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I used to get paid in stock. I had a plan on file to auto-sell it every month, and then I reinvested the proceeds so I had less financial exposure to my employ

I used to get paid in stock. I had a plan on file to auto-sell it every month, and then I reinvested the proceeds so I had less financial exposure to my employer. The exact scenario is if the company stops doing well, then your job is going to go away at the same time the stock becomes worth $0. The other side of the coin is that you pay significantly less taxes if you hold on to the vested shares. They increase in value after vesting, and you structure your sales such that you take a long term capital gain. A lot of my coworkers did that, and have a lot more money than me. But it's a gamble, and you should always weigh your gambles by how badly you can afford to do. (I hate getting paid in stock, but it's advantageous to the employer, so it will always be a thing. With auto-sale, it's a very similar risk to being paid in cash, except that you have a lot of annoying paperwork to do every year. But you just pay someone to do that. Oh, and if you're a new FAANG hire, please just find a professional to do your taxes. I did it myself and fucked it up a number of times. The IRS does not like fuckups, and extremely competent professionals will do everything for you for a small amount of money.)

twblalock 4y ago
> The other side of the coin is that you pay significantly less taxes if you hold on to the vested shares. They increase in value after vesting, and you structure your sales such that you take a long term capital gain. A lot of my coworkers did that, and have a lot more money than me. But it's a gamble, and you should always weigh your gambles by how badly you can afford to do. This depends on how the stock plan is structured. For example, with RSUs, you pay income tax on the value of the RSUs whether you sell them or not and some companies do that tax withholding for you. The value of the RSUs on the vesting date becomes your basis. When you sell the shares is when capital gains taxes come in -- on gains above the amount they vested at. So, there is not a tax penalty to selling RSUs the day they vest and reinvesting them -- you have to pay the income tax whether you sell them or not. If you decide not to sell them, then you do benefit from holding them long enough to make the capital gains long term gains -- but with the risk of having a lot of your eggs in one basket. With options it can be very different based on the type of options.

twblalock 4y ago

> The other side of the coin is that you pay significantly less taxes if you hold on to the vested shares. They increase in value after vesting, and you structure your sales such that you take a long term capital gain. A lot of my coworkers did that, and have a lot more money than me. But it's a gamble, and you should always weigh your gambles by how badly you can afford to do. This depends on how the stock plan is structured. For example, with RSUs, you pay income tax on the value of the RSUs whether you sell them or not and some companies do that tax withholding for you. The value of the RSUs on the vesting date becomes your basis. When you sell the shares is when capital gains taxes come in -- on gains above the amount they vested at. So, there is not a tax penalty to selling RSUs the day they vest and reinvesting them -- you have to pay the income tax whether you sell them or not. If you decide not to sell them, then you do benefit from holding them long enough to make the capital gains long term gains -- but with the risk of having a lot of your eggs in one basket. With options it can be very different based on the type of options.