Financial Advisor, Managing Director

Collaborative financial planning and business guidance for Richmond area entrepreneurs and executives.


October 4, 2023
Mark Newfield

The Tech Executive’s Guide to Tax-Efficient Investing in Volatile Markets

Markets rarely stay steady for long, so it’s important for investors—especially executives at technology firms—to know how to position themselves when it seems like ups, downs, twists and turns are the only economic certainties. Due to their often incentive-laden and equity-heavy compensation structures and asset allocations, tech executives are frequently exposed to different types of risks and rewards when compared with other investors.

Working with an advisor who is knowledgeable about the unique factors facing tech executives is vital. The right guidance can help these business leaders forecast and understand their unique tax scenarios, diversify their portfolios, intentionally manage cashflow, and maximize their after-tax earnings. This is particularly true for technologists and executives receiving restricted stock units (RSUs), which can be both lucrative and confusingOne result can be an unplanned push into a higher tax bracket at the end of year.

The planning and preparation that goes into serving tech executives is unique and can be difficult to find. Advisors with extensive experience serving these individuals help forecast clients’ expected tax liabilities, create liquidity to make those payments, and offer guidance for reducing portfolio volatility, concentration risk, and tax obligations.

Tech Executives Think Differently—Their Investments Should Be Different, Too

Whether you’re working at a company that’s recently launched or is long established, RSUs can be a common form of compensation for high performance, as part of a hiring package, bonus, or annual salary supplement. When markets are volatile, RSUs can become even more complicated, because of their  treatment as ordinary income and sometimes volatile value. Furthermore, tech executives often have large concentrations of their wealth tied to their companies and the tech sector as a whole, unbalancing their portfolios.

In order to better manage the implications of RSUs, especially when considering taxes, it’s important to understand and forecast the RSU strike each year. This information can help you assess your expected tax bracket, which will be useful for determining if you should (or can) engage in tax minimization strategies.

Useful tactics for managing your tax liabilities include deferring income to reduce your tax bill, eliminating short-term capital gains, and managing other sources of ordinary income, where possible.

Tech executives’ sector exposure can also leave them overexposed to market sector volatility, which can spiral into a net worth risk or eliminate a source of liqudity at an inopportune time. Naturally, volatility is a corollary of return; however, your returns, goals, and risk should all be aligned and working in concert, not against one another.

Systematic investing, over time, is an effective method for managing risk and maximizing returns. Removing emotion from the investing equation, by automating transfers into an investment account, for example, can be another technique for smarter investing. The same is true for systematic reduction and automatic diversification of concentration.

Work With An Advisor Who Understands the Tech Industry

Financial advisors are not a monolith entity. At Journey Strategic Wealth Advisors, we specialize in providing financial planning, guidance, tax planning and investment management for tech executives. We’re fluent in VCs, PE, RSUs, ISO/NQISOs, IRAs/401(k)s/SEPs, and ESPPs. We know what it takes to foster sound financial behavior and disciplined investing decisions, so that tech executives can manage the market volatility and tax consequences inherent within their industry and across their entrepreneurial endeavors.

To learn more about our tailored financial planning for tech executives, guardrails for tax management and investment philosophy, contact us today.



Financial Advisor, Managing Director

Mark’s role is primarily as lead advisor and client strategist of his division at JSW. Mark’s passion is ensuring that his team is completely focused on properly caring for you, that you enjoy working with us, and that you receive value from everything the team does for clients.


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