The Moment
$100,000+ in RSUs just hit your brokerage account. This is exciting — and dangerous. At this level, your company stock position may represent 20-40% or more of your net worth. Combined with your salary, bonus, and unvested RSUs, your financial life is overwhelmingly concentrated in one company.
The employees of Enron, Lehman Brothers, and WeWork all had significant RSU positions. When those companies collapsed, they lost their jobs, their bonuses, and their stock simultaneously. Concentration risk is not theoretical.
The Strategy
Sell and diversify — this is the default recommendation.
Ask yourself: "Would I take $100,000 in cash and buy $100,000 of this single stock?" If the honest answer is no (it should be), then sell and invest in a diversified portfolio.
Tax-aware selling: - Shares held under 1 year from vesting: short-term capital gains (ordinary income rate) on any gain above the vesting price - Shares held over 1 year: long-term capital gains (15-20%) on gain above vesting price - If the stock is at or near the vesting price: sell now (minimal tax impact, maximum diversification benefit) - If the stock has appreciated significantly since vesting: consider holding to the 1-year mark for long-term treatment, but monitor the concentration risk
The 10% rule: Never let company stock exceed 10% of your total net worth. If your net worth is $500,000, your company stock (vested + unvested) should stay below $50,000 in vested shares. Sell systematically as new batches vest to maintain this ceiling.
Where to invest the proceeds: Three-fund portfolio in a taxable brokerage: US total market (60%), international stocks (25%), bonds (15%). Use the windfall deployment strategy for the remainder.
Run Your Numbers
Enter your RSU value to see the diversification plan.
$100,000 Windfall Allocator
What to explore next
- →How do I set up a systematic RSU selling schedule?
- →What is the 10b5-1 plan for automated stock sales?
- →How much company stock is too much?
Frequently Asked Questions
My company stock keeps going up — why would I sell?
Past performance does not predict future performance. Even if your company continues to do well, the risk-adjusted return of a diversified portfolio is superior. You are not betting against your company — you are betting on the entire market. Your unvested RSUs and salary already give you plenty of company exposure.
Will selling trigger a huge tax bill?
Tax was already paid at vesting (as W-2 income). Selling at the vesting price triggers zero additional tax. Only gains above the vesting price are taxable as capital gains. If you sell shortly after vesting with minimal price change, the additional tax is close to zero.