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The "insurance" you seek is in the form of different investments that are probably more stable (e.g. bonds, or something in an entirely different market like bu

The "insurance" you seek is in the form of different investments that are probably more stable (e.g. bonds, or something in an entirely different market like buying a house). Stocks given as rewards should be treated, in my opinion, as valueless (i.e. make sure you have enough for rent and food based on what is actually paid, not some theoretical future that depends on stocks). Treat it like cash that you may or may not find on the street: "great, IF you get something, otherwise no worse off".

vixotic 9y ago
I respectfully disagree. Yes, your 401k's bonds and international diversification could hold its worth. But not for your company stock especially if it is publicly traded (which is what I am talking about). It's not unheard of to get 50K+ and 100K+ in RSUs. They are not valueless. Once you have vested it, it is whatever the market says it is. Nowadays engineers (with masters degrees) start at $120K at many places. You put 10% of your pay in ESPP and in four years you have ~$50K in your company stock. Again not valueless. Now you are looking at $100K+ in a single stock (your company) and it gets more riskier if you have had a stint at 2-3 companies in the last 10 year accumulating stocks at various places.
- makecheck 9y ago
  Stock like that MAY not be valueless but it certainly CAN be. The company may fire you when a project is done, or sooner (all your RSUs: $0). The company may go out of business, and the “fine print” will certainly say that the big-boy investors receive a piece of the pie first before owners of restricted stock (all your RSUs: $0). Some of your RSUs may vest, turning into real stock, yet if you took the job assuming they would “probably” be worth $X, they could be worth anything by the time you vest (including much, much, much lower than you thought). Also, no one requires you to invest in an ESPP. Clearly stock in a single company can have tremendous returns but it is foolish to treat that like anything but pure gambling from a run-your-life point of view.

vixotic 9y ago

I respectfully disagree. Yes, your 401k's bonds and international diversification could hold its worth. But not for your company stock especially if it is publicly traded (which is what I am talking about). It's not unheard of to get 50K+ and 100K+ in RSUs. They are not valueless. Once you have vested it, it is whatever the market says it is. Nowadays engineers (with masters degrees) start at $120K at many places. You put 10% of your pay in ESPP and in four years you have ~$50K in your company stock. Again not valueless. Now you are looking at $100K+ in a single stock (your company) and it gets more riskier if you have had a stint at 2-3 companies in the last 10 year accumulating stocks at various places.

makecheck 9y ago
Stock like that MAY not be valueless but it certainly CAN be. The company may fire you when a project is done, or sooner (all your RSUs: $0). The company may go out of business, and the “fine print” will certainly say that the big-boy investors receive a piece of the pie first before owners of restricted stock (all your RSUs: $0). Some of your RSUs may vest, turning into real stock, yet if you took the job assuming they would “probably” be worth $X, they could be worth anything by the time you vest (including much, much, much lower than you thought). Also, no one requires you to invest in an ESPP. Clearly stock in a single company can have tremendous returns but it is foolish to treat that like anything but pure gambling from a run-your-life point of view.