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Also, if you like the long-term prospects of your company and aren't planning on leaving soon, don't be too quick to exercise those options once they vest. Options are often valid for a long time (10 years is typical) and you could end up with a lot more money down the road. Of course, there is opportunity cost risk in that approach, but I find that more appealing than the very real risk of stock depreciation if you exercise and hold.


I know many people retired from the company for which I worked (I also have now retired), people who retired from jobs as factory workers or clerical/secretarial positions, retired as millionaires because they just held their options until close to the end of the 10 years they had to exercise, and then did a buy-hold.

As the first post said, one does have to face the risk of the stock's falling in value --- either by waiting out the period before exercising, OR by buying and holding for the long term --- but that's no different from any other long term buy-hold strategy for building wealth with stocks. Stock options from one's own company are great because (if you think it's a good company with good long-term prospects) those options are better than the best long term calls (LEAPs) you can buy on the open market; and they're free!

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