On a weekly basis I talk to a lot of big tech engineers that want financial planning, tax guidance, and/or CFO help if they are starting side businesses.
Most of these people are super smart (smarter than me), spend half their work day on Youtube finding all the answers to their questions, are 100% self directed stock market investors, and basically already know what they’re doing.
If you ever watched Silicon Valley where the guys spend their days buying Tesla’s while they “rest and vest”… that’s literally what it seems like they do.
Just kidding, I’m sure they do some work.
This one was a 30 year-old single filer AI hardware engineer living in Bay Area clearing around 400k annual from W2, inclusive of RSU vesting
Here are the strategies that I mentioned, in no particular order:
Mega back door Roth IRA - this is after-tax, but allows for additional ~$70,000 of tax-free growth a year. In the case where a person has an “unfair advantage” in investing (AI engineer), tax-free growth can be significant. If John Doe were buying fixed income bonds and mutual funds with 0.8% MERs, this would probably not be material tax advice.
HSA contributions
Direct indexing
Tax loss harvesting
Donating appreciated stock
Start an s-corp
Get into real estate (some specific tax strategies there that I won’t get into in this email)
Move out of California
Don’t sell anything
If you’re UHNW then strategies like DATs or CRUTs may apply to you.
Super smart and resourceful guy who basically knew all of these already and was already doing #1, 2, and 4.
#3 in my opinion, is usually unnecessary if you know how to self direct invest. The rest are all optional, and you have to be rich to do #10.
If this email doesn’t relate to you, I asked him where the next bottlenecks are in AI value chain (he bought Micron, Sandisk, and SK Hynix early last year)
His answer: energy (power/electricity) for AI data centres
P.S. If someone tries to gatekeep tax advice or ever uses the phrase “tax loophole”…. beware.
P.P.S. I don’t offer one-off tax advice for W2 earners (it’s all free on Youtube anyways)… but as always, if you’re looking for a professional to help you review your individual situation and strategy, I incorporate all the above into the wealth management and CFO advisory work that I do.
Shoot me an email and let me know your thoughts. I read each and every one.