At The Money: Getting Paid in Company Stock
At The Money: Getting Paid in Company Stock
At The Money Getting Paid in Company Stock Arrow Right
16:05
Equity-based compensation has become an increasingly popular form of compensation in the United States, especially in Tech and high-growth, VC-funded companies. Joey Fishman is a Senior Advisor at Ritholtz Wealth Management (RWM), where he assists clients with managing their stock, options, and equity compensation. He joins Barry Ritholtz to discuss essential information about earning pay in stock. Each week, 'At the Money' discusses an important topic in money management. From portfolio construction to taxes and cutting down on fees, join Barry Ritholtz to learn the best ways to put your money to work.
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Yahoo
an hour ago
- Yahoo
How to build wealth one rung at a time
Building wealth is not all scrimping and sacrificing while adhering to a steady investing strategy. It's knowing what to do at each step on the ladder of wealth that sets you up for success. Nick Maggiulli, chief operating officer and data scientist at Ritholtz Wealth Management, has a new book, "The Wealth Ladder: Proven Strategies for Every Step of Your Financial Life,' that lays it all out in clear, concise, and actionable steps. Here are edited excerpts of our conversation: Kerry Hannon: How do you define the wealth ladder? Nick Maggiulli: The wealth ladder is a new framework for thinking about building wealth and how you should change your financial strategy over time. Once you see wealth through this lens, you're never going to unsee it. It breaks wealth into six distinct levels based on your net worth. That's all your assets, minus all your liabilities. Level one is less than $10,000 in wealth. Chances are, you are living paycheck to paycheck and conscious of every dollar you spend. Level two is $10,000 to $100,000. That is wealth that lets you buy what you want at the grocery store without worrying about your finances. Level three is $100,000 to $1 million. I call that restaurant freedom because you can order what you want when you dine out. Go for the salmon over the burger. The fourth rung, $1 million to $10 million, opens the door to travel where you want; the fifth, $10 million to $100 million, means you can purchase your dream home with little impact on your overall finances. The sixth and highest level, anything above $100 million, gives you the ability to have a profound impact on the lives of others through business and philanthropy. Level three is the middle class in the United States. The data on this is pretty straightforward — 20% of Americans are in level one; 20% are in level two; 40% are in level three; 18% are in level four, and then the top 2% is level five and above. Read more: How to save $10,000 in a year You write that we should spend not based on our income, but on our wealth. Can you elaborate? Excluding inheritances, trust funds, and lottery winnings, having wealth demonstrates financial discipline. It illustrates that you have control over your spending and that you know how to save money. Without such control, you could end up in a bad place financially. For example, if you consume based solely on your income, any disruption to that income could send your finances into a tailspin. Unfortunately, most people don't realize this until it's too late. The truth is that income can be fickle. One day you're making good money, and the next you're looking for a new job. How is increasing income the bedrock of all financial success? The single best investment idea is the continual purchase of a diverse set of income-producing assets and raising your income level. The strongest correlation in personal finance is income level and savings rate. The higher someone's income is, the higher their savings rate. There are exceptions. Over time, those individuals that have higher incomes today are more likely to end up higher up the wealth ladder in the future because they are saving a lot more than those with lower incomes, and they have more of their wealth and income-producing assets than those lower on the wealth ladder. On average, those in levels one to three have less than 25% of their total assets in income-producing assets. An income-producing asset is something like a stock, a bond, a business, or other types of real estate. When we look at the data, people in levels one and two generally have most of their money in their car and their homes. That's mostly true in level three as well. But by level three, it's more in their home. Four to six is where we see the big shift, where we see more money in retirement accounts, in businesses, in stocks and mutual funds outside of retirement accounts. People who can shift more of their assets into income-producing assets will generally see more wealth appreciation than those who don't. Read more: 5 money-saving apps to help you grow your wealth Climbing the wealth ladder takes years for most people, right? Yes, the median age of a household in level four is 62. Less than 1% of households in level four are under 30. How can your relationships help you build wealth? People should think of their assets more broadly, especially when you're just starting out, because you may have other assets in your life — friends, family, professors — who can help you at least get started and get on the right path, even with a recommendation for a job or an internship. As you make your way up the wealth ladder, you want to help others get up too. Pass it on. Read more: How to save money in 2025: 50 tips to grow your wealth I love this line in your book: 'If you don't do it for the money, you're more likely to make money.' What do you mean? If you're working at something you love, you don't stop when there's an obstacle. If money is the only thing that is making you do something, that's not a deep enough motivator to keep you going. You'll say screw it, and you'll stop. It's staying power. Sign up for the Mind Your Money weekly newsletter By subscribing, you are agreeing to Yahoo's Terms and Privacy Policy What is the biggest contrarian takeaway from the book? That more money isn't always better. This is especially true in levels five and six. There's a lot of downsides to getting more wealth that people don't really think through. I fundamentally believe that is true. There are a lot of people where wealth has actually ruined their lives in a way. And people often think they get to this certain point, and then they'll be happy. And then you get there and then you're, okay, well maybe I just need a little bit more. Very few people I've ever met, or heard, or spoken with have said, I have enough now. What's the deal with your salt and money analogy? Chefs will tell you that salt is not like the other spices because salt doesn't change the flavor of a food. It just makes food taste better. Money and salt are very similar in a lot of ways because salt by itself is not that useful. You would not just eat a plate of salt. That would be very unappetizing. The same is true of money. If you only had money in your life, you had no friends, you didn't have free time, you didn't have your health, you didn't have your mental sanity, your life would be pretty miserable. Money is the great enhancer, like salt is the great enhancer of food. But you need all the other things to be there for the money to actually add value. Kerry Hannon is a Senior Columnist at Yahoo Finance. She is a career and retirement strategist and the author of 14 books, including the forthcoming "Retirement Bites: A Gen X Guide to Securing Your Financial Future," "In Control at 50+: How to Succeed in the New World of Work," and "Never Too Old to Get Rich." Follow her on Bluesky. Sign up for the Mind Your Money newsletter Sign in to access your portfolio
Yahoo
an hour ago
- Yahoo
How to build wealth one rung at a time
Building wealth is not all scrimping and sacrificing while adhering to a steady investing strategy. It's knowing what to do at each step on the ladder of wealth that sets you up for success. Nick Maggiulli, chief operating officer and data scientist at Ritholtz Wealth Management, has a new book, "The Wealth Ladder: Proven Strategies for Every Step of Your Financial Life,' that lays it all out in clear, concise, and actionable steps. Here are edited excerpts of our conversation: Kerry Hannon: How do you define the wealth ladder? Nick Maggiulli: The wealth ladder is a new framework for thinking about building wealth and how you should change your financial strategy over time. Once you see wealth through this lens, you're never going to unsee it. It breaks wealth into six distinct levels based on your net worth. That's all your assets, minus all your liabilities. Level one is less than $10,000 in wealth. Chances are, you are living paycheck to paycheck and conscious of every dollar you spend. Level two is $10,000 to $100,000. That is wealth that lets you buy what you want at the grocery store without worrying about your finances. Level three is $100,000 to $1 million. I call that restaurant freedom because you can order what you want when you dine out. Go for the salmon over the burger. The fourth rung, $1 million to $10 million, opens the door to travel where you want; the fifth, $10 million to $100 million, means you can purchase your dream home with little impact on your overall finances. The sixth and highest level, anything above $100 million, gives you the ability to have a profound impact on the lives of others through business and philanthropy. Level three is the middle class in the United States. The data on this is pretty straightforward — 20% of Americans are in level one; 20% are in level two; 40% are in level three; 18% are in level four, and then the top 2% is level five and above. Read more: How to save $10,000 in a year You write that we should spend not based on our income, but on our wealth. Can you elaborate? Excluding inheritances, trust funds, and lottery winnings, having wealth demonstrates financial discipline. It illustrates that you have control over your spending and that you know how to save money. Without such control, you could end up in a bad place financially. For example, if you consume based solely on your income, any disruption to that income could send your finances into a tailspin. Unfortunately, most people don't realize this until it's too late. The truth is that income can be fickle. One day you're making good money, and the next you're looking for a new job. How is increasing income the bedrock of all financial success? The single best investment idea is the continual purchase of a diverse set of income-producing assets and raising your income level. The strongest correlation in personal finance is income level and savings rate. The higher someone's income is, the higher their savings rate. There are exceptions. Over time, those individuals that have higher incomes today are more likely to end up higher up the wealth ladder in the future because they are saving a lot more than those with lower incomes, and they have more of their wealth and income-producing assets than those lower on the wealth ladder. On average, those in levels one to three have less than 25% of their total assets in income-producing assets. An income-producing asset is something like a stock, a bond, a business, or other types of real estate. When we look at the data, people in levels one and two generally have most of their money in their car and their homes. That's mostly true in level three as well. But by level three, it's more in their home. Four to six is where we see the big shift, where we see more money in retirement accounts, in businesses, in stocks and mutual funds outside of retirement accounts. People who can shift more of their assets into income-producing assets will generally see more wealth appreciation than those who don't. Read more: 5 money-saving apps to help you grow your wealth Climbing the wealth ladder takes years for most people, right? Yes, the median age of a household in level four is 62. Less than 1% of households in level four are under 30. How can your relationships help you build wealth? People should think of their assets more broadly, especially when you're just starting out, because you may have other assets in your life — friends, family, professors — who can help you at least get started and get on the right path, even with a recommendation for a job or an internship. As you make your way up the wealth ladder, you want to help others get up too. Pass it on. Read more: How to save money in 2025: 50 tips to grow your wealth I love this line in your book: 'If you don't do it for the money, you're more likely to make money.' What do you mean? If you're working at something you love, you don't stop when there's an obstacle. If money is the only thing that is making you do something, that's not a deep enough motivator to keep you going. You'll say screw it, and you'll stop. It's staying power. Sign up for the Mind Your Money weekly newsletter By subscribing, you are agreeing to Yahoo's Terms and Privacy Policy What is the biggest contrarian takeaway from the book? That more money isn't always better. This is especially true in levels five and six. There's a lot of downsides to getting more wealth that people don't really think through. I fundamentally believe that is true. There are a lot of people where wealth has actually ruined their lives in a way. And people often think they get to this certain point, and then they'll be happy. And then you get there and then you're, okay, well maybe I just need a little bit more. Very few people I've ever met, or heard, or spoken with have said, I have enough now. What's the deal with your salt and money analogy? Chefs will tell you that salt is not like the other spices because salt doesn't change the flavor of a food. It just makes food taste better. Money and salt are very similar in a lot of ways because salt by itself is not that useful. You would not just eat a plate of salt. That would be very unappetizing. The same is true of money. If you only had money in your life, you had no friends, you didn't have free time, you didn't have your health, you didn't have your mental sanity, your life would be pretty miserable. Money is the great enhancer, like salt is the great enhancer of food. But you need all the other things to be there for the money to actually add value. Kerry Hannon is a Senior Columnist at Yahoo Finance. She is a career and retirement strategist and the author of 14 books, including the forthcoming "Retirement Bites: A Gen X Guide to Securing Your Financial Future," "In Control at 50+: How to Succeed in the New World of Work," and "Never Too Old to Get Rich." Follow her on Bluesky. Sign up for the Mind Your Money newsletter Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Forbes
2 hours ago
- Forbes
UnitedHealth Stock Is Being Dumped By Wall Street—Here's Why
UnitedHealth stock is being offloaded. It just reported billions in profit. Earnings were strong. The story sounded stable. Yet the stock has been sinking. It's trading near multi-year lows, underperforming peers, and reacting poorly to every quarterly release. The market doesn't move like this for nothing. Markets often sniff out risks long before they're made official. The headlines are piling up: government investigations, operational failures, and leadership questions, but the price has already started to discount something deeper. Investors are trained to react to numbers. But when structure breaks, the numbers are often the last to go. This isn't about a soft quarter. The model itself is cracking, and the market sees it. The way UnitedHealth generates earnings, the incentives behind its vertical integration, and the regulatory heat all point to fragility that isn't captured in consensus spreadsheets. The market is whispering what many investors don't want to admit: that something is changing here. And once trust fades, the re-rating isn't temporary. It's structural. UnitedHealth Stock: Big, Profitable, Misunderstood UnitedHealth trades with a market value of about $226 billion, against $400 billion in revenue for 2024, with 2025 revenue expected to reach mid‑$445 billion to $448 billion. Size doesn't really equal a safe company; it often hides the fragility beneath. Most investors can't describe how the business works. They see adjusted EPS. They don't question the mechanics. They assume that anything producing this much cash must be built to last. But what looks durable can rot from the inside. The core of UnitedHealth's engine is vertical integration. Optum decides on care, delivers it, and pays itself. One hand washes the other, all under the same roof. It's efficient when unexamined. But regulators are finally paying attention. When the payer, provider, and data all sit in one unit, it becomes harder to separate health outcomes from billing outcomes. Investors often mistake size for insulation. But complexity cuts both ways. When that model starts to wobble, through government probes, whistleblower claims, or unexplained earnings distortions, it doesn't usually collapse overnight. It slowly leaks. This is what we are witnessing. The price action is the tell. This isn't about sentiment anymore. It's about what the market now knows; the market no longer trusts what it thought it understood. You can see it is undone. Slowly at this point. But it's picking up. UnitedHealth Is In The Crosshairs Of The Regulators The Department of Justice now runs both criminal and civil investigations into UnitedHealth's Medicare Advantage billing, officially confirmed on July 24, 2025. Washington is targeting diagnostic coding and risk adjustment practices tied to higher payouts. A process investigators say may have involved pressure, bonuses, and algorithmic recommendations to staff for certain lucrative diagnoses. At the center is Optum, UnitedHealth's massive care delivery and analytics arm, which assigns diagnoses, delivers services, and influences payer reimbursement. That vertical structure underpinned margin expansion until it became a regulatory vulnerability. Congress and CMS are now eyeing those same incentives for bundled services that may prioritize profit over care. And according to multiple reports, lawmakers are drafting reforms to Medicare Advantage to clamp down on what they see as systemic abuse. This is more than a compliance issue. If enforcement leads to fines or limits on Optum's ability to steer claims, UnitedHealth loses both margin and narrative. The company disclosed a potential settlement cost of $1.6 billion tied specifically to these investigations. For investors, this isn't a question of past performance but future structure. If Washington forces a redesign in how payer, provider, and auditor relationships operate within Optum, valuation multiples change. You won't see regulatory risk on a spreadsheet. It's not in the line items. But it's in every fund manager's head. And the market is already pricing that doubt. Earnings Vs. Trust UnitedHealth keeps beating the numbers. But the market's not cheering anymore, and that should make investors stop to think. Second‑quarter 2025 adjusted EPS came in at $4.08, while GAAP net earnings per share were about $3.74, reflecting a 9‑10% spread. This isn't a one-off. The company has leaned on adjustments for several quarters, removing charges from cyberattacks, restructuring, litigation, and 'normalizing' expense items. Each quarter it gets harder to square the adjusted reality with the actual income statement. Investors have tolerated this because the stock used to respond. Now, even beats fall flat. The post-earnings reaction in July was strong, with headline numbers, and yet shares sank over 4%. It's not the earnings they're questioning. It's the whole premise. When the market no longer trusts the adjustment logic, the premium unwinds. At some point, 'adjusted' starts sounding like wishful thinking. That's a dangerous pivot for a stock that trades on perceived consistency. The issue here is credibility. And when credibility gets questioned in a complex, vertically integrated healthcare giant with active DOJ probes and massive opacity in its internal operations, the path forward narrows quickly. UnitedHealth's numbers still impress. But the market is no longer listening to the numbers alone. It's watching what they're trying to cover. Optum: The Black Box That Powered Growth At UnitedHealth For years, Optum was UnitedHealth's crown jewel. It gave the company vertical integration that most healthcare giants could only dream of. Run the insurer. Own the doctor's office. Control the pharmacy benefit manager. Route the claims. Capture every step of the dollar. Investors praised it as genius. Until now. Optum was built for margin expansion. By combining payer and provider, UnitedHealth collapsed the value chain into itself. But that same structure is now drawing fire. Regulators are asking whether a company can truly manage care outcomes and approve and profit from the services being recommended. This questions their entire integration strategy. What used to be pitched as 'scale and efficiency' now looks like opacity. Good luck getting through an Optum report without needing aspirin halfway. It's all intentional. In a market that once rewarded complexity, investors are shifting toward simplicity and transparency. Optum is the opposite. Here's the rub: the more essential Optum is to UnitedHealth's story, the more exposed the company becomes to scrutiny. Break the chain or just shake investor faith in it and the premium vanishes. Optum was once the crown jewel. Now it's the bullseye. The Cyberattack Was A Wake-Up Call At UnitedHealth When Change Healthcare, an Optum subsidiary, was hit by a massive ransomware attack earlier this year, most investors treated it as a one-off disruption. It wasn't. It was a systemic failure that revealed how fragile UnitedHealth's infrastructure had become and how slow its leadership was to respond. The breach paralyzed billing and claims systems for weeks across the U.S. healthcare network. Providers couldn't get paid. Pharmacies stalled. Patients were caught in the middle. For a company that sells itself on reliability and integration, the collapse of a core system fully exposed them to operational risk. But the real damage was reputational. CEO Andrew Witty's delayed response and lack of transparency during the fallout shook investor confidence. For a business model that depends on centralized control, a failure of this scale felt like the opposite of control. The market didn't punish the stock immediately, but the tone shifted. Since the hack, UnitedHealth stock has lagged peers, failed to respond to buybacks, and sold off post-earnings despite beats, indicating trust erosion. In healthcare, operational execution is the product. And the cyberattack told the market what the earnings couldn't: UnitedHealth may be bigger than ever, but its foundation isn't as solid as the numbers suggest. Defensive Stocks Are No Longer Safe Havens Investors once treated UnitedHealth like a bond proxy. It was dependable, defensive, and cash-rich, perfect in a zero-rate world, but the world has moved on. And the assumptions that supported its premium are unraveling with it. But investors have moved on. Higher rates change everything. Safety no longer commands a valuation premium. If anything, it draws sharper scrutiny. Now, capital seeks efficiency and flexibility. It rotates out of perceived stability the moment cracks appear. That's exactly what's happening with UnitedHealth. It's mainly about multiples. Stocks like UnitedHealth were priced on the assumption that growth would stay steady, margins wouldn't come under pressure, and regulators would remain passive. That's no longer the case. Every part of the thesis, from Medicare Advantage economics to Optum's integration, is under review. And the old multiple doesn't hold under new conditions. At 9 to 10 times forward earnings, UnitedHealth stock is still priced for control. But what happens if growth slows, scrutiny increases, and earnings quality erodes? That multiple doesn't hold when earnings wobble and faith erodes. And that's what we're starting to see. The idea that defensive means safe no longer applies. In a world where capital costs more and scrutiny cuts deeper, structural risk matters more than past predictability. And UnitedHealth is showing investors what happens when they confuse size for safety. Market Behavior Is Telling
