My wife and I have 90% of our savings in stock. Need help to figure if we need to liquidate/diversify these funds
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?
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.
Diversify it first no matter what. You have so much more unvested stock, why invest more on the same stock with your vested stocks?
I’m guessing ‘no matter what’ implies not waiting for the stock to reach a certain price to sell. Alright, thanks. Good points.
^ 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.
I’d sell all of it and keep it in cash. You will have around 100k after taxes?
Some say buying gold instead of investing in the market is one of the ways to be immune to market downfall. Thoughts?
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.
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...
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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.
Ok. Will look up etfs
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.
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.
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
You are rich! ;) Thank you. I do have 401l savings. Looking for a college fund and evaluating 529 for it
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 .
Don't try to time the market.
Thst said, having your net worth invested in the company you work for is a lot of risk. Spread it out in a well diversified ETF to sleep better at night.
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