Is equity a valuable asset?


Equity can indeed be a valuable asset, especially when it involves shares in promising startups or successful companies. Here's an insight from experts on this topic:

  • Mani Mahadevan discusses highly appreciated assets, like startup equity, which could start with a low market value but potentially increase significantly. For instance, if you were to invest $10,000 in a startup, and after a few years of development, its value rises to $10 million, you would receive a significant return on your first investment. This kind of asset can become incredibly valuable in estate planning as well by allowing significant value to pass on without estate taxes, as seen in the pre-IPO equity actions of Facebook's founders 1.

  • Carolynn Levy underscores that equity is the most valuable asset for successful companies. Managing and understanding the value and implications of equity from early stages can significantly contribute to a company's long-term success 2.

These discussions highlight that equity, while carrying certain risks, can offer substantial rewards, making it a potentially valuable asset for investment and wealth building.

Valuable Assets

Discover why highly appreciated assets can be so valuable and how leveraging the government's assumed growth rate can help minimize estate taxes and preserve income for future generations.

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