In 2015 Brian Aggrey could not afford both his rent and the taxes on his SpaceX stock options. His roommate fronted him $200. This year the company’s June IPO, the largest ever, valued it at $2.1 trillion, and Aggrey and his wife, Phoebe Novack, both 35, quit their jobs and left the country.
They are calling it their “Year of Freak.” Milan and the Côte d’Azur in July; a month in Fontainebleau, where Novack trained 35 hours a week at an acting conservatory and put on Chekhov; paragliding in Chamonix; the Italian Grand Prix and the Venice Biennale; Paris now; Mexico City this fall, where Aggrey will study sculpture and the city’s water crisis with the artist Brian Thoreen. Budget: $25,000 a month, for 365 days. End date, written down: July 31, 2027.
The part that is a planning story
The Journal’s Alina Cohen, who was at college with Novack, gets the detail that matters. The couple had always been about structure and saving — roommates in Los Angeles so Aggrey could buy as much stock as possible, twice-yearly retreats to plot their finances. And when the windfall came, they did not simply start spending it. “To fund their year of exploration, the pair sold enough shares to feel insulated from the volatility of SpaceX stock, but the majority of their stake remains in the market.” Aggrey: “The IPO really gave us the confidence to treat that stake as real capital.”
That sentence is the whole discipline. A concentrated position in your employer is not capital while you cannot sell it and while you have not decided what it is for. The IPO answered the first question. The couple answered the second before booking a single flight: a fixed monthly number, a fixed end date, and a sale sized to cover the whole year so that nothing about the trip depends on where the stock goes next.
Which is fortunate. SpaceX (SPCX) closed Friday at $152.71, down 1.36% on the day and roughly a third below its $225.64 high. It was the third most active stock on the exchange. Some of the couple’s peers, the story notes, are considering retiring outright and buying second homes on the strength of the same shares.
Our read
Windfalls are where this desk sees the most avoidable damage, and the damage almost never comes from spending too much. It comes from spending while still exposed: the trip that assumed the stock would hold, the house bought against shares that fell a third before closing. The Aggrey-Novack version is the template. Sell enough to fund the plan in full. Give the plan an end date, because an open-ended sabbatical is a job search that has not started. Then let the rest ride or diversify it, but stop needing it.
The one thing we would add is on the tax line, because it is the line that surprised Aggrey once already. Options exercised and shares sold in the same year as a resignation can stack ordinary income, capital gains and a state tax bill into a single April, and the Tax Report in this same edition explains how the safe-harbor rules keep that from turning into a penalty. A $25,000 month is a fine number. It is a better one with the estimated payments already made.