In Episode 9, I talk to Java Wealth founder Mike Zung, CFP® about what to consider when you take a new tech job, how you can use equity compensation to make a broader impact in the world, and why he became a CERTIFIED FINANCIAL PLANNER™“It's definitely the approach that I take with clients, whenever I say "speaking the language", right? That's the language that we speak because personal finance can feel like this giant thing where it's, " Oh God, there's so many things that I have to figure out." And it's like no, we'll just do it basically as an agile project where it's okay, we just figure out what's the highest priority right now and we're just going to focus on these next couple of things and essentially work it as sprints.” - Mike Zung
This week on Real Life Planning Podcast, Cynthia and Mike cover:
“Being in a tech career, there's a lot of opportunity from that. There's a lot of blessings that come from that. What I find is that a lot of people feel the same way. They believe in other causes that it's not just about them and that they're wanting to pass that on in the best way that they can. ” - Mike Zung“...we really want to encourage people, if you're in this position for the first time, is to do some thinking and planning ahead of time so that you're not rushed in making decisions on how to handle your equity compensation” - Cynthia Meyer
“Your company's stock value is going to go up and down more than you would probably like to emotionally stomach. By having a plan in place that you've said out loud, "This is what we are going to do", then that takes a lot of the emotions out of it. Takes a lot of the FOMO out of it. There's less regret. You're able to sleep at night and then you're able to just burn your calories doing the stuff that you really care about doing.” - Mike Zung
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About the Real Life Planning Podcast
Host Cynthia Meyer welcomes fascinating guests to share real life stories of how they are realizing their financial potential. Each episode explores practical, realistic steps to create results.
Transcript - Real Life Planning Podcast - Episode 9
[00:00:11] Cynthia Meyer: So you've got a job in tech. What do you do next? Today on the Real Life Planning podcast, episode nine, we're going to talk about that very topic with Mike Zung, the founder of Java Wealth. Mike, thanks very much for being with us today and tell us a little bit about yourself. What's important to know about you?
[00:00:31] Mike Zung: Yeah. Yeah. Thanks. First, really happy to be on. So a little bit about me. I am a CERTIFIED FINANCIAL PLANNER™ but I changed careers and I actually spent almost 20 years in tech. And so naturally, I work with people that are in tech. I know the lay of the land and know a little bit more about the career path and different things that you've got to think about whenever you're getting into the world of tech.
[00:00:52] Cynthia Meyer: That's absolutely fascinating. How did you decide to become a financial planner?
[00:00:56] Mike Zung: Yeah, so, so really with becoming a financial [00:01:00] planner, for me, it was actually somewhat of a, I don't know, it might sound a little bit morbid, it was having this deathbed thought of if I were to look back on what I did, like just thinking of what I wanted to leave in this world, I felt like I was really driven to trying to make a real direct impact with people and just in the way that I worked with people. Personal finance was one that really spoke to me and just wanting to like really get into the weeds with people. Money is a pretty taboo subject to talk about. So it was more of a thing where it's okay I'm actually going to pursue this profession of being a financial planner.
[00:01:36] So be able to have these conversations. With tech, with being in tech, I loved it. The career was great. I loved all the people that I worked with and everything, but it was just something where it's like wanting to have that connection, direct impact with people that I was searching for.
[00:01:50] And so that's what brought me to switch careers.
[00:01:53] Cynthia Meyer: So I love this story because I've been having these conversations with Daniel Yerger, who was in the XY Planning Network [00:02:00] with us and he was on the podcast recently about his new book he wrote called, Getting In The Door, about how to get started as a financial planner.
[00:02:07] But you, like me, were a career changer into financial planning. I find that a lot of career changers have a very specific impact that they want to make that comes from their life experience. Does that ring true for you? And if it does, what's the impact that you're hoping to make on the folks that you work with?
[00:02:28] Mike Zung: Yeah. Yeah. It definitely rings true with me. Just as far as, just why I did it. Maybe it's a thing where, you know, whenever you first get out of college and whatever you get your degree in and that you go into that field. Just somewhat out of default, but I don't know, maybe getting into it cause I was 40, 41 whenever I first started doing it, that it's a little, hey, this is a passion. This is a choice that I'm making after all the years of life experience, I'll say. So yeah, that's definitely the thing that kind of spoke to me. And then as far as like working with other people in tech, I just feel like I relate very well with [00:03:00] in the fact that it's a very blessed career to be perfectly honest.
[00:03:04] There's definitely a lot of opportunity that's out there. It's a thing where it's like trying to harness some of the power of that opportunity to turn it into a life that you want to lead. And then also trying to maximize your charitable giving and different things like that, to where it's you really have both, the flexibility and the means to make a real impact to other people as well. I'm just trying to facilitate that as much as possible.
[00:03:30] Cynthia Meyer: I think that's really interesting. The impact that you're making on the folks that you work with is really coaching them on how to use the blessings of a tech career to make an impact on others. To make it both in their family and in the world and community at large.
[00:03:47] Excuse me, more coffee is needed. And I don't have any either with me.
[00:03:52] Let's talk about that. If somebody comes to you and they're in a new tech job, whether it's their first or their first big [00:04:00] job, maybe they've got a nice equity compensation package. They have restricted stock or restricted stock units. They've got options, either non-qualified or incentive options. They may have the opportunity to participate in their employee stock purchase plan. So all of a sudden they're faced with all of these big decisions about how to maximize that equity compensation in their employee benefits. What do you tell people? What are the questions that people should ask themselves when they've got their next big job in tech?
[00:04:30] Mike Zung: Yeah. Yeah. That's a very big question. So I'll see if I can break it down pretty well. I guess first it's just understanding what that total compensation package is. I guess even if we take a step back a little bit, as far as like you're trying to get your first job in tech and doing a little bit more than negotiation part of it. There's definitely room for negotiation. I want people to feel empowered to actually ask some of these questions because what you go in with is it's much easier to negotiate that rather than once you're already in the job [00:05:00] and then trying to negotiate any sort of raises or any other compensation, things like that. Be empowered to negotiate. Especially, negotiating on the equity compensation side too. Higher salary is definitely, that's more conservative. I don't know if I should say conservative, it's a big part of it, for sure. But the equity compensation is not something to just brush to the side necessarily. Whenever you do have that equity compensation, it's understanding what exactly you have.
[00:05:25] We're not taught personal finance in general as it is, but we're definitely not taught about what stock options are and how they work and all the different nuances of everything. It's just really important to understand like what these things actually represent.
[00:05:38] In general, equity compensation, it's just a way for the company to say, "Hey, I want you to participate in the success of the company." It's a way for the company to say, "Hey one, I want you to stick around because there's going to be vesting schedules tied to them." You participating in the success of the company means that the stock price goes up, your equity compensation is worth more.
[00:05:57] Cynthia Meyer: There are so many planning issues around that with some [00:06:00] very specific tax implications to all of those decisions. Those implications are probably beyond the scope of what we're going to talk about today, but we really want to encourage people, if you're in this position for the first time, is to do some thinking and planning ahead of time so that you're not rushed in making decisions on how to handle your equity compensation. So all of those things, restricted stock units when they vest to have tax implications, exercising options has different kinds of tax implications, depending on what you do, and getting ahead of that and planning for it is part of your job as being a tech employee or any employee with stock.
[00:06:38] Mike Zung: Yep. Yeah, exactly. As far as all the different things that go into like the different planning issues, one of the biggest ones, like taxes is definitely a big one. Taxes, because it can be complicated. With RSUs, for example, the main one with that is just understanding that what happens when that money is considered income to you. Yeah, just real quick with RSUs, the way that [00:07:00] I frame it with people is that okay, whenever your RSUs vest, so April 8th, your RSUs vested. So whatever that value of that stock on that day, it's like you just got a cash bonus in that amount. Say your RSUs are worth $10,000, for example. It's a great RSU bonus, right? And so that, like you get a $10,000 cash bonus, they're going to withhold for taxes and then the remainder would hit your checking account. So let's say there's, $7,000 that hit your checking account. And then it's having that decision of, okay, if you had $7,000 that hit your checking account, would you take that $7,000, go to E-Trade or whatever platform and buy your company stock with all of that money? Most people say no. Doing that exercise just helps you understand what you should do with those RSUs. Should you hold on to them or should you sell them?
[00:07:49] And then, yeah, just like what I was saying with the tax perspective of just understanding how much is being withheld for taxes, because if you're in a higher tax bracket, then they actually might not be withholding [00:08:00] enough. And so a lot of people with RSUs get hit with a pretty big tax bill.
[00:08:03] It can be ugly. That's just an example of, "Hey, I didn't completely understand this equity that I had." It's trying to plan around that and avoid that.
[00:08:10] Cynthia Meyer: Yeah. And so for those people who are listening, who are saying to themselves, "Gosh, I really haven't been thinking about this." One of the first things they can do with their financial planner or their financial wellness program at work if they have one, is to figure out either entire tax withholding for the year. Taking into account that they might have some equity events during the year that they are going to have to pay some higher taxes on.
[00:08:33] That's a really excellent point, Mike. What are some of the other things beyond equity compensation that the person with their new maybe, lucrative tech job should be thinking about?
[00:08:45] Mike Zung: I get into with some clients that, honestly isn't necessarily, specifically in the realm of financial planning is what's your career trajectory? What's your path? What do you want to do? And so it's thinking of like how does it position you for the future? [00:09:00] Is it something where it's like, Hey, I believe in this company, this is what I want to do. And you're staying. Or is it like, just trying to figure out where your path is from there.
[00:09:07] So with tech, things move really quickly. You're constantly having to learn. So, like I named my firm Java Wealth because Java was the programming language that I use and it's still used now, fast forward, 10 years into the future, it might be completely archaic. It actually might be there already. So it's just like understanding where you want to go and just making sure that you're still learning and getting that experience in order to position yourself for the next thing.
[00:09:34] People move around a lot in tech. But it's a thing where if you're happy with where you are, then, stay with it. If you like the people, if you like the work that you're doing, cause we're all just trying to find, a place where we're happy with the work. We believe in the work and everything like that.
[00:09:48] From that perspective of the career, that it's just knowing where you're going and understanding the continuous learning that goes on with tech, too.
[00:09:56] Cynthia Meyer: And what about this coaching that you do with [00:10:00] clients about how to make a larger contribution to their community or to the world? I really enjoyed a conversation that you had on your YouTube live stream. Maybe about a month ago with Meg Bartlett about coaching clients for being more philanthropic and for charitable giving. How did that become part of your practice and how do you coach people through that process so that they can make maximum impact?
[00:10:23] Mike Zung: Yeah. Yeah. So as far as how it became part of it, I guess really for me, it's just part of my core beliefs, and not that I'm projecting my beliefs on my clients or anything like that, but it's just " Hey, this is something that I really believe in and stand behind of being charitable."
[00:10:38] Being in a tech career, there's a lot of opportunity from that. There's a lot of blessings that come from that. What I find is a lot of people that they feel the same way. They believe in other causes that it's not just about them and that they're wanting to pass that on in the best way that they can. The most obvious one is just from a charitable contribution perspective. I work with [00:11:00] clients as far as how to get started because a lot of times it's a thing that people want to do, but they just haven't worked those muscles. It's just taking those first steps of doing that. Then we'll get further down the line as far as like sending up donor advised funds and things like that. And then tying it into the equity compensation.
[00:11:18] A lot of times, people will have stock that has a lot of appreciation to it. That's basically gone up in value a lot. So a good move for whenever you have a lot of appreciated stock is to donate that directly. So I work with clients to understand the impact of doing that and how it benefits both the charity in a much better way and then as a by-product it also benefits the client better from a tax perspective too.
[00:11:42] Cynthia Meyer: I think that's wonderful and it reminds me that 's something that my husband and I try and do our arrears, figure out what are we going to give in cash and what are we going to give in stock. But to remind clients of this, that they can do this. I think it is really helpful thing that a financial planner can do.
[00:11:57] Tell me a little bit more about [00:12:00] your personal journey as the owner of a investment advisory firm. How is your work different today? Obviously there's the subject matter, but how has the pace of your work different today than it was when you worked full time?
[00:12:14] Mike Zung: Yeah, so it that's a great question. So as far as the difference one, the obvious differences is that I'm working from home all the time. So I don't have the, I don't have the commute. I was about to say, yeah. I was working full time in tech and I actually quit at the very end of 2019.
[00:12:31] So beginning of 2020, I'm like, "Oh, this is awesome. I'm working from home." All my buddies, they're suckers. They're driving into work. And then, we all know what happened after that. So we're all working from home now. As far as the pace goes, there's definitely more flexibility that I have as far as like when I work. But honestly, whenever as I say some of these things, that's just the general way that tech is going too. Where there's a lot of flexibility as far as when you do your work. The approach now in the tech [00:13:00] world is a lot more of just, " Hey, as long as you get all your stuff done, I don't care if you're logged in between nine to five. Just get your stuff done."
[00:13:06] I think it's somewhat similar as far as that goes. Obviously, the actual work that I'm doing and the conversations that I'm having with people versus in the tech world being just basically going from meeting to meeting and scrums and all that other kind of stuff.
[00:13:19] It's definitely different conversations that I have. So whenever I come home, "come home" and talk to my wife, there's a lot different kinds of stories from work than what I used to have.
[00:13:30] Cynthia Meyer: So you mentioned scrum, I'm interested in this because, you can't see it here, but there's a wall of post-it notes. It's my sort of modified system and it says parking lot, do, doing, done. Because I like things to be on the wall where I can see them.
[00:13:43] How did the efficiencies that you learned as a developer and part of a larger team that might have used scrum or done sprints or some kind of similar system? How does that inform your work today with clients?
[00:13:58] Mike Zung: Oh, yeah. It's definitely the [00:14:00] approach that I take with clients, whenever I say "speaking the language", right? That's the language that we speak because personal finance can feel like this giant thing where it's, " Oh God, there's so many things that I have to figure out." And it's like no, we'll just do it basically as an agile project where it's okay, we just figure out what's the highest priority right now and we're just going to focus on these next couple of things and essentially work it as sprints.
[00:14:22] We're just working on a couple of things and then we get that done. Go on to the next thing. From a tech perspective, I was I was a developer. But then I was a tech lead and an architect and all that other kind of stuff. I also filled in the scrum master role and all of that stuff. It's definitely a lot of project management, essentially. Here's technical stuff that needs to happen, but then we also have to translate that into the business side of it. Having to speak these different languages because with financial planning, that gets into these real technical taxes and all that stuff. But then whenever you're in front of a client and talking to a client, you can't speak in the same way as if you would talk with [00:15:00] another planner or something like that.
[00:15:01] Cynthia Meyer: You can't speak jargon.
[00:15:02] Mike Zung: It's yeah. Don't do the technical jargon, right? And so yeah, I definitely feel like my experience in that world has definitely informed my ability to talk both languages. To speak in the different ways. The whole goal is that we're trying to communicate in a clear way that it clicks with whoever we're talking to.
[00:15:22] Cynthia Meyer: Oh, that's fabulous. I've been very impressed since I met you. We started around the same time. You started a couple months after we met each other. I think in content marketing seminar, if you will. A course that Candace Carlton was running and a shout out to her because it was fabulous and we're both doing lots of content.
[00:15:40] You get a lot done in the day, right? You get a lot done in a day and you're just this model of calm efficiency. I think you've got something to teach other financial planners about that. Particularly, those of us who are in the scaling stage. I think you've got something to teach us there. Maybe we can have another conversation about that in particular. [00:16:00] So before we finish up, what are a few takeaways that you would hope somebody who's listening now, who's working in tech, who maybe is a little bit bamboozled by the implications of their equity compensation. They want to optimize that benefit for themselves and their family. They're working a busy job. They may be torn between the demands of work and family and community and what have you. So what would you tell that person? What are the takeaways that you would tell that person?
[00:16:30] Mike Zung: First, don't feel overwhelmed. This isn't just for people in tech, it's just everywhere. We're all doing the best that we can. So first extend yourself some grace, as far as if you don't feel like you're doing things as well as you can. That's completely fine. To that person in that situation, like I said, definitely understand what you have. Understand your entire picture. So the equity compensation, your different benefits, your salary and all that other kind of stuff. It's just understanding what I call, your as-is picture. This also ties into just the way that we do a lot of tech projects skills. What's [00:17:00] our as-is, right? And then we figure out what our TV is after that. Whenever you're developing software, you have your as-is systems. If you just tore it all down and just wanted to figure out, fast forward to two years from now, where do we want to be?
[00:17:14] It's getting clear on where you want to go. Once you spend some time with that of getting clear on what you really value, where you really want to go, then that's when you start making a plan for the stuff that you have coming in. For your salary. For your equity and things like that. By actually making that plan then, what you're able to do is that you're able to take a lot of the emotion out of the decisions that you make. Especially whenever it comes to the equity compensation. Your company's stock value is going to go up and down more than you would probably like to emotionally stomach. By having a plan in place that you've said out loud, "This is what we are going to do", then that takes a lot of the emotions out of it. Takes a lot of the FOMO [00:18:00] out of it. There's less regret. You're able to sleep at night and then you're able to just to burn your calories doing the stuff that you really care about doing.
[00:18:08] Cynthia Meyer: And not second guessing what you should be doing every single day.
[00:18:11] Yeah, that's very wise. It's very wise. So let's close on this question, then. What's the best piece of advice that you've ever received?
[00:18:21] Mike Zung: Oh man, what's the best piece of advice I've ever received? Huh. That's a really good question. There's a few things that are stirring in my mind. Finding what it is that you're really passionate about. I really steer away from that contrite, that saying of, " If you do what you love, you'll never work a day in your life."
[00:18:39] I love what I do, but there's still days when it's like, "Hey, this is work right now." But I do think that it's like finding that thing that really motivates you to where you're not going to look back and think, " Oh man, I just spent the last 15 years doing something like, I liked the people, but man, I really hated what I was doing." Have that empowerment again[00:19:00] to really step out and find that and do that. Whenever you're actually passionate about it, it'll come easier to actually push through any of the tougher times and things like that.
[00:19:10] Cynthia Meyer: I'm very glad that you have been able to use your life and your experience having walked your talk in tech to then turn around and help and coach and mentor others who are coming along that path, as well. To optimize the resources that they've been given, the opportunities that they've been given.
[00:19:27] I really enjoyed talking to you. I always enjoy talking to you and I hope you'll come back on again in the future. And now where can people find you online?
[00:19:36] Mike Zung: First the website is javawealth.com. I'm most active on YouTube, actually. I have a wealth YouTube channel where I have basically talks a lot of the stuff about equity compensation. I also do a live stream. You can find me on Twitter, LinkedIn a little bit. But yeah, those would be the main places.
[00:19:51] Cynthia Meyer: All right. Fantastic. Thank you very much and I look forward to talking to you again.
[00:19:56] Mike Zung: All right. Thanks Cynthia.
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