Are Stock Options Worth It?
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- เผยแพร่เมื่อ 20 ธ.ค. 2022
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Equity compensation like stock options used to be reserved only for C-suite executives. But today it seems like most employers are offering them to their workers... but are these "golden handcuffs" worth the tax headache?
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Additional earnings reports from major tech companies, driven by Nvidia, coupled with trader FOMO, could fuel a resurgence in market buying pressure. I'm considering investing over $300k, but I'm uncertain about risk mitigation strategies.
Stock options are phenomenal at companies that are actually making money. Most startups, especially the ones burning cash, either are worthless or are diluted so much that they end up being worthless. Never take a lower salary (cash) for more stock.
Although the companies in my portfolio are solid, last year was a loss. In my first year of investing, I experienced a 35% decline in the March/April sell-off and a further 17% decline in the most recent sell-off. I earn my money via hard work, thus investing makes me anxious and depressed. I'm uncertain if I should sell everything and wait.
I want to invest roughly $700,000 in stocks since I've heard that even in challenging times, investors may turn a profit. Any excellent ideas for stocks?.
Don't forget that in the Diversification section, you might simultaneously lose your job and have your stocks/options plummet when the company or
It is crazy how complicated some of this gets! Thanks for the great video
I sell off company RSUs and ESPP shares as soon as they vest and channel that money into diversified index funds. Holding large amounts of money in an individual company's stock is very risky. Additionally, the time during which a company's stock price goes down is also a time when layoffs may be more likely, increasing the risk further.
Stock options are absolutely worth it, for those already making 6-7 figure salaries. If you make $40K a year, you'll never be able to buy enough to make a significant difference unless you get employed early in the company's history, and you get lucky enough for their stock price to explode.
Friend of mine's boss/founder described the stock options he was offering as "I can promise you enough stock options to wallpaper your house with. I can't promise that won't be the best use for them."
By "options", I thought this was going to be about calls and puts, but yeah, this is probably the far more relevant "options" topic for the Two Cents viewership.
I think another important thing to consider when discussing equity with a future employer is to ask if they have a “clawback provision“. A lot of people assume that if they purchase or receive equity from their employer that they will be able to still hold onto it even if they leave the company. That’s exactly what the clawback provision stops people from doing and a lot of employers don’t tell their employees about this until after they’ve accepted an offer. It’s pretty deceptive imo.
This is the first Two Cents video that gets me really confused because of how complicated the topic is. Kudos to you guys for helping to improve financial literacy for everyone.
My brothers girlfriend is working at amazon she got every year instead of money as a bonus Amazon shares as a christmas gift. And over the years it went up to 100 000€. It can be a really good but depends on which company you are. Amazon's stocks went up a lot during pandemic.
very informative as always! You guys rock!
This is a fantastic video, thank you! It really makes all this stuff easy to understand. I just had my 25th anniversary at the company I work for and it's privately held so I don't know anything about this stuff.
As simple as the explanation was made, this video would need to be watched several times to better understand stock options. My head spinning
As someone working at a startup…this is the only way 90% of companies compensate with “equity” (which it is not)
Thank you for this awesome video! So many startup employees are so young and this stuff is so complicated.
Depends, Microsoft stock option, hell yes!
Making my head spin, thank you for exploring this topic!