The cost of bad advice

At Secfi, we’re in the business of helping startup folks with financial advisory services and financial products. We build tools so startup employees can better plan around their equity. Those are completely free to use. If people want more in-depth help, they can work with one of our advisors.

Over the years of building this thing, we’ve seen some horrible financial decisions made by individuals and/or their advisors. I don’t judge financial decisions by their outcome - sometimes things just don’t work out for various reasons. But when I mean bad financial decisions, I mean obviously stupid ones that either take on no risk or take on too little risk for a person’s situation.

Both can be incredibly costly.

For example, a startup employee who doesn’t exercise early when the cost is low and can afford it in their financial plan will likely be left with much less in their pockets after exit due to taxes.

On the flip side, a startup employee who exercises by leveraging his home and taking recourse loans is likely overextending. It may work out, but if it doesn’t, this individual risks his entire livelihood.

The cost of this bad advice or bad decision can come back to haunt you years down the road. We’ve unfortunately seen a lot of this over the years. It may seem expensive today to get good sound advice, but at the end of the day it likely pales in comparison to the cost down the road.