My wife and I have 90% of our savings in stock. Need help to figure if we need to liquidate/diversify these funds

Intel veerappan
Aug 31 31 Comments

My wife and I bith work in tech and have about 150k in vested stock (of the companies we work at) and only about 15k in cash.

I still have a 300k mortgage on my home. With multiple channels indicating a relatively higher probability of recession in the near future, is it still wise to keep savings in stock or liquidate them and use a portion of it towards mortgage and diversify the rest?

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TOP 31 Comments
  • Facebook :^
    Don't try to time the market.
    Aug 31 6
    • Apple mr.schrute
      I have the same question. How do I do this? I’ve no idea how to do this with 100K in my E*TRADE account and about 150K in my bank account
      Aug 31
    • Intel veerappan
      OP
      Agreed. Useful advice. Any etf you’d recommend for a novice?
      Aug 31
    • Black Knight Financial databud
      VTSAX and check out /r/financialindependence
      Aug 31
    • Jane Street Capital JBoC63
      Gradually move your investments into a low fee mutual fund or etf that closely tracks the s&p. This strategy was popularized by warren buffet for a reason
      Sep 1
    • Stripe BlLL GATES
      And there is no novice or expert, just put the money in the account and ignore it for 30 years
      Sep 1
  • New / Eng bytec
    One of the number one rules of investing is to diversify. If you want quality advice, get a financial advisor. At the very least, go on over to reddit.com/r/personalfinance and read through the wiki and/or ask on there.
    Aug 31 0
  • Goldman Sachs / Data mksd
    Three basic rules for being financially stable:

    1. Always have at least 6 months to 12 months of expenses in bank marked for emergency uses only.

    2. Always spend after you have paid yourself first (put money towards your investments with every pay cheque)

    3. Diversify your investments and don't put all your eggs in one basket

    At your stage, I would first start by building my emergency fund.
    Sep 1 1
    • Intel veerappan
      OP
      Thanks foot the advice.

      For now I have less in hand because I’d be getting a joining bonus when job switching in the next month.

      All good points. Thanks for the advice.
      Sep 1
  • New Gned33
    That calamity that will wipe out your stock value might also wipe out your job.

    First thing Tuesday put in a sell order.

    Today change your 401k contributions so that 15 percent is going toward retirement.

    After you sell the stock and put away extra for taxes, and fund a college fund, absolutely pay down your mortgage.

    TC 670K (ytd)
    Net worth 2.5M
    Sep 1 2
    • Intel veerappan
      OP
      You are rich! ;)
      Thank you. I do have 401l savings. Looking for a college fund and evaluating 529 for it
      Sep 1
    • New Gned33
      You are welcome. I am rich in a developing country not California.

      And they reason I am is that I always sold RSUs when I vested. And before the era of RSUs I always sold when I exercised.

      In the stock option era the right strategy was to exercise and sell 2 percent of holdings each month.

      I .
      Sep 2
  • Microsoft Xi JinPing
    We have around 6x that in rsu in 2 companies...

    I know we should diversify, but a part of me is curious what would happen if we keep them for 10 years.. 20 years...
    Aug 31 2
    • Oracle
      not_larry

      Oracle

      PRE
      Amazon
      not_larrymore
      Would you buy the shares of the same companies if you had equivalent amount of cash?
      Aug 31
    • Microsoft Xi JinPing
      Probably not, that’s insane.
      Sep 1
  • Intel veerappan
    OP
    Some say buying gold instead of investing in the market is one of the ways to be immune to market downfall. Thoughts?
    Aug 31 1
    • SoFi pingus
      I would stay away from gold, or only invest a small portion of it. If the market goes down, just don't sell. It's only a loss if you sell at the bottom. I would keep it in stocks unless you plan on retiring or need the cash in the next 5-10 years. In the long term, stocks should recover.
      Aug 31
  • Facebook / Eng QGhE38
    Diversify it first no matter what. You have so much more unvested stock, why invest more on the same stock with your vested stocks?
    Aug 31 2
    • Intel veerappan
      OP
      I’m guessing ‘no matter what’ implies not waiting for the stock to reach a certain price to sell.

      Alright, thanks. Good points.
      Aug 31
    • Facebook / Eng QGhE38
      ^ I’m just saying diversifying is the first thing you do. This is probably the right move. At least don’t put all eggs in one basket.

      Whether you want to sell for cash at certain price is another story that I can not give advise. Everyone views the market differently.
      Aug 31
  • Oracle
    not_larry

    Oracle

    PRE
    Amazon
    not_larrymore
    I’d sell all of it and keep it in cash. You will have around 100k after taxes?
    Aug 31 3
    • Intel veerappan
      OP
      That sounds close. About 120k after tax
      Aug 31
    • Oracle
      not_larry

      Oracle

      PRE
      Amazon
      not_larrymore
      Do you have kids
      Aug 31
    • Intel veerappan
      OP
      Yes, I have kids
      Aug 31
  • Google / Eng doWM82
    Sell at $50 intc and buy a rental property or move to newhome and rent existing one.
    Sep 1 1
    • Intel veerappan
      OP
      Thanks for the advice
      Sep 1
  • Lyft !lyft
    Yes. Diversify your stocks. If you don't know much about diversification then just pick a ETF such as voog or similar and put your money there.

    Also yes, have some cash on you. Often people use 3-6 months worth your monthly expenses.
    Sep 1 1
    • Intel veerappan
      OP
      Ok. Will look up etfs
      Sep 1
  • Cisco Infensus
    Betterment
    Aug 31 1