The Equity Compensation Guidebook

Today we will be talking about another important part of equity compensation, and that is concentration risk. Perhaps you’re wondering what exactly that is and how it happens so I’ve got a few examples to clarify it for you. I’m going to share some misconceptions about holding large amounts of a single stock, especially if it’s stock in the company you work for. We will also touch on some ideas to help mitigate concentration risk. Be sure to tune it so you don’t miss a thing! 

• Concentration risk… how it happens? [1:17]
• Learn from market history [3:01]
• Misconceptions about holding a large percentage of your portfolio in 1 stock [5:24]
• Ideas to mitigate concentration risk [8:27]
• Differences between stop orders and stop-limit orders [11:08]
• This week’s FLASHBACK [12:50] 

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On this week's episode, we're going to talk about one of the most essential components of equity compensation. Actually, it is one of the most important parts of any successful investing strategy... taxes. Who doesn't love talking about taxes? I have a mantra when it comes to investments and taxes— it's not what you make, it's what you keep— this is critical because if you lose a good portion of your investment returns to taxes every year you lose some of the effectiveness of compounding over time. None of us has complete control over our taxes. However, there are some things we can control, and today I'm going to cover some of the basics.

 You will want to hear this episode if you are interested in...

• Common offerings you may have available to you [0:22]
• Compensation income vs capital gains [4:52]
• Differences in restricted stock [6:56]
• 83b election [10:51]
• Taxes on employee stock purchase plans [12:07]
• This week’s FLASHBACK [15:31] 

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It seems far fetched to think that you can have too much in savings. But, can have too much in tax-deferred 401k’s? There is a lot of false information floating around out there, not just “fake news” but info that is just flat out wrong or misleading. Join me in this episode as we weed out the myths and get down to the bare bones of the matter.  

• The first time I heard someone talk about too much in tax-deferred accounts [0:41]
• Employer matching [3:10]
• Are there long term benefits beyond the employer matching program? [6:41]
• The big difference when looking at 401k vs Roth 401k [8:53]
• The magic tax rate number to consider [10:58]
• This week’s FLASHBACK [13:18]

• Nick Maggiulli - Of Dollars And Data

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Today's topic is something I'm seeing more frequently with clients using charitable giving with some of their equity compensation positions. This is a great way to hit your charitable goals. There are a few tips to doing it properly so today I'm going to cover three keys to charitable giving with equity compensation. 

You might have noticed a little change— well maybe it’s a big change— I’ve decided to change the name of the show. I’ve also dropped the sales tip section but you will learn more about why when you listen to the episode. Going forward the bulk of the episodes will focus on equity compensation and how to use it effectively to achieve your financial goals.

• Why the podcast has a new name [0:22]
• Many forms of charitable giving [2:00]
• First tip: Positions need to be fully vested [3:17]
• Second tip: DO NOT sell the stock before donating it [4:52]
• Third tip: Should you donate one lump sum or stretch it over time? [9:18]
• This week’s FLASHBACK[11:29] 

• Three Days live by Janes Addiction fast forward to the drum solo at 6:00 mins

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I see articles at least once a month with advice on how to answer the question of how much you need to save for retirement. These articles all have common themes to them but there is no consistent answer. It's an individual situation. Many articles say things like having 10 times your income is the answer. This might be applicable to the 64 year old who is getting ready to retire but what about a 30 year old who has her best income earning years ahead? Tune in to hear my take on this age old question.

• The loaded question the financial media loves to ask [0:21]
• Why 10x your income isn’t right for everyone [1:27] 
• Know what you spend! [3:18]
• Projecting what retirement will look like [4:18]
• Knowing your inflow numbers [5:07]
• Getting a back of the napkin rough estimate [6:00]
• The sales tip section: Accomplishments [7:29]
• This week’s FLASHBACK [8:33] 

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HSA vs FSA, Ep 11  

I meet with clients during their open enrollment periods so that we can discuss their benefits packages. Medical expense is something that comes up often so we discuss Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs). Why these two? Well, they get used interchangeably, but they are two completely different things. In this episode, I'm going to bullet point the highlights of these two types of accounts that are both designed to help you cover out-of-pocket medical expenses so be sure to listen in. 

• The Health Savings Account (HSA) highlights [0:58]
• The Flexible Spending Account (FSA) highlights [2:07]
• Using an HSA in retirement [4:09]
• The sales tip section: Celebrating the small wins [5:52]
• This week’s FLASHBACK [6:39] 

This week I’ll play off of last week’s episode on college selection by going back a little further. Specifically, back to when your child was born. I was recently talking to someone about the power of compound interest and how early our kids can start saving for retirement. It sounds weird to talk about 16-year-olds saving for retirement, but we know the power of compound interest. What if there was a way to start saving at birth? Listen in as I go over the concept of the Baby IRA.  

• The concept of the Baby IRA [1:14]
• The bigger issue of taxes [2:46]
• What if the Baby IRA really did exist? [4:00]
• The sales tip section: Vision Boards [5:53]
• This week’s GenX FLASHBACK [11:23]

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Today we are going a bit off-topic. A big part of the role I play with clients isn't just talking about improving their financial picture but helping them achieve a better work-life balance as well. So what off-topic topic are we talking about? The college selection process. I’ve been through it once already and am going through it again this year. Both experiences are turning out to be different but I feel there are a few things I can share that may help any of you who are in the same boat. Tune in to the episode for details on our experience.  

• Admissions counselors and how they can make a difference [2:07]
• The blend [3:04] 
• Your mail vs your kid’s email [4:02]
• Why it’s a buyers market for shopping students [4:24]
• Having your child talk to someone in the profession they may pursue [5:57]
• The sales tip section: Sandler success triangle [9:31]
• This week’s FLASHBACK [11:23] 

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In continuing our Equity Compensation series, today we are talking about ESPPs. Wondering what ESPP stands for? Well, it’s an Employee Stock Purchase Plan and the most common form of equity compensation that we will cover. It’s available to almost any full-time employee of a publicly-traded company; and for this reason, it’s my favorite kind of compensation. 

So what is an ESPP exactly? It’s a great vehicle to allow employees to purchase employer stock, preferably at a discount. The advantage is you get to buy the stock from the company you work for at a price that is lower than it would be if purchased on your own. When you participate in an ESPP, your investments are held in a regular old investment account. Check out the episode to find out why and maybe some other useful tips too!  

• Who can get an employee stock purchase plan? [0:21]
• Advantage of an ESPP [1:25]
• Key differences between an ISO & an ESPP [2:32]
• How ESPPs operate [3:56]
• The ins and outs of offering periods [5:02]
• The sales tip section: How NOT to get referrals! [7:58]
• This week’s FLASHBACK [10:17]

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Sometimes you just don’t know what you don’t know and that was the case early in my career. I learned the hard way that financial power of attorney— commonly referred to as a POA— is an important document and one you need to have. It’s simple and inexpensive to obtain but can have painful repercussions if you need it and don’t have it. Listen to the episode to hear why.

• Why I think this document is important [0:21]
• A close call and a good reason to have a POA [2:03]
• What is a financial POA? [3:35]
• My recommendation on who to see to get your financial POA [3:57]
• The sales tip section: appointment debriefing [4:44]
• This week’s FLASHBACK [5:45]

• Nine Inch Nails

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