Your Guide to Stock Options: ESPPs, RSUs, and ISOs (That Won't Make You Take a Nap)

The Money with Katie Show

Money with Katie

Self-improvement, Education, Business, Investing, How To

4.8 • 1.3K Ratings

🗓️ 1 February 2023

⏱️ 32 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Whether you’ve got access to an ESPP (Employee Stock Purchase Program) at work and aren’t sure if it’s worth your time, or your new offer includes compensation via RSUs and ISOs, this week is dedicated to you. Strap in for a ride through Jargonarnia. This week, I welcomed James Conole and Scott Frank—hosts of Real Personal Finance and holders of the prestigious CFP and CFA designations—to the show to help me break down this complicated world. They had some excellent tips that you won’t want to miss. For example, pretend your RSUs are cash—would you use a cash bonus to buy company stock? If not, sell ’em. Let's get into it. Learn more about our sponsor, TaxAct: https://www.taxact.com/moneywithkatie Transcripts can be found at podcast.moneywithkatie.com. — Mentioned in the Episode Human Capital Study on Employee Stock Purchase Plans: https://humancapital.aon.com/insights/articles/2020/how-common-are-employee-stock-purchase-plans-it-varies-widely-by-demographics The Risks of Employee Stock Purchase Programs: https://moneywithkatie.com/blog/the-risks-of-employee-stock-purchase-programs Morgan Stanley Guide to ESPPs: https://www.morganstanley.com/atwork/themes/equity-compensation/how-does-espp-work-your-guide Pros and Cons to RSUs: https://www.investopedia.com/terms/r/restricted-stock-unit.asp RSUs: The Basics: https://www.schwab.com/public/eac/resources/articles/rsu_basics.html My Company Stock Options are Worthless: https://www.washingtonpost.com/business/2022/08/04/company-stock-options/ These Startup Workers Thought Their Company Stock Would Make Them Rich. Instead They Got Worthless Shares and Massive Tax Bills: https://slate.com/business/2015/12/good-technology-workers-thought-their-stock-would-make-them-rich-nope.html Amazon Lost Half its Value this Year As Tech Stocks Got Crushed and Recession Fears Grew: https://www.cnbc.com/2022/12/29/amazon-shed-half-its-value-in-2022-as-tech-stocks-got-crushed.html Incentive Stock Options (ISOs): Everything to Consider: https://www.nerdwallet.com/article/investing/isos What is the Alternative Minimum Tax (AMT)?: https://taxfoundation.org/tax-basics/alternative-minimum-tax-amt/ — Follow Along at Money with Katie: https://moneywithkatie.com/ Watch on YouTube: https://www.youtube.com/@MoneywithKatie Follow Money with Katie! - Instagram: https://www.instagram.com/moneywithkatie/ - Twitter: https://twitter.com/moneywithkatie Subscribe to The Money with Katie Newsletter - Sign up for free today: https://www.morningbrew.com/money-with-katie/subscribe/2 Follow the Brew! - Instagram: https://www.instagram.com/morningbrew/ - Twitter: https://twitter.com/MorningBrew - TikTok: https://www.tiktok.com/@morningbrew Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

Click on a timestamp to play from that location

0:00.0	ESPPs, RSUs, ISOs, WTF, whether you have no clue what any of these acronyms are or
0:13.9	you've got access to one or more of them and you have no idea what to do.
0:18.0	This episode will be your primer on all things stock options.
0:33.2	Welcome back to the money with Katie Show Rich Girls and, boys, I'm your host,
0:37.6	Katie Gatti Tossan. Now, if you're listening to this episode, you probably fall into one of three
0:43.3	buckets. Number one, I don't know what the heck these acronyms mean, but I'm here because I'm
0:47.6	curious and a little bit frightened. Number two, I want to know how to get access to these things
0:52.6	because I know they can be valuable. Number three, I have access to them, but I really have no
0:58.2	idea what to do with them. Lucky for you, we are going to talk about most of this today.
1:08.0	And if you are listening to this because you have successfully big brain to company and to
1:12.8	paying you in a way in addition to your salary, with potentially tremendous upside potential,
1:18.4	well done, Rich human, well done. You probably work in tech, but not necessarily. And you're maybe
1:23.9	befuddling this hell about what these acronyms and all their related jargon mean. So we're going
1:29.0	to explore these three overly complex compensation methods, no doubt the brain children of some Wall
1:34.8	Street hotshot. So you are able to make the best choices possible about your ESPP's RSUs or ISOs.
1:43.1	I'm also going to get some help today from two CFPs who host the real personal finance podcast
1:48.9	Scott Frank and James Canole. So they'll be popping in intermittently to offer the hashtag professional
1:54.5	opinion in the midst of my expletive-laced explanations. Just kidding, there won't be any
2:00.3	expletives just jokes today. A quick word of caution. RSUs sound a whole lot like RSAs or restricted
2:08.8	stock awards, but those are actually different LOL and we won't be covering them today because
2:14.4	my brain only has so much juice. I'm sorry, okay. We'll be right back after a message from the
2:20.8	sponsors of today's episode. All right, let's talk about ESPP's Sam jumped off the table, so I'm
	...

Please login to see the full transcript.

Previous episode | Next episode

Disclaimer: The podcast and artwork embedded on this page are from Money with Katie, and are the property of its owner and not affiliated with or endorsed by Tapesearch.

Generated transcripts are the property of Money with Katie and are distributed freely under the Fair Use doctrine. Transcripts generated by Tapesearch are not guaranteed to be accurate.