The Dalai Lama, and My Path to Happiness tm 7045 3g характеристики Nearly three years ago I was fortunate enough to see the Dalai Lama speak at the University of Washington.  To this day I have remembered his teachings, trying my best to be friendly, compassionate, patient, and tolerant.  Since his talk I’ve read several books by and about him, each as insightful as the next, my favorite being The Art of Happiness.  Today I’m grateful to have been able to see him speak again, this time at Stanford.  I’ve decided to share how I’ve grown the last three years with regard to his teachings with the hope that perhaps I can help some of you to be happier.

стих про черемуху I grew up in a fairly wealthy suburb of Los Angeles, desiring to maintain my somewhat material lifestyle.  I even considered an investment banking internship before my senior year of college with the intention of retiring young and teaching.  I believe through traveling in Europe and China, along with truly believing in the Dalai Lama’s teachings, I have found an inner happiness that is stable and constant.  Let’s start with my travels.

диаметр головы таблица Traveling opens one’s eyes to different cultures, each with different values and expectations.  For example, Denmark ranks the happiest country in Europe for several reasons including faith in government, good work/life balance, love of life, and many other things.  Witnessing the lives of those in countries like Denmark had a large impact on my realization that material desires are not only shallow, but they aren’t lasting and stable.  A material achievement, for example purchasing a fast car, leaves you wanting more.  Never will one’s desire for material possessions be fully satisfied.

пуфики для собак своими руками The Dalai Lama’s principal teachings around inner peace are highlighted by compassion, patience, and tolerance.  True compassion for others opens our hearts wider than they would otherwise be, allowing for a momentum to build within us and drive us to be happier.  Compassion comes in two levels.  The first is compassion for your friends and family.  This type of compassion is more understandable and easier to contribute.  The second level of compassion is directed at one’s enemies, or those people that try to inflict harm on us.  When a human knowingly harms another such an action doesn’t go unnoticed.  Eventually this harmful human will be recognized in a family or community, alienating oneself and bringing upon loneliness and sorrow.  When anyone does harm on you, first understand that this harmful person is a human, striving to find happiness in this life.  Recognize that this harmful person is harming themselves, and exhibit the patience and tolerance to show this individual compassion.  Be compassionate because in the end knowingly harmful people will be lonely and unhappy.

бизнес проект образец с расчетами Understand, too, that one’s enemy is the best teacher of patience and tolerance.  Instead of grimacing about a harmful person or situation, use such opportunities to improve your patience and tolerance.  Such qualities let us show compassion more easily to those who need it most, allowing us to open our hearts even more, providing more space for an inner peace and lasting happiness.

лоскутное одеяло своими руками схемы Inner peace isn’t a destination, though.  Instead it’s a journey we all take through the peaks and valleys of our emotional lives, where each peak we remind ourselves why we’re alive, and each valley we strengthen our inner self.  Through constant practice of patience, tolerance, and compassion we can grow happier, more peaceful and calm, contributing to our world with positive emotions, smiles, and laughter.

So I challenge you to be kind towards the next individual that causes you harm.  Recall that we’re all humans, striving to find happiness.  Use difficult times to teach yourself patience and tolerance.  Show true care and compassion to everyone and everything.  Warm those around you with your actions.  All the while your heart will open, allowing for a stronger bond with others, and a larger capacity for yourself to be happy, warm, and fulfilled.

I truly believe I’m happier when I’m kind and warm to others, when I see my actions cause others’ lips to curve, revealing a smile that connects us all together and reminds us all that we share so much in common.  We’re all humans, all striving to be happy.  I’ve surrounded myself with reminders, bringing to mind happiness as a journey and the truth that we’re all after the same goal.  I wear mala beads, have a jade Buddha next to my bed, and the following unknown quote printed and placed under said Buddha.

I shall pass this way but once; any good, therefore, that I can do or any kindness that I can show to any human being, let me do it now. Let me not defer nor neglect it, for I shall not pass this way again.

Photo credit.

Incentive Stock Options and Taxes

Having spent two years at Cloudera, starting as the third employee and leaving with the company between 40 and 50 employees, I’ve learned a thing or two about the tax law and how one can optimize the exercise and sale of shares to avoid taxes. лмех в туле каталог Disclaimer: I Am Not a Tax Expert

I am not a tax expert.  You should consult a tax specialist if you ever need to optimize for the exercising and selling of stock options.  Much of what is covered here was learned in Consider Your Options, which I recommend reading if you ever are granted stock options.

Also, in no way do the example numbers listed below reflect on Cloudera’s stock option grants or fair market value.  The numbers below are completely arbitrary, even numbers to make calculations easy.

чай с розмарином полезные свойства Background

Before we start talking about exercising and selling I should cover some terminology and common practices.  Tech startups usually give stock options to their employees in exchange for less salary.  There are two types of stock options: incentive stock options (ISOs) and non-qualified stock options (NSOs).  Most tech startups, especially in the early days, will issue ISOs to their employees.  This post only covers ISOs, not NSOs.

In most startup cases, especially for engineers and business owners, part of an employee’s offer for employment will be a stock options grant.  A grant includes an amount of stock options, a strike price, and a vesting schedule (more below).  A stock option is an option to buy a share of the company, and the strike price is the amount each share costs if you decide to exercise your options and purchase shares.  Earlier grants will have smaller strike prices and more shares than later grants, assuming the company is doing well.  As a company grows and succeeds, risk of employment is lower and valuation is higher, hence less shares and larger strike prices will apply.  It’s possible to get additional grants from the company, perhaps in the event of an additional funding round or in the event of performance compensation.

The fair market value (FMV) of the company is the amount of money each share is worth at a given time.  This number changes every time a company raises a round of funding, and even possibly on anual or semi-anual schedules.  For example, a startup that has seen only one round of funding (series A) might have a FMV of $.15 per share.  Whereas a startup that has seen two rounds of funding (series A and B) might have a FMV of $1.00 per share.  The numbers outlined here for Series A and B companies are completely arbitrary.

Option grants typically include a vesting schedule as well.  A vesting schedule dictates when an employee is allowed to exercise options.  Most vesting schedules are the same across tech startups.  Typically your granted stock options vest over four years.  During the first year none of your stock options will vest.  Then, at your one year anniversary 25% of your granted stock options will be vested and available for exercise.  Then, each month 1/48th of your granted stock options will vest.

гдз тестыпо русскому 7 класс баранова Timeline, From Options Grant To Money

Here’s the timeline of events that will likely occur during the time an employee receives a grant and sells a share for cash.

  1. Grant received from employer
  2. Vesting period met (e.g., after one year)
  3. Stock option exercised — employee must pay company # of shares X strike price; employee owns share
  4. Exit — either the employee sells their share on a market (public or private), or an acquiring company converts an employee’s shares to cash or the acquiring company’s shares можно ли пожарить яичницу Short-term Capital Gains vs. Long-term Capital Gains

The taxes paid when a share is sold, either to a public or private market, depend on the duration and timing of exercise and sale.  Short-term capital gains taxes are taxes paid for shorter term investments, maxing out at 39% (like income tax).  Long-term capital gains taxes are taxes paid on longer term investments, which is currently 15% and rumored to increase to 20%.  One needs to optimize their exercise and sale schedule to try and avoid paying short-term capital gains tax.  In order to avoid paying short-term capital gains on ISOs one needs to hold a stock option for at least a year, exercise, then own the share for at least a year before selling the share for cash.  Notice that at a minimum the described practice will require at least two years between the time of grant and the time of sale for cash.  So let’s say I’m granted 100,000 shares at a strike price of $.10.  If I were to purchase 25,000 shares exactly a year after my grant, I would pay my employer $2,500 (shares X strike price) and be able to sell those shares exactly a year later to avoid short-term capital gains.  If either the exercise happens before a year, or the sale happens before two years (from the grant period), then short-term capital gains will apply.  Note that often companies won’t let employees sell shares for cash unless the company is public.

So again, if you believe your company will do well you should exercise options at least a year after their grant date, and don’t plan to sell those shares for cash for at least an additional year, totaling at least two years of total investment. стол из мебельного щита своими руками Avoiding Alternative Minimum Tax (AMT)

The other trap to avoid when planning an exercise and sale schedule is alternative minimum tax, or AMT.  AMT is wildly confusing and I only understand some of its circumstances.  Think of the AMT as being a way for the federal government to tax you more in certain circumstances.  One such circumstance is in the event of exercising options.  Normal tax law doesn’t apply at all to the exercising of ISOs.  That is, if I exercise options, even if they’re worth a lot of money according to the FMV, I will not pay normal tax.  However, I may need to pay AMT.  AMT is a function of a lot of things (again, it’s insanely confusing), but for this discussion it’s mostly a function of the difference between strike price and FMV.  That is, if you exercise options for $.10 a share and those shares have a $5.00 FMV, it’s likely you will be required to pay AMT depending on the amount of options exercised, your household income, and other factors.  For example, let’s say I exercise 10,000 options at a strike price of $.10 and a FMV of $5.00.  This means I will pay $1,000 to my employer for a quantity of stock worth $50,000.  This difference of $49,000 could force me to be eligible for AMT, depending on my household income and other factors.  What’s so problematic about AMT is that you may need to pay taxes on exercised options without being able to sell your shares, perhaps because your company doesn’t yet allow selling of shares.  So imagine the following example:

  1. Exercise 10,000 options at a strike price of $.10
  2. Pay my employer $1,000
  3. Assume FMV of $5.00 per share, making my options worth $50,000
  4. Assume AMT applies to me
  5. I may need to pay thousands or tens-of-thousands of dollars in AMT taxes due to the $49,000 difference, depending on household income and other factors
  6. The company goes bankrupt and my shares are worth nothing.

The above situation is possible because the FMV is very volatile in startups.  Let’s say the FMV drops from $5.00 to $1.00 the next tax year, I’ve still paid taxes on a $5.00 FMV!  And if the company goes bankrupt I’ll have paid taxes on equity I wasn’t able to sell!  And I’ll have given the company money to exercise my options!  Ouch!  Note that in this case one accumulates AMT credit, which might decrease future AMT amounts.  Again, wildly complicated!

One only needs to optimize for AMT in the event of an increase in FMV.  If your startup sees a large increase in FMV, you should absolutely attempt to exercise your options before the FMV increases, avoiding AMT altogether.  Otherwise you’ll need to be prepared to pay taxes in April, or make the decision to wait to exercise and immediately sell, forcing you to pay short-term capital gains. тандыриз цветочных горшковсвоими руками Conclusions

ISOs and their tax implications are confusing and tricky.  And playing this game may save you thousands, hundreds of thousands, or even millions of dollars depending on how your startup performs.  I highly recommend reading Consider Your Options and consulting a tax specialist if you get yourself some stock options.  And please let me know if my post is incorrect, or if I’m missing anything.

In other news, I was expecting this post to be nice and short, in contrast to most other essays on this subject.  However, I seem to have failed to make this short and concise.  Pesky task law :).