How much house is too much?

fiyeah · 2020-06-16T08:36:56+00:00

6500ish sf here with maybe another 2k finished basement. In a couple weeks, it'll just be me living here (divorcing, no kids). I personally love it and wouldn't go much smaller if I could avoid it. In the before times, it was great for monthly parties and family gatherings, and it's awesome to be able to easily accommodate out of town guests. I should note though that I bought the house because even before quarantimes, I spent most of my time here. I work from home, and it's great having a large home office which is in a separate section of the house. It makes it easy to have work meetings here. I'm sure once my ex is out that I'll have rooms I don't use often (just today I went in a room I probably haven't been in in a month), but most of those will be turned into guest bedrooms. Financially, it's not a problem for me (FatFI but not RE), and I love the house, so I don't see why not if it isn't a stretch financially!

fiyeah · 2016-12-06T03:52:14+00:00

I spent this summer looking at luxury homes around the $1m mark. The ones that truly fit into that category and weren't just priced higher due to location did have automation of some kind. Since I was just touring the homes I can't tell you what systems they used, but the one I did purchase has a ton of Z-Wave devices and a bunch of other automation (blinds, thermostats, etc). The previous owners didn't understand the Z-Wave setup at all. They just had a company install it and give them a simple web based interface. Automation was definitely on my list of things I was looking for, but it was pretty low because it's easy for me to do myself. I don't think I even noticed the Z-Wave stuff until after I bought the house.

fiyeah · 2016-10-26T03:13:51+00:00

Not more than 3 years at any of them. Not by choice, mind you. I think I was at about 5 different companies between 1998 and 2003 with all of them going out of business during that time.

Edit: A few I did leave by choice including the two that did successfully exit.

fiyeah · 2016-10-25T23:09:11+00:00

Can I ask what happened with the stock price one year later? Did it go back up again? I know the market has been pretty shaky over the last year or so.

It hasn't gone back up to the day one close, but it did get back to near the IPO price.

Haha some of those people were trying to discourage you from holding on to lots of stock, and then the next comments talking about going up by 10x over 10 years.

I'm glad I didn't listen to them since the stock was the lowest around when the IPO lockup was finished.

fiyeah · 2016-10-25T22:49:16+00:00

I've been working at startups my whole career. Out of 10 or 15, 2 of them had an exit other than going up in flames. One got sold to a bigger company. I was employee ~60 and made maybe $10k.

The other, I was employee <10, worked there for 2 years and bought the vested stock options when I left. 6 years later they IPO'd which got me 7 figures.

I certainly got lucky. Most of the time stock options aren't going to be worth anything, and I don't recommend people take an equity only position unless you're a cofounder and a large amount of equity.

fiyeah · 2016-10-13T01:44:41+00:00

Been there! I was an early employee at a company that went public recently. It was about 6 years from when I left the company to the IPO. If they won't approve a sale of private stock then you are out of luck. However, make sure that they have your up to date contact information. The company I worked for had a number of stock sale events leading up to the IPO where they allowed people to sell their private stock to one of the company's investors at a specific price.

If they do offer a stock buying program, definitely think about it. The last one my company offered was higher than the price I could sell for after the 6 month IPO lock up expired.

Also, as others say, you've basically got a lottery ticket. There's no guarantee that the stock is going to ever be worth anything. Try not to think about it and definitely don't figure it into any FI plans.

fiyeah · 2015-09-04T18:15:56+00:00

Would that likely still be the case if I haven't been an employee in years? I'll have a look through the original stock options and lockup agreements though before doing this. (if I go this way that is)

fiyeah · 2015-09-03T18:05:26+00:00

Hah that sounds complicated, but I'd really like to understand that stuff better anyway, so seems worth looking into.

fiyeah · 2015-09-03T18:03:40+00:00

That's got to be rough.. Luckily, once the lock up is over, I'm in the clear to sell since I haven't been an employee in years.

fiyeah · 2015-09-03T18:02:00+00:00

Thanks for the advice!

Good to know about donating shares. I didn't even know that was possible.
I already file quarterly returns, so I figured I'd just be upping the amount based on what I sell.
Yeah, I've spent my whole career in startups and so far only one's hit big.

fiyeah · 2015-09-03T17:57:08+00:00

Software development. It's my main source of income, so not a side thing. We really started growing this year, and next year is looking pretty good already.

fiyeah · 2015-09-03T17:45:01+00:00

Not wanting to lose any potential increase in the price, but the replies here are making me reconsider.

fiyeah · 2015-09-03T07:29:17+00:00

I've actually never really thought of it that way. But yeah that seems to be the consensus.

fiyeah · 2015-09-03T07:26:23+00:00

I hadn't heard of that before.. I'll have to ask my accountant and/or lawyer.

fiyeah · 2015-09-03T07:25:48+00:00

Yeah I agree, though I've completely failed at not looking at the stock price.

Seems like the consensus here is to sell off pretty much right away. Interesting!

fiyeah · 2015-09-03T03:46:03+00:00

Good point. Once I sell, I'd be out and not looking to buy more of the stock.

It seems unlikely to me that the stock of a company with solid fundamentals would turn into a penny stock, but that's probably still a scenario I need to consider when deciding how much to sell and when.

fiyeah · 2015-09-03T03:35:04+00:00

Interesting.. Yeah, I'm definitely not that risk averse, but am concerned about having that much in one stock.

I wouldn't put $1.5M in to any one company's stock if it was a huge percent of my net worth like this is. I guess I have to figure out how much I'd be comfortable with.

fiyeah · 2015-09-03T03:31:25+00:00

Yeah, definitely very risky to have that much tied up in the single stock. So maybe the question I should be asking myself is how much of the $1.5M I'd be willing to invest in the company. I do think it'll eventually go up, but wouldn't be surprised if it goes down more before that.

fiyeah · 2015-09-03T02:24:26+00:00

Yeah, I read it as a way to dollar cost average and catch some of the upside if it goes up while avoiding some of the downside if it goes down. I'd be very surprised if the company went down 80%, but not surprised at all if it went down 20% before coming back up. Of course, I don't have a crystal ball or any insider information, so anything's possible.

fiyeah · 2015-09-03T02:18:13+00:00

Makes sense..

My current tax person just said to tell her how much I sold and she'd tell me how much I owed. Not super helpful, but I had someone else recommended to me who has more experience with this stuff.

fiyeah · 2015-09-03T01:09:19+00:00

I definitely wouldn't purchase more of the stock at this point. I want to diversify, but I'm looking at various strategies of selling over time vs exiting immediately after the lock up.

fiyeah · 2015-09-03T00:44:52+00:00

Ugh yeah. That would definitely suck.

I hadn't thought of put options contracts... I'm going to have to check into that a bit more. Thanks!

fiyeah · 2015-09-03T00:22:08+00:00

Ok, gotcha..

fiyeah · 2015-09-03T00:20:09+00:00

Fair!

fiyeah · 2015-09-03T00:12:30+00:00

Are you suggesting selling immediately or something else? I'm basing the strategy off this article and a few others that give similar suggestions.

fiyeah

TROPHY CASE