Uncertainty is not a new concept within the life sciences sector. Based on recent industry and market news, it is apparent that 2017 will not prove to be any different. While uncertainty can be disconcerting, especially when it comes to your career and your finances, it’s important to maintain perspective. If there is one constant within the financial markets, it is uncertainty.
So how do you make long-term financial decisions when there is no clear outlook for the sector in which you work? How do you stay focused when that stock option you earmarked to pay for an upcoming purchase may not be worth as much as you had expected?
1. Take a long-term approach to financial planning and asset management.
While market volatility and proposed legislative changes can be unsettling, maintaining a disciplined approach to saving and investing can help reduce your stress levels. I am not suggesting you should simply ignore short-term developments, but tuning out some of the noise and staying patient can help you remain focused on achieving your long-term goals. Developing a financial plan and sticking with it in good times and bad can help increase your chances of attaining your goals.
2. Consider equity compensation as discretionary wealth
If you are concerned about the future value of your equity compensation, I suggest you treat your options, shares, and grants as discretionary wealth or as potential bonus income. Now may also be a good time to assess different strategies you can take to help maximize the value of your equity compensation, while also considering ways to achieve downside protection. This could entail selling some shares, hedging your position, using an exchange fund, or donating shares to charity. Of course, you should always consult your tax advisor before making any decisions that could affect your taxes.
3. Always plan for the certainty of uncertainty
The importance of planning for the certainty of uncertainty was one of the most important lessons I learned early in my career. If you would like to discuss any potential changes to your financial plan or asset allocation, please contact me to set up an appointment.
This content is provided for general informational purposes only and should not be construed as individual advice. Please contact your financial, tax, or legal advisor regarding your specific circumstances.