Re:TLDR Stock Options
by smileysteve on Monday March 04, 2019 @04:12PM
(#19305567)
> Would a reasonable person rather take a guaranteed $1000 or a 10% chance of a $1 million?
When they have monthly expenses, or understand the power of compounding interest? A reasonable person would take the guaranteed.
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Even if you make your example less hyperbolic (for an employee):
$100k vs $90k + a 5% chance of making $50k in 5 years.
Where, the higher and guaranteed salary also has 3% annual COLA (or further freedom to job switch) raises, has a 4% 401k match; The wise person would take the guaranteed income.
When they have monthly expenses, or understand the power of compounding interest? A reasonable person would take the guaranteed.
----
Even if you make your example less hyperbolic (for an employee):
$100k vs $90k + a 5% chance of making $50k in 5 years.
Where, the higher and guaranteed salary also has 3% annual COLA (or further freedom to job switch) raises, has a 4% 401k match; The wise person would take the guaranteed income.