I used to get paid in stock. I had a plan on file to auto-sell it every month, and then I reinvested the proceeds so I had less financial exposure to my employer. The exact scenario is if the company stops doing well, then your job is going to go away at the same time the stock becomes worth $0.

The other side of the coin is that you pay significantly less taxes if you hold on to the vested shares. They increase in value after vesting, and you structure your sales such that you take a long term capital gain. A lot of my coworkers did that, and have a lot more money than me. But it's a gamble, and you should always weigh your gambles by how badly you can afford to do.

(I hate getting paid in stock, but it's advantageous to the employer, so it will always be a thing. With auto-sale, it's a very similar risk to being paid in cash, except that you have a lot of annoying paperwork to do every year. But you just pay someone to do that.

Oh, and if you're a new FAANG hire, please just find a professional to do your taxes. I did it myself and fucked it up a number of times. The IRS does not like fuckups, and extremely competent professionals will do everything for you for a small amount of money.)

> The other side of the coin is that you pay significantly less taxes if you hold on to the vested shares. They increase in value after vesting, and you structure your sales such that you take a long term capital gain. A lot of my coworkers did that, and have a lot more money than me. But it's a gamble, and you should always weigh your gambles by how badly you can afford to do.

This depends on how the stock plan is structured.

For example, with RSUs, you pay income tax on the value of the RSUs whether you sell them or not and some companies do that tax withholding for you. The value of the RSUs on the vesting date becomes your basis. When you sell the shares is when capital gains taxes come in -- on gains above the amount they vested at.

So, there is not a tax penalty to selling RSUs the day they vest and reinvesting them -- you have to pay the income tax whether you sell them or not. If you decide not to sell them, then you do benefit from holding them long enough to make the capital gains long term gains -- but with the risk of having a lot of your eggs in one basket.

With options it can be very different based on the type of options.

Seems unwise. You can always be fired or otherwise lose your job.

cant that be said about buying a home anywhere?

Yes, a difference is price. My 4 bedroom house in flyover country was a bit over $200k, and we had the cash from having worked for about 6 years after grad school for a flyover salary while continuing to live like grad students.

We went through a variety of simplistic formulas for "what you can afford" and entered half of our incomes to get an idea of what we actually wanted to spend.

Right - it would be unwise to take out a mortgage if you miss one month of income you can't repay.

Holy shit, seems like bad personal finance. I never consider stock in my budget, how did this come to be?

If you have enough emergency savings then it can make sense, particularly when the majority of your income comes from stock. I'm talking about enough savings to live for a year or two even if you lose your job and your company's stock goes to zero.

At really high incomes, especially with stock vesting only a few times a year rather than every month, you can operate more like a business than a month-to-month budgeter. Keep enough cash on hand to smooth out the spikes in income. If your income is high enough to do this, you won't have a problem building the initial cushion.

What's irresponsible is living off your stock when you don't have that emergency fund.

People really want a house, and the banks allow it.

Plenty of spots in the East Bay that are way below your quoted hypotheticals.

Yes, you trade commute for $$, with every 10mins being worth about $7-10k (I think), and every "point" on the school rating being another $10-15k. The heat maps tend to be centered around Google, Apple and Facebook.

I live downtown San Jose, 90min commute/day, and paid $500-$600k less, but the school isn't anywhere near as good.

Parents have different perceptions of value and choose differently.

East Bay was never an option for me - can't commute by bike from there to Mountain View/Sunnyvale.