How Aggressive Should I Be With My Employer Equity Compensation?
02/26/20 • 20 min
In this podcast episode, I discuss the framework for deciding how aggressive to be with employer equity compensation.
Equity compensation discussed includes Options (at-the-money vs out-of-the-money) vs Restricted Stock Units (RSUs).
In situations where there is a vesting schedule (over a 3,4,5 year period), it almost always makes sense to take the equity compensation (vs cash).
However, I also discuss situations where taking cash would make sense based on personal financial circumstances.
Equity compensation is an amazing opportunity to concentrate and grow your wealth. You just want to make sure you have a plan in place to minimize the tax ramifications and diversify in the long term once you've built your foundation for financial independence.
In this podcast episode, I discuss the framework for deciding how aggressive to be with employer equity compensation.
Equity compensation discussed includes Options (at-the-money vs out-of-the-money) vs Restricted Stock Units (RSUs).
In situations where there is a vesting schedule (over a 3,4,5 year period), it almost always makes sense to take the equity compensation (vs cash).
However, I also discuss situations where taking cash would make sense based on personal financial circumstances.
Equity compensation is an amazing opportunity to concentrate and grow your wealth. You just want to make sure you have a plan in place to minimize the tax ramifications and diversify in the long term once you've built your foundation for financial independence.
Previous Episode
The Fear of Missing Out
The fear of missing out (aka FOMO) is one of the strongest forces that can affect investment decisions.
The best investors are comfortable with accepting FOMO and staying in their lane (focusing on their individual race).
It can be difficult to not let "water cooler talk" affect our investment decisions when we hear about what our peers are doing.
In this podcast episode, I share my thoughts around dealing with investment FOMO.
Concentration gets you rich, diversification keeps you rich.
If you're winning YOUR race to achieving YOUR financial goals, it shouldn't matter what anyone else (or any other individual stock) is doing.
The real opportunity cost should be, "can I still achieve my financial goals" and "does this strategy increase or decrease my odds of success".
I hope you enjoy the episode!
Next Episode
How To Deal With A Market Correction
No pain, no premium.
The unfortunate reality is that to benefit from the returns of financial markets (especially the stock market) we have to be willing to accept the inevitable risk of short term declines.
Declines and periods of volatility happen regularly and are a normal part of investing.
The ups and downs can go on for weeks and months, which can be psychologically taxing, even when it’s a normal part of the market cycle.
The best thing you can do is to develop a plan AHEAD of time and then remain disciplined.
Why?
Because panic-driven reactions don’t lead to smart investing decisions.
The biggest mistake investors can make is not having a plan ahead of time and/or not remaining disciplined.
Tune into this week's episode for my complete thoughts on dealing with market corrections.
If you like this episode you’ll love
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