junior dev here. How do u guys deal with ur company stock? Should I sell them and invest them in somewhere else? or keep them as long term investment
Sell them and put that into wealthfront or betterment or vanguard.
Typically will the interest rate for roboinvestor higher than FANG stocks?
Obviously the interest rate might not be as high since google could do really well this year. But it could go down next year by a bit. If you invest in index funds they are diversified into international market & US market. I got 8% last year and my risk score was 9. I would prefer consistency over putting all my eggs in one basket. Tesla stocks are so volatile that I could be making 25-30% if I wait for Elon’s tweet 😋. But it’s too risky, hence I have put my savings into robo advisor.
Here is a way to think of it: before your stock vests it is a promise, moment it vests it is compensation, the next day investment (or gamble) on your company. Say you got $100 in stock, if you do not sell it ASAP it is an equivalent of buying $100 of shares in your company. Investing in your company is not necessarily bad. Investment means you have researched fundamentals, project a real upside, and have thought of what happens when it goes sideways. 1. When was the last time you dove into your company’s SEC filings? 2. What do you project to be a fair price for the stock based on your knowledge of economy and what you learned in 1? 3. If your prediction is catastrophically wrong, what happens to your life? (This is especially tricky because factors entirely outside your control like unethical C suite can cost you to lose all the equity and your job on the same day). If you cannot come up with reasonable answers, you are gambling and the house is likely to win in the long run. For most of us, we should sell ASAP
Well at least for stable stocks i keep them over an year to avoid short term gains tax
If you still immediately (assuming it's rsu) then there's no gains, short or long term. But yes, this is exactly what I do too, want to get those sweet AMZN returns, but don't want to risk too much of my net worth,so a year of stocks growing is a decent balance.
The general thought is only hold your vest if you would normally take your cash bonus and invest it in your company.
Always sell and diversify. Let me explain. Let us say your company is rocking it. You will keep getting a good return on your unvested stocks in the future. Let us say shit happens and your company stock tanks and your are laid off. You will be faced with a double whammy....all previous earnings will be gone and future earnings gone. Which end of the spectrum would you prefer?
It all a gamble :) If the company is doing good, wait a bit, like a year, if unsure sell immediately and reinvest.
I sell half and reinvest them in other companies and index funds. Half I let grow. Overall I try to keep around 30% of net worth in Google stocks and rest diversified. It's a pretty stable stock
Is it a short term capital gain if you sell immediately
A short term capital gain of (close to) 0.
I sell immediately and generally even out to zero with tiny gains and losses. Like really tiny...
I thought this was a question from leetcode
I, ii or iii :p
Sell immediately and diversify into high yield index funds
VTSAX