See the big picture with your Personal Balance Sheet
Management guru Peter Drucker is often cited for advocating that “you can’t improve what you don’t measure.” When it comes to personal finance, this mantra is also largely true. It’s nearly impossible to make the most profitable investment and financial planning decisions without having a comprehensive view of your assets and liabilities.
To find the path to your best financial future, you need to see everything in one place.
That’s why we developed the Personal Balance Sheet. It’s a one-stop shop to see all your finances, including your startup equity and crypto. The Personal Balance Sheet isn’t the first of its kind — early personal finance tools like Mint.com and Personal Capital let you digitally link financial accounts — but it’s the first with unique attributes for equity owners.
More than a spreadsheet
Let’s use an illustrative client example so see how that value comes to life.
Meet Mary — she’s an Engineer Manager at a Series D technology company. She joined as an early employee, has received several equity grants, and has exercised some of her options. She also holds equity from a previous company. Mary’s also dabbled a bit in crypto, purchasing Bitcoin and Ethereum on Coinbase.
She has a Wealthfront account to manage her money, and uses Personal Capital and a spreadsheet to track her finances. Her CPA was recommended by her parents. The CPA is great, but isn’t particularly familiar with equity compensation or crypto tax treatment.
Personal finance isn’t top of mind for her, though with talk of an upcoming opportunity to sell stock in her company she’s starting to dig in. During the recent tax season, she felt like she was educating her CPA on how to handle her equity and digital assets. Now Mary’s looking for a better solution to ditch the equity spreadsheet and partner with an advisor that has a more modern approach.
Asking the right questions
Here’s where the Personal Balance Sheet comes in. It’s a free tool that lets Mary view all her equity grants, crypto holdings, and investment accounts in one spot. Now with a holistic view of her finances, Mary can better understand her overall asset allocation and get answers to important questions like…
- If most of her net worth is concentrated in equity holdings, should she put her investable assets in lower risk investments?
- If she needs liquidity in a few years, but most of her assets are tied up in illiquid investments, where does she find it?
- Would an advisor help her think through these decisions better?
Mary isn’t sure if she needs a new tax advisor, but wants to start getting some data points before she decides. As a starting point, she leverages the equity insights tool to understand what her tax obligation could be in different scenarios. The major question she has is if she wants to participate in the secondary, should she exercise beforehand? And if she does exercise, will she trigger Alternative Minimum Tax?
By taking advantage of these free tools, Mary’s better positioned for her upcoming liquidity opportunity. And she has a great batch of questions to ask her CPA. And if she’s in the market for a new advisor, that’s just a few clicks away.
See your Personal Balance Sheet
Does Mary’s situation sound familiar? If you have any of the same questions, or want to integrate all the finances that are important to you in one spot, sign up for Harness Wealth and check out your Personal Balance Sheet here.
You’ll be able to Instantly connect online accounts or add investments including your startup equity, crypto, real estate holdings, and more.