Yes, You Can Give More and Keep More

Balance sheet charitable donations allow you to give more to the charity and save you cash.0

As we approach the end of the year, I want to show you quickly why giving from your balance sheet (assets) can give you an advantage over giving from your income statement ( cash flow).

Though tech salaries are attractive, income tax rates in the US and other countries present a considerable disadvantage.

Before the final curtain closes on 2024, consider leveraging year-end tax planning for a double win: reduce your tax burden and fuel your passion by making a charitable impact.

Charitable donations are a way to strategically lower you tax bill and invest in causes that will make an impact!

Most people follow the status quo and give from their income statement. If you have tech equity or stock, this is the most inefficient way to give. You take cash you may need and deliver less to your chosen charity.

Giving from your income statement is a loss for you and your charity.

Making charitable donations from your balance sheet or appreciated assets is the more efficient way to go.

Here's a numerical example to illustrate the difference between donating appreciated stock directly from your balance sheet versus selling it first, then donating the proceeds:

Donating cash vs. donating stock: A numerical example

We'll use a simple example to illustrate the tax advantages of donating assets directly.

Scenario:

• You earned (or purchased) 1,000 shares of XYZ Company stock for $10,000 five years ago.

• Today, each share is worth $100, bringing the total market value to $100,000 ($100/share * 1,000 shares).

• That's a staggering appreciation of $90,000 ($100,000 - $10,000).

Option 1: Sell the stock and donate the cash (Income Statement Giving)

• You sell the 1,000 shares for $100,000.

• You pay $22,500 in capital gains tax on the $90,000 appreciation (assuming a 25% rate).

• You donate the remaining $77,500 ($100,000 - $22,500) to the charity.

• You can deduct the $77,500 donation from your taxable income.

Option 2: Donate the stock directly (Balance Sheet Giving)

• You donate the 1,000 shares directly to a qualified charity.

• You avoid paying capital gains tax on the entire $90,000 appreciation.

• You can deduct the full $100,000 fair market value of the stock from your taxable income.

Result:

There is a stark difference in net benefit of $22,500.

By starting with the Income Statement or "Sell & Donate" option, we see the immediate impact of the tax bite on the donation amount.

The subsequent Balance Sheet or "Donate Stock" option highlights the potential advantage of avoiding capital gains tax altogether.

Maximize your charitable impact to the nonprofit and keep more cash by direct stock (asset) donation.

Please note: This simplified example does not consider other factors, such as individual tax situations or specific rules regarding charitable deductions. Always consult with a tax advisor for personalized guidance on your particular circumstances.

This is a valuable lesson that you can put to work this year.

I hope this helps!

If you want more information on strategic giving or how to vet non-profits, then check out this week’s episode of Tech Equity & Money Talk. 👇🏽

Tech Equity & Money Talk is a Weekly Podcast that explores the process of building wealth through Tech Equity and managing the money that comes with it.

If you like the podcast, support us by leaving a review; please do that now! (LINK)

086🎙️ Give More and Keep More with your 2024 Strategic Giving Guide

🎙️ Ready to transform how you give? This episode of Tech Equity & Money Talk dives into the secrets of smarter philanthropy with financial expert James. 🚀

✨ Discover how donating appreciated assets, like stocks or real estate, can amplify your charitable impact while slashing taxes.
🤔 Learn the three essential questions to vet nonprofits and ensure your donations make a difference.
💡 Explore the magic of Donor-Advised Funds for flexible, tax-savvy giving.
🔥 Uncover how strategic lead gifts inspire others and multiply impact.
🔍 Decode nonprofit transparency to give with confidence.

Hit play and get inspired to give smarter, not harder. Your impact awaits

Micro Journaling for Recovery

When I heard my friend, Mike Kim, discussing micro journaling for recovery, I thought he had lost it. 

After some back and forth, he convinced me to try a small gratitude journal. It did not take long before I appreciated the few moments of clarity, peace and pleasure from answering simple prompts. This was during my last year in tech and we were pushing for and IPO and the pace was crazy. I thought there was no way to take the time.

Since that experience, I have continued to micro-journal almost every day for the last couple of years.

Today I want to show you the benefits and why you should start micro-journaling in 2024.

Micro-journaling is scientifically proven to provide some profound results:

1. Stress less: Jot down worries and anxieties to release them, like mini-mental pressure valves.

2. Know yourself better: Capture fleeting thoughts and emotions to understand your patterns and triggers.

3. Boost mood and gratitude: Focus on the positive by noting things you're thankful for or happy moments.

4. Get creative and solve problems: Spark new connections and explore ideas freely in your mini entries.

5. Remember and reflect: Solidify key events and emotions for later reflection and learning. ️

As tech employees moving in a 24/7 world we can get a huge ROI from from 5 -15 mins a day in this practice to reduce stress and get a mood boost.

Most people fail because they want to write too much or feel like failures if they don’t write daily. This is not what it is.

Micro journaling is a handy tool that can be used on demand for 5 to 15 minutes and, after some practice, will start delivering value.

Here are my new prompts for 2025:

1. The “Story-Worthy” moment: Each Day, write down the most story-worthy thing that happened in your day. This will improve your memory, make you grateful, and give you stories to tell.

2. What happened today that I am grateful for?: Write down 3 to five things that come to mind quickly. This little effort will shift your mind to the positive aspects of your life.

3. What actions moved me toward my goals?: You spend the day executing a company's mission, keep your eye on your goals, and remind yourself of what you are doing to move them forward.

4. Are there any changes I should make? To avoid getting stuck, identify and become aware of changes you should make. Self-awareness is a superpower, and it is the fuel for change.

I will buy a blank journal or use one I have stored up from all my tech conferences and then print and paste these questions inside the front cover.

I will take a few minutes in the morning or evening to jot down my answers.

It takes less time and is way cheaper than therapy.

What do you think? Like it? Hate it? Hit reply and let me know!

When you are ready, there are 3 Ways I can Help You:

1.) Start up-leveling your knowledge - 🎧️ Follow our Podcast

2.) Get our detailed How To Videos- 📺️ Subscribe to our Channel

2.) Accelerate your actions, work with me 🧠 Book a 1:1 coaching session

Disclaimer: This newsletter is for informational purposes only and does not constitute financial or career advice. Always consult with qualified professionals before making any decisions based on the information provided.