Hi everyone! I’m a young professional right out of college getting into investing and personal finance management. Trying to better understand and educate myself on personal finance and investment strategies. Can someone recommend some recourses (books, podcasts, experts to follow, etc.) where it’s clearly explained for beginners? Trying to make sense of 401Ks, Roth IRAs, emergency funds etc.
Like I’m looking for someone like Dave Ramsey but for investment and money management advice.
You have to exercise options and they are only worth something if the current stock price is higher than the strike price (in the money). Also, options may be subject to expiration dates, and may require cash to exercise at the option strike price (unless cashless exercise is available - see comment below).
Stock grants (RSUs) are straight up stock that are worth the current stock price and don’t require cash to exercise and don’t expire since they are actual stock units.
Bowl Leader
Options packages are also usually larger because of this
Pro
Like all things in engineering, there are trade offs to both. RSUs don’t require cash to exercise but incur an immediate tax liability that you have to pay either with cash or with shares. Options require cash to exercise but depending on how and when you exercise, may present huge tax advantages.
Pro
You don’t always have a choice. Last company I was at that granted RSUs (MSFT) withheld 25% of your shares. I think you make up the difference in marginal tax rate with cash when you file taxes.
IMO, where the company is at is the factor. For an established successful company making good money I say RSUs. For a company that is aiming to be a big successful company options.
I will say this is generally true.
If you're newer to the game, RSUs are safer, and they're better if you've got less money to mess around with in the first place.
I would not want to steer you in any direction without more info on your situation. https://smartasset.com/investing/stock-options-vs-rsu