And probably the biggest misunderstanding about Netflix is that it didn't offer stocks. Netflix was really generous on stock options. When I was there, it gave

And probably the biggest misunderstanding about Netflix is that it didn't offer stocks. Netflix was really generous on stock options. When I was there, it gave everyone stock options worth 5% of the person's salary for free. Then you can forfeit your salary for options, but here is the kick: Netflix gave you 5 times of discount. 5 times! If you forfeit 100 dollars for options and the strike price is $10, then you will get 50 options instead of 10. The general formula for profit is 4X - 1, where X is the percentage of increase from strike price. If the stock price is 25% higher than your strike price, you'll make even. If it is 50% higher, then you will double your forfeited salary. On top of that, you vest your stock options on a monthly basis, and your options expire in 10 years! You're pretty much guaranteed to make money as long as the stock has certain volatility, and Netflix stock has been one of the most volatile stock in the past 10 years.