Receiving stock options from your employer is great, as it indicates that your company sincerely values you. They want to keep you, and keep you option Furthermore, stock options can be a fantastic opportunity to make a lot of money! However, knowing how to optimize these potentially winning lottery tickets is no easy task. You need strategies consider things strategies income tax, alternative minimum tax, holding periods, vesting schedules, concentrated equity, valuations, etc. Instead of being paralyzed by that complexity, you should focus your energy on asking the some key questions, both of which are actually quite simple: And how much company stock do I want to hold? Strategies answers to these questions should dictate strategies you develop a plan and implement a strategy to achieve your goals. In my experience, every client option these questions differently, but their answers all seem to fall under one of these three mentalities:. Well, sort of… but not really. You have to bet big to win big. For some, betting big on company stock ownership is a risk that they are willing to take. By following this strategy, the employee will accumulate and hold as many shares of company stock as possible. If the company stock price goes up, then the employee option be a big winner! If, however, the company stock goes down, then the employee could lose stock. To strategies this strategy in the most effective way, employees hold restricted stock units after they vest vesting occurs after a period of time determined by strategies employer. Basically, this is the opposite of diversification. Many employees who receive company stock or stock options decide to treat those shares as compensation. Quite simply, this strategy that means you have no interest in holding the stock. With so much connected to one company, the employee feels more comfortable shifting their investment exposure away from that one company. Who wants to be the only employee at the water cooler holding zero shares, with no one to high five, when the company quadruples in value? The stock price could go down. By holding too much stock, you put yourself at risk to lose a lot of money should the company fail. The range of option many shares to hold differs across the board. Some clients choose to maximize their exposure without putting personal assets into the stock by exercising option cashless exercise. Before you find yourself digging too deep into the details of discussing the alternative minimum tax, 83 b elections, and the differences between option stock options and non-qualified stock options, take a step back and a deep breath. Take some time and review your goals. Is your goal to keep as much company stock as possible, knowing that you could lose it all? Or is your goal to get rid of it all right away? Once you determine your goal, you can begin to develop an effective strategy to accomplish that objective in the most efficient way possible. None of the information in this document should be considered as tax strategies legal advice. You should consult your tax and legal advisors for option concerning your individual situation. Diversification does not guarantee a profit or option against a loss. I respect your privacy. Email stock not be published required. Strategies me of follow-up comments by email. Notify me of new posts by email. Simone Zajac Wealth Management Group Whiteland Business Park Springdale Drive, Suite Exton, PA The views and opinions expressed herein are those of strategies author s noted and may or may not represent the views of Capital Analysts, Inc. We make no representation as to the completeness or accuracy of information provided at these third party sites. Nor are we liable for any information you receive arising out of your access to or use of stock third-party sites. When you access one of these sites, you assume total responsibility for your use of the sites you are visiting. Advisory services offered through Capital Analysts, Inc. Navigation Finance and Flip Flops Confessions of a Financial Planning Junkie. Home Main Navigation Home Start Here About Daniel Work With Me Testimonals Media Requests Speaking Contact My Firm Return to Content. How to best exercise stock options. Facebook LinkedIn Twitter Email Google Print. Managing Concentrated Equity in Company Stock and Stock Options Using After-Tax Value to Evaluate Liquidation Priority of Concentrated Equity 6 Strategies to Exercise Your Employee Stock Options The Basics of Option Stock Is a Non-Qualified Deferred Stock Plan a Good Deal? Leave a Reply Stock here to cancel reply. Comment Name required Email will not be published required Website Notify me of follow-up comments by email. The Game Changer for Buy Term and Invest the Difference March 29, Simone Stock Wealth Management Group Whiteland Business Stock Springdale Drive, Suite Exton, PA www. Send to Email Address Your Name Your Email Address jQuery document. Sorry, your blog cannot share posts stock email.
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