Now a couple of weeks into the successful Okta IPO, the stock price is nearing $25/share (as of 4-25-17) – you can follow the activity at http://www.marketwatch.com/investing/stock/okta.
In our first article regarding Okta, we addressed the first step in creating a successful personal plan with your Okta equity. Be Honest With Yourself. The logic is that no person but you and your family should decide the best strategy for your equity. Once you have settled into your overall risk tolerance, it is time to start setting clear goals and defining them specifically.
- Create a value-system. Let’s keep it simple and assign a value to each goal on a 1-10 scale. 1 meaning it’s a very low priority “wish”, and 10 meaning you won’t stop until you achieve it and it is a “need”. Somewhere in the middle of the scale is a “want”.
- Create categories of goals that you want to achieve for you and your family. Here are some examples:
- College Funding/Private School
- Real Estate
- Risk Protection
- Vehicle Purchase
- Home Purchase
- Home Improvements
- Wedding Fund
- Care For Parents/Relatives
- Each goal should then have a year in which the amount will be spent – so if you need $300K to buy a house in 2020, it should be defined as a one-time expense. If it’s a recurring expense such as an annual travel budget of $10K, then it would be recurring for X number of years.
- After you have defined your goals and prioritized them, start to determine which goals can be funded by annual income/savings and which goals require more funds from the proceeds of stock/options sales, etc.
- The last step to determining how to fund goals is having a real budget. Be honest about your spending and look for ways to improve. We always recommend looking at the last 2-3 full months to get a solid average of where funds are being deployed.
Defining what is important to you and quantifying it allows for a real path of clarity and financial success. Start defining your goals today and be honest about your financial health. Only good things will come from the process!
Want help in planning your strategy? Contact Us today and we can work on it together.