4 ms·

> Well, first off is not even hard to spend 800k If you're buying a house, sure, but that's just the 1st year. > ..many smart people like to work. I do too,

> Well, first off is not even hard to spend 800k If you're buying a house, sure, but that's just the 1st year. > ..many smart people like to work. I do too, but life outside of work, being financially independent - that's tempting.

arcticbull 3y ago
You're not going to net anywhere close to 800K. As the article notes, they're talking 300K base + 500K equity (which is illiquid) at the 'highest end.' (In reality the highest end is likely quite a bit higher, but with a wide and thinly distributed band). - ... the 300K base is 177K after tax. - ... the 500K equity is ~250K after tax. Financial independence assuming the stock doesn't massively appreciate by the time you see liquidity is 5-10 years away. I mean this is good do not misunderstand me. There's a big difference between making 800K gross where 62.5% is illiquid and 800K net you can spend any time. [edit] This isn't much different than getting a staff+ role at a MAANG, which includes liquidity, but of course upside depends in your view of the relative stock performance in the coming years. Also, this is well above median, we're probably talking top 5-10% of talent.
- j0hnyl 3y ago
  You don't think there's a market for this so called illiquid openai stock?
  - arcticbull 3y ago
    Potentially, of course, depending on a ton of factors. Stock agreements generally forbid transfers to third parties outside of like, death and divorce. Also, they're probably RSUs at this point which these secondary market companies don't like because unlike options, they can't be exercised at the holder's discretion, or shares, which the employee owns outright, they don't vest until all conditions are met (which often means until liquidity event). If the conditions aren't met within 7 years the RSUs evaporate even if the company continues to do well. So yeah you may be able to get a no-recourse loan or a forward sale, on bad terms, for the stock/cash to exercise the options. For RSUs you're either going to get even worse terms or politely told to come back once they vest. Let me know if that's not the case though.
flashgordon 3y ago
So. Couple of things. That is 800k tc and not base. Id say 250-300k based. But let us go with this being fully liquid and ignore vesting, exit event etc. Half of that is tax - so 400k. A (crappy?) house in the bay area is 2-3M (sam I thought was pretty adamant about RTO). Property tax is 1.25% (so about 40k a year?). Currently at 5% we are looking at 150k a year on mortgage interest alone. Private schooling is around 2-4k per kid (after tax). But let us say you are public schooling. Assume you already have a car and no desire for fancy cars. Assume you hardly eat out and don't go on vacations. Assuming you have no other expenses id say yeah it is pretty easy to spend 800k!

arcticbull 3y ago

You're not going to net anywhere close to 800K. As the article notes, they're talking 300K base + 500K equity (which is illiquid) at the 'highest end.' (In reality the highest end is likely quite a bit higher, but with a wide and thinly distributed band). - ... the 300K base is 177K after tax. - ... the 500K equity is ~250K after tax. Financial independence assuming the stock doesn't massively appreciate by the time you see liquidity is 5-10 years away. I mean this is good do not misunderstand me. There's a big difference between making 800K gross where 62.5% is illiquid and 800K net you can spend any time. [edit] This isn't much different than getting a staff+ role at a MAANG, which includes liquidity, but of course upside depends in your view of the relative stock performance in the coming years. Also, this is well above median, we're probably talking top 5-10% of talent.

j0hnyl 3y ago
You don't think there's a market for this so called illiquid openai stock?
- arcticbull 3y ago
  Potentially, of course, depending on a ton of factors. Stock agreements generally forbid transfers to third parties outside of like, death and divorce. Also, they're probably RSUs at this point which these secondary market companies don't like because unlike options, they can't be exercised at the holder's discretion, or shares, which the employee owns outright, they don't vest until all conditions are met (which often means until liquidity event). If the conditions aren't met within 7 years the RSUs evaporate even if the company continues to do well. So yeah you may be able to get a no-recourse loan or a forward sale, on bad terms, for the stock/cash to exercise the options. For RSUs you're either going to get even worse terms or politely told to come back once they vest. Let me know if that's not the case though.

flashgordon 3y ago

So. Couple of things. That is 800k tc and not base. Id say 250-300k based. But let us go with this being fully liquid and ignore vesting, exit event etc. Half of that is tax - so 400k. A (crappy?) house in the bay area is 2-3M (sam I thought was pretty adamant about RTO). Property tax is 1.25% (so about 40k a year?). Currently at 5% we are looking at 150k a year on mortgage interest alone. Private schooling is around 2-4k per kid (after tax). But let us say you are public schooling. Assume you already have a car and no desire for fancy cars. Assume you hardly eat out and don't go on vacations. Assuming you have no other expenses id say yeah it is pretty easy to spend 800k!