Imagine joining a startup as employee number 10. Your salary is a bit below what the market pays for your role, but, in exchange, you get equity. How much? 0.25% of the company to be exact. You do the math in your head—if the company sells for $100M in a few years, you'll make $250,000. Not bad, right? Wrong, and for quite a few reasons. Once you take into account how startup equity typically works, that initial equity grant is worth $97,500, not $250,000. Let's walk through why this is the case and then answer an even bigger question: is startup equity a bad deal? Why Initial Equity Isn't Exit Equity Startup equity is confusing because most of what determines its value happens behind the scenes (outside of an employee's control). This is why, as an employee, your equity at exit is rarely what your initial grant was. This happens for the following reasons: - Vesting : Most startup equity vests over four years with a one-year cliff. This means you get nothing if you leave within th

A few months ago, I analyzed U.S. stock returns over the last century . Today, I'm going to determine the best portfolio over the last 50 years among the following asset classes: - U.S. Stocks - International Stocks - Real Estate Investment Trusts (REITs) - U.S. Corporate Bonds - 10-Year Treasury Notes - 3-month Treasury Bills - Gold - Commodities - U.S. Homes To do this, I examined the BullionVault annual return data from 1972-2025 (54 years) to determine the optimal/best portfolio over this time period. But before we look at the optimal portfolio, let's get a better understanding of how these various asset classes performed since 1972. How Have Assets Performed Since 1972? Since 1972, investors have experienced a wide range of outcomes including bull markets, bear markets, recessions, inflationary periods, and everything in between. As a result of this, asset class returns have varied widely as well. Below is a chart illustrating this for the nine asset classes listed abov

I recently joined a professional organization to discuss various topics in wealth management. On our first Zoom call there was a debate around the use of levered long/short strategies. For the uninitiated, a levered long/short strategy is a way of taking market risk (like buying an index fund) while generating tax losses to offset capital gains (now or in the future). The leverage is what's important here. By borrowing against your holdings, you can short some securities while keeping the same overall market exposure as an index fund. So if the market goes up, you'd close your short positions (which lost money) to generate tax losses and hold your long positions (which made money). And if the market goes down, you do the opposite. Depending on how the market performs and how much leverage you use, you can generate cumulative net capital losses ranging from roughly 30% to 200% of the original capital invested over a decade. So if you invested $1M, these strategies could create anywhe