Many individuals come to me with large positions in their employer stock because they don’t know what to do. Everyone’s situation is different and what you do with your stock is specific to your situation, but here are some things to consider.
Large Stock Position Considerations
There’s a list of questions to go through to calibrate your stock ownership, what it means, and what you can do with it. You may not know all of the answers, and that’s ok. Let’s start the exploration.
- How much of your employer stock makes up your net worth?
- Ten percent, 90%, or some other number?
- Where does your stock ownership fit in with your overall financial situation and strategy?
- In what type of account do you own the employer stock?
- If you do sell a large position of company shares in a taxable account, do you put enough money aside for capital gains taxes?
- How does your stock ownership support your cash flow needs throughout the year?
- What realistic outcome do you expect with your company ownership?
Taking Risk Off to Make Gains
When you sell your employer stock, you may think that you are missing out on some upside. You may be if the shares continue to increase, but there’s no way to know that will happen.
By selling off some shares, you can add a lot more flexibility to your life. Because you put some cash in your pocket, you can focus on other areas of your life – family, hobbies, reduce your stress, and potentially change jobs to a more ideal environment. When managed properly, you can really impact your life in a very positive way.
It’s all within your power and you can achieve great things. How are you thinking about the ownership of your company shares? If you would like to continue the review of your employer stock, we can set up some time.