Realized we made a major mistake and feeling really sick.

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cdu7
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Realized we made a major mistake and feeling really sick.

Post by cdu7 » Fri Jan 17, 2020 1:03 pm

My wife recently made us sit down and calculate what our old company stock options would be worth had we never sold any over the years and held them up until now. We had been consistently selling over many years at a regular schedule. In total we have made roughly 850k before taxes on these options. I realized had we not sold anything they would currently be worth 1.8 million (before taxes)........... I feel absolutely sick; I feel as if I just burned up a lottery ticket..... I literally left a million dollars on the table......

How do I get over this feeling of disaster. I never should have done this calculation......

Mr. Rumples
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Re: Realized we made a major mistake and feeling really sick.

Post by Mr. Rumples » Fri Jan 17, 2020 1:06 pm

Its a punch in the gut. We all have them, perhaps not as bad as this, but we do. Treat it as if you are in mourning and it will get better in time.

I learned a lesson a long time ago: never look back on what an investment might be worth today.

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BogleFanGal
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Re: Realized we made a major mistake and feeling really sick.

Post by BogleFanGal » Fri Jan 17, 2020 1:08 pm

I held onto mine and lost tens of thousands when the company unexpectedly tanked. Was writing that one off for a while. Be grateful and thankful you made so much money...first world problem
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mouses
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Re: Realized we made a major mistake and feeling really sick.

Post by mouses » Fri Jan 17, 2020 1:08 pm

You've got $850K. If you'd held you could have wound up with nothing.

My brother held company stock even though I kept saying at least sell some of it, and one day it went down 50%.

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CAsage
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Re: Realized we made a major mistake and feeling really sick.

Post by CAsage » Fri Jan 17, 2020 1:08 pm

Possibly not that much. Keep in mind, that money went to other things over the years (possibly including other investments or retirement accounts that might not have been funded otherwise) and taxes might have been worse. Not a really helpful or productive exercise to have done.
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Re: Realized we made a major mistake and feeling really sick.

Post by mrc » Fri Jan 17, 2020 1:09 pm

Did you sell because you needed the proceeds? Because you didn't want your asset allocation skewed too far toward company stock? This could also have been the best move you ever made had the stock tanked recently. Many would be happy with an $850K gain and wouldn't look back!
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Re: Realized we made a major mistake and feeling really sick.

Post by TropikThunder » Fri Jan 17, 2020 1:09 pm

Did you calculate how much the options would be worth if the company had gone out of business?

ETA to CASage: +1. What did you use the proceeds for? Trips to the Bahamas, or VTSAX? If VTSAX, how much is THAT worth now? I guarantee it will close the gap on your phantom loss.
Last edited by TropikThunder on Fri Jan 17, 2020 1:11 pm, edited 1 time in total.

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Re: Realized we made a major mistake and feeling really sick.

Post by bungalow10 » Fri Jan 17, 2020 1:09 pm

What did you do with the money when you sold? Did you invest it? Make sure you include all the gains from the investments in your comparisons.
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Re: Realized we made a major mistake and feeling really sick.

Post by Brianmcg321 » Fri Jan 17, 2020 1:10 pm

No you didn’t. You made 850k.

If I had invested my life savings in Microsoft in 1980 I’d be a billionaire. I didn’t but oh well.

Will you feel better if your company goes bankrupt next year?

Take your wins when you get them. When you take them don’t look back at what if.
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Re: Realized we made a major mistake and feeling really sick.

Post by lazydavid » Fri Jan 17, 2020 1:11 pm

Do not confuse outcome with strategy. What if you had held them and the company had gone to zero? If selling them on the schedule you did was the right decision with the information you had at the time, then it was the right decision. I should have gone long on Apple, Amazon, and Tesla years ago, and I would be retired at 42 with more money than I know what do do with if I had. shoulda woulda coulda.

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Re: Realized we made a major mistake and feeling really sick.

Post by Jack FFR1846 » Fri Jan 17, 2020 1:11 pm

I received options that vested over 4 years. At the 1 year point, I sold a quarter of them and pocketed $70k. Then the stock tanked. A friend who held on to them left the company 5 years later. He pocketed zero.

In 1976, I was offered a 1970 Plymouth Superbird for $2500. Think if I had gone ahead and sold my van and bought it and held onto it. Today, they're worth between $100k and $200k. Back then, it was just a used car. Dealers were actually pulling off the wing and nose cone to sell them as "regular" cars because they couldn't sell them.
Last edited by Jack FFR1846 on Fri Jan 17, 2020 1:14 pm, edited 1 time in total.
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Re: Realized we made a major mistake and feeling really sick.

Post by sailaway » Fri Jan 17, 2020 1:11 pm

Wouldn't you feel even worse if it had gone the other way?

Did you spend all the money? Then what would you have done differently? Do the things you spent it on bring you joy?

Let it sit in cash? What makes you think you would have been comfortable with a higher stock portfolio?

Re-invest it? How much have those investments gone up?

If you sold it all today, how much more would you pay in taxes than you did over time?

Your post sounds like you are kicking yourselves over an apples to oranges comparison. You still might have been ahead, but probably not by a million dollars.

Goal33
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Re: Realized we made a major mistake and feeling really sick.

Post by Goal33 » Fri Jan 17, 2020 1:12 pm

I stopped doing these calculations. I've missed out on 250k or so by selling vested RSUs as they vest. - it's because of the boglehead 3 fund approach, but overall I try to remind myself with good outcomes don't always mean good strategy...
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Re: Realized we made a major mistake and feeling really sick.

Post by jpelder » Fri Jan 17, 2020 1:12 pm

Be glad that you didn't hold stock options in Kodak, Enron, Wachovia, or Lehman Brothers. Diversification reduces the risk of big losses. It also reduces the chances of big wins.

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Re: Realized we made a major mistake and feeling really sick.

Post by niceguy7376 » Fri Jan 17, 2020 1:13 pm

lazydavid wrote:
Fri Jan 17, 2020 1:11 pm
Do not confuse outcome with strategy. shoulda woulda coulda.

+100

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Re: Realized we made a major mistake and feeling really sick.

Post by Tamarind » Fri Jan 17, 2020 1:14 pm

TropikThunder wrote:
Fri Jan 17, 2020 1:09 pm
Did you calculate how much the options would be worth if the company had gone out of business?
This. You actually made a sensible choice considering you did not know what the future value of the shares would be.

OP, consider an actual lottery ticket. If I tell you that someone at your local gas station bought a ticket yesterday and won $500M, should you be kicking yourself because you did not buy a ticket yesterday? And the risk of loss from a lottery ticket is much smaller than that from your options, particularly if they were ISOs rather than RSUs.

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Re: Realized we made a major mistake and feeling really sick.

Post by Elysium » Fri Jan 17, 2020 1:14 pm

cdu7 wrote:
Fri Jan 17, 2020 1:03 pm
My wife recently made us sit down and calculate what our old company stock options would be worth had we never sold any over the years and held them up until now. We had been consistently selling over many years at a regular schedule. In total we have made roughly 850k before taxes on these options. I realized had we not sold anything they would currently be worth 1.8 million (before taxes)........... I feel absolutely sick; I feel as if I just burned up a lottery ticket..... I literally left a million dollars on the table......

How do I get over this feeling of disaster. I never should have done this calculation......
As others have stated, this is very obvious, your company could have gone bankrupt or went into serious financial issues causing stock to drop in value and stay there forever, causing you to not even gain that $850K. This is the first time I am hearing some complaining about not holding on to company stocks for more after they had the good fortune of making $850K. Be thankful for what you have, and stop worrying about how much more you could have had. Because you could have had far less.

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Re: Realized we made a major mistake and feeling really sick.

Post by jb1 » Fri Jan 17, 2020 1:14 pm

That’s it. Time to sell your house, sell your car, eat beans and rice forever.

As someone stated. First world problems. Perhaps extreme first world problems.

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Re: Realized we made a major mistake and feeling really sick.

Post by KlangFool » Fri Jan 17, 2020 1:16 pm

cdu7 wrote:
Fri Jan 17, 2020 1:03 pm
My wife recently made us sit down and calculate what our old company stock options would be worth had we never sold any over the years and held them up until now. We had been consistently selling over many years at a regular schedule. In total we have made roughly 850k before taxes on these options. I realized had we not sold anything they would currently be worth 1.8 million (before taxes)........... I feel absolutely sick; I feel as if I just burned up a lottery ticket..... I literally left a million dollars on the table......

How do I get over this feeling of disaster. I never should have done this calculation......
Remember Enron. My good friend lost about 1 million after working for Enron over 20+ years.

<<I realized had we not sold anything they would currently be worth 1.8 million (before taxes)>>

Or, it could worth zero tomorrow. Then, how would you feel?

Don't gamble with the money that you cannot afford to lose.

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Re: Realized we made a major mistake and feeling really sick.

Post by junior » Fri Jan 17, 2020 1:16 pm

Look up how much money most Americans make and try to show some gratitude.

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Re: Realized we made a major mistake and feeling really sick.

Post by KlangFool » Fri Jan 17, 2020 1:19 pm

OP,

A major mistake makes you homeless and starving on the street. Having 850K and making 1 million less is not a major mistake.

KlangFool

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Re: Realized we made a major mistake and feeling really sick.

Post by cashboy » Fri Jan 17, 2020 1:21 pm

cdu7 wrote:
Fri Jan 17, 2020 1:03 pm
How do I get over this feeling of disaster. I never should have done this calculation......
step back and you will see that it is not a 'disaster'.

it would have been a disaster if that stock tanked and you had gained only $8,500 instead of the $850,000 you made.

fwiw, i had a similar situation (of sorts...long story) so i am speaking from experience; try to become content with what you gained, not obsess about loss of potential gains.

:happy
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Re: Realized we made a major mistake and feeling really sick.

Post by JiggsJazzCar » Fri Jan 17, 2020 1:23 pm

Elysium wrote:
Fri Jan 17, 2020 1:14 pm
Be thankful for what you have, and stop worrying about how much more you could have had. Because you could have had far less.
That statement just hit me right in the face.... I have been having a similar issue and it seems it is hard to just be thankful for what we have sometimes.

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Re: Realized we made a major mistake and feeling really sick.

Post by Chadnudj » Fri Jan 17, 2020 1:28 pm

cdu7 wrote:
Fri Jan 17, 2020 1:03 pm
My wife recently made us sit down and calculate what our old company stock options would be worth had we never sold any over the years and held them up until now. We had been consistently selling over many years at a regular schedule. In total we have made roughly 850k before taxes on these options. I realized had we not sold anything they would currently be worth 1.8 million (before taxes)........... I feel absolutely sick; I feel as if I just burned up a lottery ticket..... I literally left a million dollars on the table......

How do I get over this feeling of disaster. I never should have done this calculation......
So if you hadn't sold, you'd be up $950k over some period of years?

Well, how many years? And what did you do with the $850k you got?

Did you pay down debt? At what interest rate? What's the total return on that amount?
Did you invest in the proceeds in S&P 500 index funds? What has that returned?

Honestly, depending on how you answer those questions, you might have made MORE money by paying down debt/investing proceeds in S&P 500 funds than leaving them ride.

hmw
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Re: Realized we made a major mistake and feeling really sick.

Post by hmw » Fri Jan 17, 2020 1:31 pm

What did you do with the 850k money you cashed out? If you invested in Amazon stock, you may be ahead. :happy

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Re: Realized we made a major mistake and feeling really sick.

Post by KyleAAA » Fri Jan 17, 2020 1:31 pm

You didn't make a mistake. Actions must be judged based on the information you had at the time, not the outcome. Do you feel sick the morning after the winning lottery numbers are announced because you missed out on buying a ticket with those numbers the week before? If not, you shouldn't feel sick about this.

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cdu7
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Re: Realized we made a major mistake and feeling really sick.

Post by cdu7 » Fri Jan 17, 2020 1:37 pm

Chadnudj wrote:
Fri Jan 17, 2020 1:28 pm
cdu7 wrote:
Fri Jan 17, 2020 1:03 pm
My wife recently made us sit down and calculate what our old company stock options would be worth had we never sold any over the years and held them up until now. We had been consistently selling over many years at a regular schedule. In total we have made roughly 850k before taxes on these options. I realized had we not sold anything they would currently be worth 1.8 million (before taxes)........... I feel absolutely sick; I feel as if I just burned up a lottery ticket..... I literally left a million dollars on the table......

How do I get over this feeling of disaster. I never should have done this calculation......
So if you hadn't sold, you'd be up $950k over some period of years?

Well, how many years? And what did you do with the $850k you got?

Did you pay down debt? At what interest rate? What's the total return on that amount?
Did you invest in the proceeds in S&P 500 index funds? What has that returned?

Honestly, depending on how you answer those questions, you might have made MORE money by paying down debt/investing proceeds in S&P 500 funds than leaving them ride.
It was over a period 6-7 years, the money went into our house, and into investments. It is impossible for me to track where "that money" went exactly, but it wasn't spent. I don't believe my returns over that period in the market were equal to these two companies returns. I know that they outperformed the broader market over the same period (one of them wildly outperformed). If I had just ignored it, I would be richer today than I am, Maybe not by exactly 1 million, but by hundreds of thousands more at a minimum. Everyone is absolutely correct that I made the right decision, I know I made the right decision. But it still hurts to think about. I never should have done this calculation......

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Post by 28fe6 » Fri Jan 17, 2020 1:40 pm

If we had all bought $TECHSTOCK 10 years ago, we would all be rich too.

This is not a "mistake" by any definition. If it is, you have therefore made MUCH MUCH bigger "mistakes", so I don't know why you are upset about selling the options. You should be much more upset about not buying growth stocks that would be worth much more than if you held the options. Heck, by this logic even if you held the options you would be kicking yourself for holding the options instead of cashing them out and buying any number of growth stocks that would have made you many millions more than holding the options would. So basically you would be upset no matter what you do unless you learn to get over this.

It is a fact that you would have made more by holding the options. This is literally possible only in hindsight. In an alternate reality, you would be patting yourself on the back for having dodged a bullet by cashing them out. This is what we are ALL telling ourselves, everyone who bought the total stock market instead of buying growths stocks that have gone up hundreds of percent.

You did not know, and could not have known. Nobody else could have known either.

I had a chance to get Tesla stock at a cheap price. I was not impressed with Tesla's business model and runway and declined; probably "cost" me a million or two. I don't care. Not buying any now either.

I had a chance to buy bitcoin when it was cheap. I didn't. And even if I had, I would have sold it when it tripled and not held it. That probably "cost" me another couple million. I don't care. I would probably make the same decisions over again.

I invested into a blend of stock funds and bonds, instead of investing it all in 3X leveraged SP500 fund, or leveraged futures. This "cost" me basically an unlimited amount.

If you are ticked about getting $850k in stock options, you have a real first-world problem. Besides, you should be more upset you didn't cash them out and buy Amazon and make even more millions than holding them.
Last edited by 28fe6 on Fri Jan 17, 2020 1:45 pm, edited 3 times in total.

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Re: Realized we made a major mistake and feeling really sick.

Post by an_asker » Fri Jan 17, 2020 1:42 pm

cdu7 wrote:
Fri Jan 17, 2020 1:03 pm
My wife recently made us sit down and calculate what our old company stock options would be worth had we never sold any over the years and held them up until now. We had been consistently selling over many years at a regular schedule. In total we have made roughly 850k before taxes on these options. I realized had we not sold anything they would currently be worth 1.8 million (before taxes)........... I feel absolutely sick; I feel as if I just burned up a lottery ticket..... I literally left a million dollars on the table......

How do I get over this feeling of disaster. I never should have done this calculation......
Most (all?) respondents have missed the critical portion of OP (I've bolded it).

OP, what does your wife feel about it? If she says "no big deal" forget about it. If not, she'll make sure you won't forget about it (assuming that you're the one that made the decision to sell over the years). You just gotta roll with the punches, either way... as they say, for better or for worse!

dak
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Re: Realized we made a major mistake and feeling really sick.

Post by dak » Fri Jan 17, 2020 1:43 pm

Is your life ok? Enjoying some successes and good health?

Then you lost nothing.

Retrospective calculations are rarely useful. Since you can't change the past, they only serve to artificially inflate or deflate your happiness.

TheDDC
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Re: Realized we made a major mistake and feeling really sick.

Post by TheDDC » Fri Jan 17, 2020 1:46 pm

cdu7 wrote:
Fri Jan 17, 2020 1:03 pm
My wife recently made us sit down and calculate what our old company stock options would be worth had we never sold any over the years and held them up until now. We had been consistently selling over many years at a regular schedule. In total we have made roughly 850k before taxes on these options. I realized had we not sold anything they would currently be worth 1.8 million (before taxes)........... I feel absolutely sick; I feel as if I just burned up a lottery ticket..... I literally left a million dollars on the table......

How do I get over this feeling of disaster. I never should have done this calculation......
Let's ask a different question: After you cashed out, what else did you invest in instead that lost $1M? Or didn't you invest the $850k at all?

Wouldn't proceeds from an ESPP best be spent on paying off debt first, then being invested back into the market via a brokerage account?

As was mentioned earlier, it's $850k which is a handsome sum to have. Now make another $850k and pile it into VTSAX. There is no time like the present to reverse course. I would also not view it as much of a loss. You were paid in stock which is as good as cash once you sell.

-TheDDC
Last edited by TheDDC on Fri Jan 17, 2020 1:51 pm, edited 2 times in total.
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Re: Realized we made a major mistake and feeling really sick.

Post by Unladen_Swallow » Fri Jan 17, 2020 1:47 pm

OP


You didn't lose money. You made money. Perhaps less than you could have made. But this is no different than someone being 50/50 AA who wants to mitigate the downside, at the cost of tremendous upside. You made a more modest return to avoid a potential severe loss.

I would consider you a winner.

Your outcome does not make your strategy of selling a single stock bad. If you held on and it went to zero, that would have been fine as well. Lesson learned. And if you held on and made a great profit, you would just be very lucky. Not being tremendously lucky is all of our daily lives. No reason to feel blue.
"I think it's much more interesting to live not knowing than to have answers which might be wrong." - Richard Feynman

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Re: Realized we made a major mistake and feeling really sick.

Post by Blister » Fri Jan 17, 2020 1:50 pm

Friend of mine sold is business to a large corporation for $250K in options By the time he could sell them the company was bankrupt. Essentially gave away his company. Now he felt "sick"

water under the bridge my friend
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Re: Realized we made a major mistake and feeling really sick.

Post by knowledge » Fri Jan 17, 2020 1:51 pm

I have a spreadsheet that calculates the money left on the table for options that I exercised. Today, it calculates $2.8m.

It certainly makes me feel dumb, but I let it go. Mostly by reminding myself of what others have said in this thread. No one could have known. And the ones that didn't take their profits too early are the folks that had the wherewithal to let it ride (i.e., they were already wealthy).

That said, if I get another basket of options in the future, I'll let things play out more. This is as much a function of learning a lesson about the extrinsic value of options as it is about being in a stronger financial position.

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Re: Realized we made a major mistake and feeling really sick.

Post by Thegame14 » Fri Jan 17, 2020 1:51 pm

cdu7 wrote:
Fri Jan 17, 2020 1:03 pm
My wife recently made us sit down and calculate what our old company stock options would be worth had we never sold any over the years and held them up until now. We had been consistently selling over many years at a regular schedule. In total we have made roughly 850k before taxes on these options. I realized had we not sold anything they would currently be worth 1.8 million (before taxes)........... I feel absolutely sick; I feel as if I just burned up a lottery ticket..... I literally left a million dollars on the table......

How do I get over this feeling of disaster. I never should have done this calculation......
but how much money did you make from investing the amount you sold in other investments?

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cdu7
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Re: Realized we made a major mistake and feeling really sick.

Post by cdu7 » Fri Jan 17, 2020 1:53 pm

Thegame14 wrote:
Fri Jan 17, 2020 1:51 pm
cdu7 wrote:
Fri Jan 17, 2020 1:03 pm
My wife recently made us sit down and calculate what our old company stock options would be worth had we never sold any over the years and held them up until now. We had been consistently selling over many years at a regular schedule. In total we have made roughly 850k before taxes on these options. I realized had we not sold anything they would currently be worth 1.8 million (before taxes)........... I feel absolutely sick; I feel as if I just burned up a lottery ticket..... I literally left a million dollars on the table......

How do I get over this feeling of disaster. I never should have done this calculation......
but how much money did you make from investing the amount you sold in other investments?
That's very difficult for me to figure that out, likely a lot, but not as much as holding would have made. Again, all the support is helping me feel better.

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Re: Realized we made a major mistake and feeling really sick.

Post by Helo80 » Fri Jan 17, 2020 1:59 pm

cdu7 wrote:
Fri Jan 17, 2020 1:37 pm
It was over a period 6-7 years, the money went into our house, and into investments. It is impossible for me to track where "that money" went exactly, but it wasn't spent. I don't believe my returns over that period in the market were equal to these two companies returns. I know that they outperformed the broader market over the same period (one of them wildly outperformed). If I had just ignored it, I would be richer today than I am, Maybe not by exactly 1 million, but by hundreds of thousands more at a minimum. Everyone is absolutely correct that I made the right decision, I know I made the right decision. But it still hurts to think about. I never should have done this calculation......


If it makes you feel any better, my grandparents were with MSFT back in the beginning as they lived in Washington, watched TV a lot, and even though never owned a computer, knew who Bill Gates was and about Microsoft. They invested some in MSFT stocks but later sold it because it was losing money. I don't know the time frame, but that's how the game goes.

There's no way they or you could have known. The reason this board likes index funds so much is that they give you an average return of the market which is much safer than concentrated positions in multiple or a few companies. There's a reason why stockholders are the last to be paid out in the event of a bankruptcy.

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cdu7
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Re: Realized we made a major mistake and feeling really sick.

Post by cdu7 » Fri Jan 17, 2020 2:01 pm

an_asker wrote:
Fri Jan 17, 2020 1:42 pm
cdu7 wrote:
Fri Jan 17, 2020 1:03 pm
My wife recently made us sit down and calculate what our old company stock options would be worth had we never sold any over the years and held them up until now. We had been consistently selling over many years at a regular schedule. In total we have made roughly 850k before taxes on these options. I realized had we not sold anything they would currently be worth 1.8 million (before taxes)........... I feel absolutely sick; I feel as if I just burned up a lottery ticket..... I literally left a million dollars on the table......

How do I get over this feeling of disaster. I never should have done this calculation......
Most (all?) respondents have missed the critical portion of OP (I've bolded it).

OP, what does your wife feel about it? If she says "no big deal" forget about it. If not, she'll make sure you won't forget about it (assuming that you're the one that made the decision to sell over the years). You just gotta roll with the punches, either way... as they say, for better or for worse!
It is going to create friction, not because of the "lost" gains, which she isn't super upset about exactly (again she agreed to sell at the time, I didn't make these decisions alone), but she is using to argue against my boglehead ways. She wants to invest in more individual stocks and less index funds, I don't know what is triggering this, but she keeps saying how we could have made this or that, she was the one who introduced me to boglehead investing, but then she says we have too much "index" and she feels our portfolio is lagging. I've gone through all these arguments with her, but then she brought this up and made me do this calculation and is using it as evidence to support her view that we would make more money investing in individual stocks, or at least putting more of our portfolio into them. It is a whole different issue that I don't know how to deal with or why it is happening.

MarkerFM
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Re: Realized we made a major mistake and feeling really sick.

Post by MarkerFM » Fri Jan 17, 2020 2:02 pm

I sold my companies to a public company in an all cash deal for the stock. If I had done it for their stock instead, today I would have $78 million more than I do. If I had taken stock and sold it at the peak at the end of 2013, I would have $120 million more. Do I regret this? Of course not. Taking all stock would have been too risky, and I would have sold a bunch the first time it doubled, and then more the second time it doubled, etc. I still made a good chunk of change and net worth has more than doubled since, so all is good.

Corsair
Posts: 377
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Location: WA

Re: Realized we made a major mistake and feeling really sick.

Post by Corsair » Fri Jan 17, 2020 2:02 pm

BogleFanGal wrote:
Fri Jan 17, 2020 1:08 pm
I held onto mine and lost tens of thousands when the company unexpectedly tanked. Was writing that one off for a while. Be grateful and thankful you made so much money...first world problem
Agreed, I would LOVE to have made what OP realized. It’s $800K dollars!
All posts are my own opinions and are not financial advice.

ohai
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Joined: Wed Dec 27, 2017 2:10 pm

Re: Realized we made a major mistake and feeling really sick.

Post by ohai » Fri Jan 17, 2020 2:04 pm

If I had bought UPRO instead of Vanguard 500 when I first started work, I'd be worth like $20 million. So live and learn I guess.

onourway
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Joined: Thu Dec 08, 2016 3:39 pm

Re: Realized we made a major mistake and feeling really sick.

Post by onourway » Fri Jan 17, 2020 2:07 pm

cdu7 wrote:
Fri Jan 17, 2020 2:01 pm
It is going to create friction, not because of the "lost" gains, which she isn't super upset about exactly (again she agreed to sell at the time, I didn't make these decisions alone), but she is using to argue against my boglehead ways. She wants to invest in more individual stocks and less index funds, I don't know what is triggering this, but she keeps saying how we could have made this or that, she was the one who introduced me to boglehead investing, but then she says we have too much "index" and she feels our portfolio is lagging. I've gone through all these arguments with her, but then she brought this up and made me do this calculation and is using it as evidence to support her view that we would make more money investing in individual stocks, or at least putting more of our portfolio into them. It is a whole different issue that I don't know how to deal with or why it is happening.
This result is no 'evidence' at all of how you would make more money in individual stocks. There is a lesson here - I hope you both learn it.

Further, the comparison is absolutely invalid as you are not including the returns on the $850k you still have!

Both you feeling like you made a major mistake here and your wife saying "we could have this or that" is a view you only have because those events are in the past.

Do you and she both understand that knowing which stocks would have made you rich if you invested in them 10 years ago serves no purpose other than to cast a wish upon? You have to know which stocks will be the right ones 10 years from now - a near impossibility.

tsohg
Posts: 64
Joined: Thu Mar 07, 2013 10:30 am

Re: Realized we made a major mistake and feeling really sick.

Post by tsohg » Fri Jan 17, 2020 2:10 pm

You made what you thought to be the best decision given the limited information you had at the time. Don't judge your decision based on outcome, which could definitely have gone the opposite direction.

Take solace in your success and give yourself some grace, you don't have a crystal ball.

Topic Author
cdu7
Posts: 351
Joined: Thu Feb 02, 2017 2:34 pm

Re: Realized we made a major mistake and feeling really sick.

Post by cdu7 » Fri Jan 17, 2020 2:12 pm

onourway wrote:
Fri Jan 17, 2020 2:07 pm
cdu7 wrote:
Fri Jan 17, 2020 2:01 pm
It is going to create friction, not because of the "lost" gains, which she isn't super upset about exactly (again she agreed to sell at the time, I didn't make these decisions alone), but she is using to argue against my boglehead ways. She wants to invest in more individual stocks and less index funds, I don't know what is triggering this, but she keeps saying how we could have made this or that, she was the one who introduced me to boglehead investing, but then she says we have too much "index" and she feels our portfolio is lagging. I've gone through all these arguments with her, but then she brought this up and made me do this calculation and is using it as evidence to support her view that we would make more money investing in individual stocks, or at least putting more of our portfolio into them. It is a whole different issue that I don't know how to deal with or why it is happening.
This result is no 'evidence' at all of how you would make more money in individual stocks. There is a lesson here - I hope you both learn it.

Further, the comparison is absolutely invalid as you are not including the returns on the $850k you still have!

Both you feeling like you made a major mistake here and your wife saying "we could have this or that" is a view you only have because those events are in the past.

Do you and she both understand that knowing which stocks would have made you rich if you invested in them 10 years ago serves no purpose other than to cast a wish upon? You have to know which stocks will be the right ones 10 years from now - a near impossibility.
I’m aware I’ve argued all of this with her before; she isn’t rational about it, I don’t know where it is coming from as until recently she has been content to put all our investment management on me. I know I’ll win in the end since she won’t care enough to take actions aside from bothering me, but in the interim this is creating some friction; I don’t know if this is really about investments or if it is about other marriage issues.

jminv
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Joined: Tue Jan 02, 2018 10:58 pm

Re: Realized we made a major mistake and feeling really sick.

Post by jminv » Fri Jan 17, 2020 2:15 pm

Did your wife also make you sit down and calculate how much you would be worth had you invested the net proceeds from the company stock options sales in the total stock market? Because otherwise it's a meaningless comparison of 1.) company stock versus 2.) no stock. If this was over many years, it's worth doing the comparison.

Is the outcome from this table exercise that you should always hold onto a company's stock position? If you were redoing it now from today you would hold? To carry around some deep seated sense of loss?

Keeping your net worth at the same place you rely on for a job is risky. That's why people recommend diversifying your investments away from your employer. You could lose your job and a lot or all of your net worth at the same time. Concentrated single position is also more risky than a diversified portfolio. There's counter stories of people who lost everything or didn't do very well holding onto company stock and then lost their jobs too.
Last edited by jminv on Fri Jan 17, 2020 2:16 pm, edited 1 time in total.

onourway
Posts: 2495
Joined: Thu Dec 08, 2016 3:39 pm

Re: Realized we made a major mistake and feeling really sick.

Post by onourway » Fri Jan 17, 2020 2:15 pm

cdu7 wrote:
Fri Jan 17, 2020 2:12 pm
I’m aware I’ve argued all of this with her before; she isn’t rational about it, I don’t know where it is coming from as until recently she has been content to put all our investment management on me. I know I’ll win in the end since she won’t care enough to take actions aside from bothering me, but in the interim this is creating some friction; I don’t know if this is really about investments or if it is about other marriage issues.
My wife sometimes makes comments to the same effect - she's a bit of a trend spotter so she thinks she should be buying these companies.

My solution has been to encourage her to invest some of her salary this way - say $10k at first, and see what happens.

So far she hasn't bothered to do it. If she does and she wins, great. If not, it won't have any meaningful impact on our finances.

chevca
Posts: 3473
Joined: Wed Jul 26, 2017 11:22 am

Re: Realized we made a major mistake and feeling really sick.

Post by chevca » Fri Jan 17, 2020 2:17 pm

cdu7 wrote:
Fri Jan 17, 2020 1:03 pm
In total we have made roughly 850k before taxes on these options.
Boy, I really feel for you.....

Some of us have never owned a single stock option, let alone made any money from them. Get some perspective on your 'problems'.

Hikes_With_Dogs
Posts: 295
Joined: Tue Mar 19, 2013 9:50 pm

Re: Realized we made a major mistake and feeling really sick.

Post by Hikes_With_Dogs » Fri Jan 17, 2020 2:17 pm

Imagine how sick you'd feel if you were holding onto Enron....

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gr7070
Posts: 1160
Joined: Fri Oct 28, 2011 10:39 am

Re: Realized we made a major mistake and feeling really sick.

Post by gr7070 » Fri Jan 17, 2020 2:20 pm

Meh. The bright side is obvious.

I know Macromedia employees who lost a million not selling *any* pre dot bomb.

core4portfolio
Posts: 533
Joined: Thu Dec 26, 2013 2:12 pm

Re: Realized we made a major mistake and feeling really sick.

Post by core4portfolio » Fri Jan 17, 2020 2:27 pm

You sold 850K gains and reinvest them or spend it ?
if you reinvested that then it also have some value by now.

I was very happy when my previous company ESPP went up so high when i hold them from 2013 to 2017 and I sold them to get good gains.
Next year i accumulated but company is way behind index. SP500 went up 30% but ESPP is -6%.
Iam waiting for loss to come over to sell on even to move to index.

You followed a strategy to lock gains and still its on positive side.
There is no time clock to go back as everyone like to do. Enjoy the 850k :)
Allocation : 80/20 (80% TSM, 20% TBM) | Need to learn fishing sooner

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