December 20, 2025

Happy Saturday, everyone!
Good morning — hopefully you’re reading this a little slower today ☀️

Quick question to kick things off: if someone handed you stock options at work, would you actually know what to do with them?
They sound exciting (and sometimes confusing), and depending on how they’re handled, they can quietly help you build wealth… or quietly work against you.

Today’s post breaks it all down in a simple, no-jargon way so you can understand what you really have — and how to use it wisely.

Let’s make smart money moves, even on a weekend.

— Ryan Rincon, Founder at The Wealth Wagon Inc.

— Ray Dalio

Market Update: Markets rallied across the board today, with all three major indices closing in the green. The Nasdaq surged 1.31%, the S&P 500 gained 0.88%, and the Dow Jones added 0.38%, signaling broad investor confidence to kick off the session. Bitcoin also joined the upside momentum, jumping 3.30% as risk appetite improved in both equities and crypto.

Commodities held steady, with Gold ticking up 0.096% while Silver climbed a stronger 3.34%, continuing its recent momentum streak. In individual movers, Costco dipped 0.23% after its recent run-up, and Disney slid 0.56%, extending a cautious pullback. The standout of the day was CoreWeave, soaring 22.64%, reflecting heightened enthusiasm around infrastructure and AI-related plays.

Investors are taking a more skeptical view of November’s inflation figures, worried that the numbers may not fully reflect underlying price pressures. Markets opened with hesitation as traders reassessed the likelihood of near-term rate cuts. The tone remains cautious, with many looking for additional data before adjusting expectations.

A creeping rise in unemployment is renewing fears that the U.S. economy may be inching closer to a recession. Analysts note that shifting labor dynamics often precede broader economic slowdowns. Markets reacted with mixed sentiment as investors weighed the warning signs against still-resilient consumer activity.

Interest rates were lowered to 3.75%, offering borrowers modest relief heading into the new year. Policymakers signaled that additional reductions remain on the table as inflation cools. However, officials cautioned that future moves will depend heavily on incoming economic data.

UnitedHealth announced new external reviews aimed at increasing transparency and rebuilding trust among customers and regulators. The move comes amid rising scrutiny across the health-insurance landscape. Markets responded positively to the commitment, viewing it as a step toward operational stability.

Silver surged to a record high, while gold continued its steady climb as traders doubled down on expectations of rate cuts. Safe-haven demand strengthened across global markets. Analysts say precious metals may remain elevated if economic uncertainty persists.

Gold prices softened slightly but maintained a solid weekly gain as trading volumes began to thin. Investors appear content to hold positions heading into the quieter year-end stretch. Rate-cut speculation continues to provide a supportive floor for the metal.

A major court decision reinstated Elon Musk’s long-contested compensation package, reigniting debate over executive pay and board oversight. The ruling marks a significant win for Tesla leadership and may influence corporate governance discussions across the tech sector. Shares saw heightened volatility following the announcement.

Oracle stock jumped after reports surfaced claiming TikTok had signed an agreement to establish a new U.S. joint venture. The development could reshape ongoing regulatory tensions surrounding the platform. Investor enthusiasm surged on expectations of major cloud and data-management opportunities.

Stocks climbed worldwide after Japan raised interest rates, boosting the yen and signaling stronger confidence in its economic recovery. The move marked a rare tightening shift for the country. Global investors largely welcomed the decision, viewing it as a sign of improving fundamentals in Asia.

A lot of people work at companies that offer stock options and never fully understand what they actually own. They hear phrases like “equity,” “vesting,” or “you’ll be rich if we IPO,” but no one ever sits them down and explains how this really works in dollars and cents.

This matters because stock options can either become a life-changing asset or a confusing tax problem that costs you money. The difference usually comes down to understanding a few key mechanics early instead of figuring it out years later.

Let’s walk through it plainly.

When a company gives you stock options, they are not giving you stock. They are giving you the right to buy stock later at a fixed price, called the strike price.

If the company grows and the stock becomes more valuable than your strike price, your option has value. If the company doesn’t grow, your option may be worth nothing.

This is important: options are potential, not ownership, until you exercise them.

Most companies use vesting schedules, usually over four years with a one-year cliff.

This means:

Vesting exists to keep employees around. It is not a bonus for past work; it’s an incentive for future work.

If you leave a company, you usually have a short window (often 90 days) to exercise vested options. Miss that window and they disappear.

There are two common types of stock options.

Incentive Stock Options (ISOs) are usually offered to employees. They can have favorable tax treatment, but only if you follow specific rules.

Non-Qualified Stock Options (NSOs) are often given to contractors or advisors and are taxed more aggressively.

The key difference is when and how taxes are triggered.

With ISOs, exercising doesn’t always create immediate income tax, but it can trigger alternative minimum tax (AMT). With NSOs, exercising usually creates taxable income immediately.

Many people exercise without understanding this and end up with a surprise tax bill on shares they can’t even sell yet.

One of the biggest traps with stock options is thinking unrealized gains are real money.

Example:
You exercise options at $1. The company internally values shares at $10. On paper, you feel like you made $9 per share.

But if the company is private, you can’t sell those shares. You still owe taxes. You still paid cash to exercise. And there’s no guarantee you’ll ever get liquidity.

This is how people end up with:

Paper wealth is not real wealth until liquidity exists.

Most people assume an IPO or acquisition will happen.

Statistically, most companies never reach a liquidity event.

Even if they do:

Your equity might be worth far less than you imagined by the time you can sell.

Exercising early can make sense if:

It does not make sense if:

Equity should be treated like a high-risk investment, not guaranteed compensation.

A healthier way to think about stock options is this:

Never base your financial life on equity working out. Plan as if it goes to zero, and let upside be a bonus.

If you have stock options, do this:

If you’re joining a company, ask these questions before signing:

These questions separate people who benefit from equity from those who simply hope.