Finance Friday: Stock-Based Compensation Explained and Tax Traps to Avoid
For the entry-level worker, employee stock options may seem completely foreign. But for most tech workers, this is commonplace and can be highly lucrative if understood correctly. In short, employee stock options, employee stock purchase plans (ESPPs), and restricted stock units (RSUs) all give an employee far more upside (and downside) than a traditional salary. As a result, you’re trading steady take-home pay for the potential to own company stock sharesthat could be valued at even more when you decide to sell. But is this gamble ever worth it?
JT, long-time tech worker, has spent most of his life tinkering away as an engineer at some of the biggest companies in computing. He’s no stranger to the world of stock-based compensation and knows it can be worth the lack of salary if done correctly. In this episode, JT gives a complete overview of what stock-based compensation means, the three different types of stock you’ll be offered, and how this type of payout compares to a regular salary.
He also goes in-depth on timing the sale of your stocks, the tax traps that could cost you thousands, and how to create a plan that lets you profit when getting paid in shares. If you ever foresee yourself working at a startup, tech company, or publicly-traded conglomerate, you MUST know what these types of compensation mean. Or, you’ll risk losing the real reward of a stock-based salary.
In This Episode We Cover
Stock-based compensation explained and why companies would rather pay shares than a salary
ESPPs, RSUs, stock options, and the different ways you could get paid at a tech company
When to sell your company shares and tax tips that can stop you from owning a big IRS bill
Who is eligible to be paid in stock, and whether or not entry-level workers can get access
The stock-payout schedule and when employees can expect to receive full compensation for years of company loyalty
JT’s stock-selling strategy and whether he chooses to sell or hold on to company stock
And So Much More!
Links from the Show
BiggerPockets Money Facebook Group
BiggerPockets Forums
Finance Review Guest Onboarding
Scott's Instagram
Mindy's Twitter
Listen to All Your Favorite BiggerPockets Podcasts in One Place
Apply to Be a Guest on The Money Show
Podcast Talent Search!
Subscribe to The “On The Market” YouTube Channel
Listen to The “On The Market” Podcast: Spotify, Apple Podcasts, BiggerPockets
Check Out Mindy’s 2022 Live Spending Tracker and Budget
Click here to check the full show notes: https://www.biggerpockets.com/blog/money-379
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JT, long-time tech worker, has spent most of his life tinkering away as an engineer at some of the biggest companies in computing. He’s no stranger to the world of stock-based compensation and knows it can be worth the lack of salary if done correctly. In this episode, JT gives a complete overview of what stock-based compensation means, the three different types of stock you’ll be offered, and how this type of payout compares to a regular salary.
He also goes in-depth on timing the sale of your stocks, the tax traps that could cost you thousands, and how to create a plan that lets you profit when getting paid in shares. If you ever foresee yourself working at a startup, tech company, or publicly-traded conglomerate, you MUST know what these types of compensation mean. Or, you’ll risk losing the real reward of a stock-based salary.
In This Episode We Cover
Stock-based compensation explained and why companies would rather pay shares than a salary
ESPPs, RSUs, stock options, and the different ways you could get paid at a tech company
When to sell your company shares and tax tips that can stop you from owning a big IRS bill
Who is eligible to be paid in stock, and whether or not entry-level workers can get access
The stock-payout schedule and when employees can expect to receive full compensation for years of company loyalty
JT’s stock-selling strategy and whether he chooses to sell or hold on to company stock
And So Much More!
Links from the Show
BiggerPockets Money Facebook Group
BiggerPockets Forums
Finance Review Guest Onboarding
Scott's Instagram
Mindy's Twitter
Listen to All Your Favorite BiggerPockets Podcasts in One Place
Apply to Be a Guest on The Money Show
Podcast Talent Search!
Subscribe to The “On The Market” YouTube Channel
Listen to The “On The Market” Podcast: Spotify, Apple Podcasts, BiggerPockets
Check Out Mindy’s 2022 Live Spending Tracker and Budget
Click here to check the full show notes: https://www.biggerpockets.com/blog/money-379
Interested in learning more about today's sponsors or becoming a BiggerPockets partner yourself? Check out our sponsor page!
Learn more about your ad choices. Visit megaphone.fm/adchoices
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