What is my next step with investing, given a signing bonus of restricted stock units?
Coincidentally just read a nice post on this topic: http://thefinancebuff.com/no-tax-advantage-in-rsu.html In short, sell the stock as soon as it vests and treat it as a cash bonus. Assuming you're in the US and the stock is possible to sell (public company, no trading window restrictions, you have no material nonpublic information, etc.)  What do you do with a cash bonus? If you have no savings, an emergency fund would be good, then start on retirement savings perhaps... it sounds a bit like you could use some broad general financial planning info, my favorite book for that is: http://www.amazon.com/Smart-Simple-Financial-Strategies-People/dp/B0013L2ED6 One exception to selling immediately could be if the company stock is hugely undervalued, but it probably isn't, and it's probably too hard to determine.
"So you've already considered relocation. Here are a few additional things to consider with respect to negotiating a signing bonus (if any): Would you be leaving a position where you are eligible for an upcoming bonus, profit-share, or other special incentive payout, such as a stock option or RSU vesting date?  A signing bonus can help offset the opportunity cost of leaving a previous job when an incentive payout date is near. At the new company, would you be required to wait some pre-defined period to be eligible to participate in the pension or retirement savings plan with employer basic or matching contributions? If you were receiving ongoing employer contributions in your previous company's plan and would need to wait, say, six months before participating in the new company's plan, a signing bonus can offset lost employer contributions in the interim. Consider funding your own IRA in that time. Would you be required to give up something else of value to you that your previous employer was providing, such as an expensive laptop, that is not expected to otherwise be replaced by the new company? Whether they offer a signing bonus and how much you can expect to negotiate is based on a lot of factors and you'll need to ""play it by ear.""  Remember what bonus means: ""A payment or gift added to what is usual or expected, in particular."" Remember also that a signing bonus is a one time thing.  In general, it's more important to consider the overall ongoing compensation package – salary and incentive plans, vacation, retirement benefits, health benefits, etc. – and whether those meet your long-term needs." You're technically 'allowed' to do other investments with your Roth, but you get taken to the cleaners by the financial 'services' community who wants to take a slice.  Non-securities investments from a Roth typically require a 'custodian' or other intermediary to handle your investment, e.g. buying silver coins and paying someone else to hold them. Buy these with cash and hold them yourself, assuming you trust yourself more than some stranger. "Thank you for the in-depth, detailed explanation; it's refreshing to see a concise, non verbose explanation on reddit.  I have a couple of questions, if that's alright.   Firstly, concerning mezzanine investors. Based on my understanding from Google, these people invest after a venture has been partially financed (can I use venture like that in a financial context, or does it refer specifically to venture capital?) so they would receive a smaller return, yes? Is mezzanine investing particularly profitable? It sounds like you'd need a wide portfolio.  Secondly, why is dilution so important further down the road? Is it to do with valuation?  Finally, at what point would a company aim to meet an IPO? Is it case specific, or is there a general understanding of the ""best time""?  Thank you so much for answering my questions." If you are going to the frenzy of individual stock picking, like almost everyone initially, I suggest you to write your plan to paper. Like, I want an orthogonal set of assets and limit single investments to 10%. If with such limitations the percentage of brokerage fees rise to unbearable large, you should not invest that way in the first hand.  You may find better to invest in already diversified fund, to skip stupid fees. There are screeners like in morningstar that allow you to see overlapping items in funds but in stocks it becomes trickier and much errorsome. I know you are going to the stock market frenzy, even if you are saying to want to be long-term or contrarian investor, most investors are convex, i.e. they follow their peers, despite it would better to be a concave investor (but as we know it can be hard).  If the last part confused you, fire up a spreadsheet and do a balance. It is a very motivating activity, really. You will immediately notice things important to you, not just to providers such as morningstar, but alert it may take some time. And Bogleheads become to your rescue, ready spreadsheets here. "Because I'll be investing time, effort, energy and take some initial risks I would like to receive more shares (more than just purely financial contribution would suggest) I don't see money in that list.  How much money will you be contributing to your own project? Mutual understanding, focusing on big image, rather that covering each and every edge case. These kinds of one page agreements are an excellent ""idea"" and they work just fine when everyone is happy and everything is working well; they are an utter nightmare if anything goes sideways.  Coincidently, the reason you write anything down at all is to have everyone agree on the same big picture at the same time. People's memory of the original big picture gets fuzzy when their money might not come back to them.  You don't need to cover all edge cases, but you need to cover obvious negative outcomes.  What if you can't find a renter?  What if you're late paying someone back?  What if your vendor ""repairs"" something incorrectly?  What if you forget to get a permit and the vendor needs to come back to tear it all apart and redo the work?  What if your project needs more money, who is required to contribute, who has the option to contribute, who gets diluted?  Who is doing the work of managing the project, how much is that person getting paid, how is that person's pay determined, how can it be adjusted?  Is any work expected from any other investor, on what terms, who decides the terms?  What if you get an offer to buy the building, who decides to sell, etc and so forth and on and on and on... You write down an agreement so everyone's understanding of the agreement is recorded.  You write down what will happen in XYZ event so you don't argue about what you all should do when that event does ultimately occur.  You take as much equity as your other investors will allow you to have, and you give them as much as required to get their money.  Understand that the more cooks there are in the kitchen the more difficult it is to act on a problem when one arises; when not if. Your ego-stroking play to ""open source crowd-sourced wisdom"" is nothing more than a silly request for vague advice at no cost.  Starting a project on trust, transparency and integrity is naive.  This is about money.  Why on earth should anyone trust you with their money if you won't do the most basic step of stewardship and spend a couple hundred pounds to talk to a local professional about organizing your first ever project. To answer your question directly, the first precaution you should take is not taking money from any of your friends or family." The idea is you would also have a cash allowance in the portfolio originally - say 25%. So in this scenario, 375K in stock and 125k in cash. and assuming the goal is 1K increase in stock value you would buy 38.5K of stock at the now lower price. In my opinion, I would: If the income is from this year, you can tax shelter $59,000 plus somewhere between $50,000 and $300,000 depending on age, in a 401(k) and defined benefit plan. This will take care of the current tax burden. Afterwards, set aside your remaining tax liability in cash. The after-tax money should be split into cash and the rest into assets. The split depends on your level of risk tolerance. Build a core portfolio using highly liquid and non-correlated ETFs (think SPY, TLT, QQQ, ect.). Once these core positions are locked in. Start lowering your basis by systematically selling a 1 standard deviation call in the ETF per 100 units of underlying. This will reduce your upside, extend your breakeven, and often yield steady income. Similarly, you can sell 1 standard deviation iron condors should the VIX be high enough. Point is, you have the money to deploy a professional-type, systematic strategy that is non-correlated, and income generating. No, the reinvestment is done as a courtesy. Consider, one can have, say, 100 shares of a $50 stock. A 2% dividend is $100/yr or $25/quarter. It would be a pretty bad deal if brokers charged you even $5 for that trade. When cap gains and dividends are grouped as you suggest, it refers to Mutual Funds. My funds will have a year end dividend and cap gain distribution. In a non-retirement account, one has to pay the tax due, and be sure to add this to your cost basis, as it's money you are effectively adding to your account. It does not mean cap gain the same as when you sell your shares of Apple for a huge gain.  Those check boxes seem to offer you a chance to put all your holding on the same reinvestment plan for div/cap gain. You should also be able to choose one by one what you'd like to do. So, first -- good job on making a thorough checklist of things to look into. And onto your questions -- is this a worthwhile process? Even independent of specific investing goals, learning how to research is valuable. If you decided to forgo investing in stocks directly, and chose to only invest in index funds, the same type of research skills would be useful. (Not to mention that such discipline would come in handy in other fields as well.) What other 80/20 'low hanging fruit' knowledge have I missed? While it may not count as 'low hanging fruit', one thing that stands out to me is there's no mention of what competition a company has in its field. For example, a company may be doing well today, but you may see signs that it's consistently losing ground to its competition. While that alone may not dissuade you from investing, it may give you something to consider.  Is what I've got so far any good? or am I totally missing the point. Your cheat sheet seems pretty good to me. But a lot depends on what your goals are. If you're doing this solely for your education and experience, I would say you've done well. If you're looking to invest in a company that is involved in a field you're passionate about, you're on the right track. But you should probably consider expanding your cheat sheet to include things that are not 'low hanging fruit' but still matter to you.  However, I'd echo the comments that have already been made and suggest that if this is for retirement investments, take the skills you've developed in creating your cheat sheet and apply that work towards finding a set of index funds that meet your criteria.  Otherwise happy hunting! Thanks for your thorough reply.   Basically, I found a case study in one of my old finance workbooks from school and am trying to complete it.   So it's not entirely complicated in the sense of a full LBO or merger model.   That being said, the information that they provide is Year 1 EBITDA for TargetCo and BuyerCo and a Pro-Forma EBITDA for the consolidated company @ Year 1 and Year 4 (expected IPO). I was able to get the Pre-Money and Post-Money values and the Liquidation values (year 4 IPO), as well as the number of shares.   I can use EBITDA to get EPS (ebitda/share in this case) for both consolidated and stand-alone @ Year 1, but can only get EPS for consolidated for all other years. Given the information provided. One of the questions I have is do I do anything with my liquidation values for an accretion/dilution analysis or is it all EPS? Wow, hard to believe not a single answer mentioned investing in one of the best asset classes for tax purposes...real estate.  Now, I'm not advising you to rush out and buy an investment property.  But rather than just dumping your money into mutual funds...over which you have almost 0 control...buy some books on real estate investing.  There are plenty of areas to get into, rehabs, single family housing rentals, multifamily, apartments, mobile home parks...and even some of those can have their own specialties.  Learn now! And yes, you do have some control over real estate...you control where you buy, so you pick your local market...you can always force appreciation by rehabbing...if you rent, you approve your renters.  Compared to a mutual fund run by someone you'll never meet, buying stocks in companies you've likely never even heard of...you have far more control. No matter what area of investing you decide to go into, there is a learning curve...or you will pay a penalty.  Go slow, but move forward. Also, all the advice on using your employer's matching (if available) for 401k should be the easiest first step.  How do you turn down free money?  Besides, the bottom line on your paycheck may not change as much as you think it might...and when weighed against what you get in return...well worth the time to get it setup and active. "Recently, I asked about what the company valuation is and how many   shares does my 4% represent.CFO told me that there is no point to talk   about ""shares"" or ""stock"" since the company is not public. Is it   right? No, it is wrong. Shares and stocks exist regardless of how they can be traded. Once a company is formed, there are stocks that belong to the owners in the proportion of the ownership. They may not exist physically, but they do exist on paper. As an owner of 5% of the company, you own 5% of the company stocks. I asked if my investor portion equity will be subjected under a   vesting schedule, CFO said yes. That doesn't make sense to me, because   I bought those 4%? Aren't those supposed to be fully vested? I agree   to my employee equity to be vested. Doesn't make sense to me either, since your money is already in their pocket. But I'm not sure if its illegal. If that's what is written in the signed contract - then may be its possible to have that situation. But it doesn't make much sense, because these shares are granted to you in return to your money, not some potential future work (as the 1% employee's portion). You already gave the money, so why wouldn't they be vested? Best to read the contract upon which you gave them your money, I really hope you have at least that and not just gave them a check...." Restricted Stock Units are different from stock options because instead of buying them at a particular strike price, you receive the actual shares of stock. They are taxed as ordinary income at the time that the restriction is lifted (you don't have to sell them to be taxed). Usually, you can choose to have a percentage of the stock withheld to cover tax withholding or pay for the withholding out of pocket (so you can retain all of your shares). "The recommendation is not to make the investment. In general, a company does not have to sell their shares to you or allow you to become an investor, because, as you have stated, it is a private company not quoted on the stock market.   If everyone were trustworthy, you could buy the tools for $11000 -- so that you own the tools -- and sign a lease of the tools to the company whereby they pay you $X/month.  The lease should be reviewed by a lawyer before it is signed, and perhaps give the buyer the right to demand back the tools at any time.  However, even this arrangement is very risky, because the ""company"" could simply steal or damage the tools and disappear.   It is not an investment that I would make, because it sounds too good to be true.  $2800/mo steady cash flow for $11,000 invested.  No, I don't think so.   The following information may also be useful, either to you, or future readers: If you still want to make this investment, then you should know that: The offering for sale of shares by companies located in the USA is subject to a wild array of complex laws.  This is true in many other countries as well.  These laws,  called securities laws or regulations,  can require certain disclosures, require that investors have a high net worth so that they can afford to lose the money or conduct their own investigations and legal actions, or require that the investors know the company founders personally, and can prohibit or limit resale by the buyer/investor.  Promoters who say you can still invest and are ignoring or disobeying the securities laws are being at least negligent, but more likely are dishonest and probably criminal.  Even if you trust in the investment, can you trust negligent managers to do a good job executing that investment? What about dishonest managers?  What about criminals and thieves?" "I can't find a decent duplicate, so here are some general guidelines: First of all by ""stocks"" the answers generally mean ""equities"" which could be either single stocks or mutual funds that consist of stocks. Unless you have lots of experience that can help you discern good stocks from bad, investing in mutual funds reduces the risk considerably. If you want to fine-tune the plan, you can weigh certain categories higher to change your risk/return profile (e.g. equity funds will have higher returns and risk than fixed income (bond) funds, so if you want to take a little more risk you can put more in equity funds and less in fixed income funds). Lastly, don't stress too much over the individual investments.  The most important thing is that you get as much company match as you can.  You cannot beat the 100% return that comes from a company match. The allocation is mostly insignificant compared to that.  Plus you can probably change your allocation later easily and cheaply if you don't like it. Disclaimer:  these are _general_ guidelines for 401(k) investing in general and not personal advice."