. And how does this affect my day-to-day? But journaling has become a big practice of mine at this stage of my life. And so talking about my mission and how I'm fulfilling that, how I'm meeting that, how I'm continuing to develop skills to support that, whether that's around, you know, my sons and thinking of parenting skills, or whether it's now my skills as an educator and as a writer, as a speaker, as a coach, those are things that then are, you know, having that purpose affects my day to day. So, lesson number one is having a purpose. That's what I've learned. Number two, a roadmap is non-negotiable. And there's two kinds of roadmaps that I think are important. Number one is a life plan. And if you're not clear on what a life plan is, there's a phenomenal book by Michael Hyatt and Daniel Harkavy called Living Forward, and it describes a method, it's a phenomenal how-to book of how you create a life plan. And a life plan is really, you know, thinking of your time as an investment and you're creating these different accounts and where do you want to invest that? My life plan got me very focused on some of my family goals for my sons, for my relationship with my wife. and my family and how I want to really invest in that and grow going forward that really helped align me with my purpose. That plan was really important to give me this why, this big driving force that helped get me through the long nights of, you know, working at tech and then also working on building my financial independence. And then it's also critical, critical and essential to have a financial plan to really be building out a clear plan of how you're building your portfolio and structuring it in a way so that it can then be your financial cornerstone as you are in financial independence. Having both of those plans is important. If I were to reflect back and say, what's an example of how it guided me in a decision, these plans, I would say two things. Number one is having a financial plan was one of the big determinants that said it's time for us to leave the Bay Area and go somewhere where we could live with less, meaning that we don't need as much money to live the same lifestyle. One of the things with a financial plan is, as I was calculating out, is I was going to have to work much longer through when my boys would be in high school, you know, which would sort of go past the time I wanted to if we're going to stay in the Bay Area. Versus if we looked at lowering our expense burden, deploying our capital, you know, that we had tied up in a single family home, putting it in different places. That strategy allowed us to get to this point of financial independence with a clear financial plan. Having a life plan and showing me where I was investing my time and having a set of accounts and where you want to invest it, one of the things that I realized was as I was moving around those accounts and so as I was moving away a you know, the nine to five account that I was investing a lot of time and effort. What did I want to really replace that with? What did I want to fill that with? This is what then led me to this mission of being able to serve my community and build a platform, build a business around that, a lifestyle business, that I could truly do some good in our community. It was both of those plans that led me to some key fundamental decisions that have helped me not just get to financial independence, the move to Austin really unlocked that for us in many different ways. That may be worthy of an episode of how that move really starts unlocking financial independence for us. But then, you know, this this life plan really helped me see that by building, you know, this platform that I enjoy so much and sharing that's able to help people, but then also just brings me a lot of joy as well to help people solve some of these difficult challenges is something that is going to fuel me and continue to motivate me. as I'm moving forward in financial independence. So that's lesson number two, a roadmap is non-negotiable. Lesson number three is the transition from being a money maker to a money manager. And arguably this can be very challenging because as we build our careers, as we build our careers to be money makers, we identify a lot with that. I, for the second half of my career, really started identifying with myself as a technology executive who helped add a lot of value, move companies forward, help hyper growth companies scale through IPO. That became a lot of my identity, and I got a lot of satisfaction from that. And thinking about how I was going to leave that and transition to, oh, I manage money for a living. I manage our portfolio for a living and doing that as a main job became, it didn't resonate. It sounded different. It didn't sound as sexy, let's be honest. But what I started to realize is that the role of an investor. The role of building out a family investment actually gives me a lot of joy. And while it doesn't have the same, I'd say, external recognition, I think it can bring a lot of satisfaction. As an investor in startup companies, right, I'm in some venture startup companies, being able to advise and provide lessons to companies that are growing and scaling. That allows me to scratch that itch of some of the things that I used to do before when I was inside companies. Now I can actually do that as an investor, continue to participate in the upside like I did when I was an employee trading for equity. Now I've bought some equity and it allows me to, you know, help and encourage people who are, you know, trying to grow and are struggling through some challenges. And then also building a multi-generational family business that is our portfolio. Then it's teaching other people how to do that, doing that in a community with other people, and then also sharing that with, you know, my wife, my sons, my family of, hey, this can help us And we get the opportunity then to participate in philanthropy. That is the ability to, again, impact change. I think of it as investing in change where we're selecting, you know, just like you would an investment. We're selecting these organizations that are impacting, you know, water in Uganda or, you know, reducing sex trafficking here in the United States, making a big impact into people's lives. I realized that while I didn't have that I always thought of it as I stopped building the resume and looking at me to let me actually develop and build a legacy, which is how the work that I've done in the past created this vehicle that creates all this other impact in the world. And I realized that that in the long term is going to be much more fulfilling than what I was doing before. And the transition was hard, but I've changed my mindset to, I no longer want to be in that role where I'm just focused on shoveling the money in, but I want to manage that money in a strategic way to make sure that it's growing for the family and then also making an impact. The most challenging aspect of the shift is also not just this, you know, identity shift, but then also there is a level of letting go of control. When I was making the money and I was walking into work every day and I was doing the work and I was getting compensated for it, there was much more control. But there was also a single point of failure. When you transition from money maker to money manager, you're then actually deploying capital and other people are doing the work And you're now managing the manager, which I did that in my role as well. I had jobs as a chief information officer or vice president and even a senior director where I was managing people that manage teams. So I understood that. But that is more of when you think of the money manager, that's what you're doing full time is you're putting your money into the hands of other people or other companies, and you're then managing them from afar. So you're letting go of control, but you're also doing that in a strategic, diversified way so that then that is going to create a result of growth and income inside of your portfolio that will then deliver that to you. So that was then the third one which is the transition from money maker to money manager. I think it's just something that you need to understand what it is and you need to then manage that transition and be very focused on making the turn from one to the other. Lesson number four was that self-discipline is essential. As you let go of the constraints that were the W-2 that then you created a routine around, when all of a sudden those are gone, if you want to maintain your health, if you want to maintain your relationships, if you want to continue to maintain and grow your financial stability, you need to be disciplined. You know, I've gone out there and I've, you know, listened to a lot of YouTube videos and heard a lot about this, you know, read, you know, the David Goggins books and other things. And I learned, I took a sabbatical in 2019 and I learned very quickly that if I didn't have a structure around my day, around my weeks, around my months, that it would be very easy to fall into, you know, poor health and, you know, just let things go sideways. I think A couple of the mantras that I really make sure that I'm aware of is that comfort is a slow death. If I'm too comfortable, that means that I'm cruising. And if I'm cruising, it means that I'm going downhill slightly. So I want to make sure that I am continuing a journey of self-development, of self-growth. And so, you know, what a day looks like is I go to bed at 9.30 at night and I get up at 4.30 in the morning. And that's Monday through Friday. And I do that because I enjoy it as crazy as it sounds. If you would ask me in my 20s, okay, hey, this is, you know, you're going to become financially independent and you're going to go to bed at 9.30 and get up at 4.30. I would have said you're crazy, but it's something that I enjoy. I like to get up before my family wakes up so that I do have some time to meditate, to journal, to pray by myself, and get my mind around it. I also really enjoy the creative time. I move from that into some writing time. You know, continuing to write my book, From Nodo to IPO, a proven playbook for how to trade your time and talent for tech equity. And I'm also continuing to plan the podcast and write the newsletter and all those other things. That really, again, brings me joy. Then I usually do, you know, work on my businesses between let's say 9am and noon, usually go hit the gym or go out for a run or a rock. And then usually in the afternoon, I take phone calls or I go pick up the boys from school and we get some time together. And then we, you know, go to go to sports in the afternoon. And that's sort of Monday through Friday. Then on Saturday, I like to make sure that Saturday is just around home projects or we get out and we go and explore nature. And then Sunday is family time in the morning and then usually on Sunday afternoon and start planning for the week. whether that's getting groceries or other things, but you know, that's a relatively structured week. And then it's, you know, looking throughout the year, our goal now is to do, you know, four trips a year. We want to have at least two of those being international trips to somewhere that's Spanish or French speaking countries to reinforce this language that we're learning as a family. And then other trips within the United States to visit friends and family and be very intentional about the communities and the relationships that we're building. That is an example of discipline in financial independence that really works for me. The discipline—and so that's just sort of a normal routine, but that also leads in a little bit to—and I'll hold on for a second because number five is you have to run your portfolio as a business, and so discipline applies to that as well. But I also make sure that in this, one of the things that I try to do is I want to create opportunities to get uncomfortable, whether that is physical. So this year I did invest in a cold plunge. So you know, getting in that cold water that I don't like. I'm definitely, you know, raised in the Central Valley of Northern California. I was made for a hundred degrees. I like it nice and toasty. I like to be warm. Getting in the cold water is very hard for me, but I made it a practice to do that, to get uncomfortable or whether it's, you know, studying and exploring, you know, new ideas, new things, even studying and leaning into AI. understanding that as it applies to a writer, as it applies to business, you know, sometimes pushing myself, going on a sprint, developing something, getting less sleep. I mean, all of these things are important because I want to make sure that I am staying, you know, healthy, alert and aware of financial independence. Because I don't want my health to decrease. I don't want my relationships to decrease. And I don't want my effectiveness as a person to decrease just because I've gained this freedom. So that's where I find that discipline, self-discipline is essential. for financial independence. And the last one, lesson number five is you have to run your portfolio like a business. This is one that I think gets misconstrued a lot because there's all of this messaging that's out there. And I know for a while I was somebody who advocated for passive income. And I use that term because I don't think that I was just glomming on to what somebody else had done instead of really understanding the language and what really should be said. But the reality is, when you get to financial independence, you live off of portfolio income. So you amass wealth through tech equity, you get some shares in a stock, I got Splunk stock, converted that to a diversified portfolio, got a lab stock diversified portfolio. I mean, I just built out something that then is working for me as hard as I used to work. But that portfolio has a legacy statement, right? I've defined my wife and I've defined like what we have created this vehicle for the impact, the ability to we wanted to help our children create and contribute, but it is not a vehicle that's going to be used for somebody in our family to just blatantly consume. It's not what it's there for. It's a legacy statement defined. There's also a portfolio thesis of how we want it to perform. In the next five years, we tune the portfolio thesis based on what is in the portfolio. Right now, we're definitely focused on 50% income, 50% growth. I did a podcast episode on my 50-50 portfolio, one of my most popular episodes to date. Go check it out. But this is how we're managing the portfolio. And then underneath that, we allocate that to assets that are conservative and more aggressive based on what we want to produce. And that's not all. We then have, you know, a monthly cadence that we manage. We have a quarterly cadence where we have more intense reviews and then we have half yearly cadence and that's managing our portfolio. That's partnering with our tax professionals. It's partnering with our estate planning professionals to make sure that we're constantly managing and evolving this entity that is a separate entity. It's not something that's integrated with our personal finances and You know, we don't know what's what. No, we have it set up as a business because we want it to build credit. We want it to be able to provide health insurance to us as a business. We don't want to get individual health insurance. We want to be able to take non-deductible expenses and make them deductible. So there's an entire strategy and way that we set this up to manage it like a business. And I think that this is, This is different. That's something that is generally not taught. When you go to a traditional wealth manager, they want to get your dollars into a brokerage account. It may then all feed into your personal accounts, but they don't talk about how do you want to structure this as a business so that over time, this thing, you know, is going to grow and evolve into something that will be a part of not just this generation, but multiple generations as well. And it's interesting that when you think about your portfolio as a business and you think about creating a structured thesis, what this does is it helps you then select the appropriate investments. What I observe and hear a lot from people is that they're going to get investments because they want to go to financial independence, but they're missing this core architecture of a thesis, of a legacy statement. And so they're collecting a bunch of car parts, hoping to put together a car. hoping, they don't really have a plan. And that's the difference when you actually structure and run this as a business. You know, then you can actually manage it to specific goals. And you can make sure that whatever team members you're bringing on, you hold them accountable. And you set this up because ultimately, you're going to be the CEO of this particular investment. of this particular business. Those are the five lessons. So number one is you want to have a purpose. It's critical that you have a purpose. Number two, the roadmap is non-negotiable. Number three, get clear on this transition from a money maker to a money manager. What does that look like for you? Number four, self-discipline is essential. You have to stay disciplined. And number five, you have to run your portfolio as a business. These are five fundamental lessons learned that have been hardened over the last two years and are continuing to drive me forward. in financial independence. Now remember, it's a journey. I think so many people too, that you get misconstrued because you think, once I get to financial independence, I've made it. But remember, it's not. You're literally just taking the road less traveled and you're on this completely different road, but it is a journey in and of itself. And this is essentially why the podcast is here, why the newsletter is there, Tech Equity and Money News. Go check that out if you haven't. We're helping to educate technology employees on, you know, how do you build wealth, leveraging your time and talent to trade it for tech equity? And then also, how do you manage the money that comes with it? So five lessons learned. Thank you so much for joining today.