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

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