Case Study 3

From Employee to Principal

Tom knew he’d be giving up the security of a regular paycheck when he left a large consulting firm to become a principal with a start-up video-editing company. But he had sufficient savings to get him through an initial lean period—so long as he managed his resources efficiently.

In lieu of a salary, Tom would receive equity in his new company, but he was optimistic that his shares would yield significant returns over time as the company grew.

Before making the move, Tom turned to SunTrust for advice on building wealth while living within his means. He met with a SunTrust Advisor who created a plan intended to provide sufficient short-term income to meet his personal and business cash flow requirements. At the same time, his advisor helped Tom roll over his existing 401(k) plan into a Rollover IRA and develop a strategy for continuing to make regular contributions.

Tom’s move has worked out well. His company is growing rapidly, the value of his equity is increasing, and he is now working with his SunTrust advisor and a local attorney to evaluate exit strategies, including buy-sell agreements. Tom’s ongoing relationship with SunTrust gives him peace of mind—and the knowledge that he has a solid financial plan in place.

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These materials are educational in nature. The implications and risks of a transaction may be different from individual to individual based upon past estate, gift and income tax strategies employed and each individual’s unique financial and familial circumstances and risk tolerances.

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