Too Much Company Stock

Host John Chapman of the John Chapman Show talks about his three practical ideas around having company stock, whether it is in the form of stock options or RSUs, and how they affect your net worth. Learn how not to let having the majority of your future funds tied up in the vitality that can occur with company stock. 

Episode Highlights:
John Chapman opens up about the topic of having too much company stock. 
John creates a scenario about a married couple that both work with two young kids who bought a house in the suburbs. 
What are the three practical ideas regarding company stock?  
What does John Chapman mean by, ‘you are only as good as your salary?’
What does the high watermark theory refer to? 
Always assume that you only have 50% of the company stock that you have. 
Overlap an appropriate insurance and estate plan to your company stock situation. 
Why do you need to understand vesting timeframes? 
What is your flexibility with your stock money? 
Does your emergency fund have 3-6 months of cash-on-hand? 
What types of upcoming expenses do you have coming? 
What is your medium to long-term expenses? 
Don’t invest more than 20% of your net worth in one company. 

3 Key Points:
Keep your mindset in check. 
Combine an appropriate insurance and estate plan. 
Sit down with a financial planner to map out the vesting timeframes and decide what amount of stock you are going to sell and what amount you are going to hold. 

Tweetable Quotes:
“Personal financial is 90% personal and 10% finance.” – John Chapman
“If your day-to-day lifestyle creep is going to get above and beyond your salary and it is going to start eating into your equity compensation, you are potentially going to run into a situation where you are mortgaging the future.” – John Chapman 
“If you want to live like no one else, live like no one else today. Meaning, stay tight, keep within your means. You are only as good as your salary. So that, you can live like no one else tomorrow.” – John Chapman

Resources Mentioned:
Linkedin: John Chapman

Host John Chapman of the John Chapman Show talks about his three practical ideas around having company stock, whether it is in the form of stock options or RSUs, and how they affect your net worth. Learn how not to let having the majority of your future funds tied up in the vitality that can occur with company stock. 

Episode Highlights:

John Chapman opens up about the topic of having too much company stock. 
John creates a scenario about a married couple that both work with two young kids who bought a house in the suburbs. 
What are the three practical ideas regarding company stock?  
What does John Chapman mean by, ‘you are only as good as your salary?’
What does the high watermark theory refer to? 
Always assume that you only have 50% of the company stock that you have. 
Overlap an appropriate insurance and estate plan to your company stock situation. 
Why do you need to understand vesting timeframes? 
What is your flexibility with your stock money? 
Does your emergency fund have 3-6 months of cash-on-hand? 
What types of upcoming expenses do you have coming? 
What is your medium to long-term expenses? 
Don’t invest more than 20% of your net worth in one company. 

3 Key Points:

Keep your mindset in check. 
Combine an appropriate insurance and estate plan. 
Sit down with a financial planner to map out the vesting timeframes and decide what amount of stock you are going to sell and what amount you are going to hold. 

Tweetable Quotes:

“Personal financial is 90% personal and 10% finance.” – John Chapman
“If your day-to-day lifestyle creep is going to get above and beyond your salary and it is going to start eating into your equity compensation, you are potentially going to run into a situation where you are mortgaging the future.” – John Chapman 
“If you want to live like no one else, live like no one else today. Meaning, stay tight, keep within your means. You are only as good as your salary. So that, you can live like no one else tomorrow.” – John Chapman

Resources Mentioned:

Linkedin: John Chapman