Exercising Startup Stock Options and Tax Implications (2018)

Stock Options at an early startup sucks, until it doesn’t.  Basically until the company goes public (IPO), sells to another company, or grows big enough to know it’s not going to fail, these stock options are a costly gamble.  Purchasing my stocks and paying the taxes cost me about $33k!  Since these options were part of my compensation package, it’s really hard to leave them on the table though.  I’ve got too much FOMO to not buy them!  Here’s the story of my 2nd options exercise and how it affected my taxes.

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Retirement Guide: Investing Basics

I like to simplify things that are really complex.  Investing can be as complicated as you want it to be.  You and I probably don’t have time to dedicate ourselves to understanding every investment opportunity, but I have 3 rules for retirement investing.

  1. Put your money where it averages the greatest returns long term (10+ years)
  2. Treat retirement accounts as insurance for not having money when you’re old
  3. Passive indexing and rebalance periodically

Sounds simple enough, but it is somewhat complicated by taxes, deductions, interest rates, inflation, and sales people selling terrible financial products (whole life insurance). >_<

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How Are Index Funds Calculated?

Index prices are the weighted average by market capitalization of their component assets.  In the case of the S&P 500, the largest 500 companies by market capitalization listed on the NYSE or Nasdaq have their market caps added up and then divided by some number so we end up with a nice number humans can visualize.  The Index funds then tracks this index giving us an investment opportunity to buy all stocks in the index at once.

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