Most tech employees are proud of where they work. You’re solving big problems, innovating, and believe in the vision. That’s a good thing.
But here’s a harsh reality: Loyalty doesn’t prevent stock price collapses.
There are countless reasons a company’s stock can tank overnight:
 

• A disruptive new competitor (e.g. Deepseek)

• Fraud or accounting scandals

• Regulatory changes

• Macroeconomic shocks

• Losing a key leader (imagine Tesla without Elon Musk)

If any of these events would severely impact your financial plan, it’s time to start
diversifying.

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Selling Doesn’t Mean You’re Making a Mistake

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One of the biggest fears tech employees have? What if I sell, and the stock goes up?

Here’s the truth: Selling is not a bet against your company. It’s a bet on your financial security. When it comes to your financial security, you must be selfish

Even the best investors don’t time markets perfectly. What matters is protecting the wealth you’ve built.

Having a clear plan means avoiding emotional decisions.

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You Don’t Have to Sell Everything at Once

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A common misconception: If I sell, I have to dump everything. Not true.
There are structured approaches:

​​​​

• Gradual selling (e.g., 10-20% at a time)
   

• Using market upswings to trim your position
   

• Setting a hard cap on how much of your net worth is tied to company stock
   

• Use tax smart strategies to reduce the impact of the capital gains tax.

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It’s easy to say, “I’ll sell if it starts to drop.” But crashes happen fast. By the time panic sets in, it’s often too late.​​​

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Taxes: The Excuse That Could Cost You More

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Some employees avoid selling because of capital gains tax. And yes, tax matters. 

 

But here’s a simple reality: Losing 70% of your investment is much worse than paying tax on a gain.

For example:
 

• You have $1M in company stock with a cost basis of $300K average.

• Selling today means a significant tax bill.

• But if the stock drops 70%, you just lost $700K.

The goal is to optimize your tax situation—not let tax concerns paralyze you into
inaction.

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Another Way to Diversify: Invest More (Just Not in Your Company)

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Selling isn’t the only way to dilute risk. You can also grow your investments outside of your company stock.
If your employer’s stock makes up 50% of your portfolio, investing aggressively in other assets can help reduce concentration over time.

 

But here’s a simple reality: Losing 70% of your investment is much worse than paying tax on a gain.
 

The Bottom Line

 

Concentration builds wealth, but it can also destroy it. Diversification isn’t about doubting your company—it’s about protecting your future.

Take a step back and ask:
 

•  How much of my net worth is tied to my employer?

• If the stock price drops 50% tomorrow, will my financial plan still hold?

• Am I holding due to logic—or emotion?

The best financial plans aren’t built on hope. They’re built on data, risk management,
and long-term thinking.

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On a personal note:
1- My 4 years old son is now joining my daughter in her money date. He colors Ninja Turtles and get 50 cents.

2- My Podcast is coming to life on my Birthday, I want to make it memorable. I have a great production team working with me. This podcast will deliver practical, no-nonsense financial strategies tailored for high-earning professionals in the tech industry.

3- I am still re-reading Atomic Habits, trying to carve the time and I have a big list of books I want to read this year.

4- Business is doing well, and I am still trying to draw the line between work and family. My son is going to school next year and I want to spend more time with him. I think I will miss his preschool character (I hate how schools mold our children).

5- Travel plans for 2025 are coming to life and the whole family is excited. 

 

I hope you found this Wealth Byte beneficial. I’m Mo Shouman, a financial adviser with 20 years of experience helping professionals save on tax and grow their wealth. Book your financial clarity meeting below and discover how you can take your finances to the next level. I’m proud to be the only adviser who provides a detailed assessment of your financial position—whether you decide to work with me or not!