Podcast Episode 10: How Much Company Stock Is Too Much? The Hidden Risk in Your RSU Portfolio

This is the full transcript of Fireweed Capital Episode 10. Listen on Spotify, Buzzsprout, or use the player above.

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The Hidden Risk in Your Portfolio

Here's a question that keeps me up at night... and it should probably keep you up too. What percentage of your total wealth is tied to your employer's stock price?

If you're like most tech professionals I talk to, the answer is probably somewhere between 40 and 60 percent. And here's the scary part... most folks don't even realize it.

Welcome to Fireweed Capital — wealth planning for tech professionals. I'm Dr. Adam Link, and today we're diving into one of the most dangerous blind spots in tech wealth building: concentration risk in company stock.

Look, I get it. Your company's been on a tear. Your RSUs have been the best performing asset in your portfolio. You've watched colleagues at other companies get rich holding their stock through IPOs and acquisitions. The temptation is to just... let it ride.

But here's what I've learned from 15 years in this industry, and from watching three different companies go from startup to exit... concentration risk is the silent killer of tech wealth. It's the single point of failure that can turn a multi-million dollar portfolio into a financial disaster overnight.

And the crazy thing? Most people don't even know they have concentration risk until it's too late.

Think about it this way... if you're a software engineer, you'd never build a system with a single point of failure, right? You'd have redundancy, failovers, disaster recovery plans. But when it comes to your personal wealth, most tech professionals are running their entire financial system on a single server... their employer's stock.

Now, I'm not saying company stock is bad. Far from it. RSUs and stock options are one of the biggest advantages of working in tech. The issue isn't the stock itself... it's the concentration.

So today, we're gonna break this down into three parts. First, I'll show you the hidden math of concentration risk... and why even smart, analytical people consistently underestimate it. We'll look at some real-world scenarios that might sound familiar. And I'll walk you through a simple framework for calculating your actual exposure.

Then we'll talk about the triggers. What are the specific warning signs that should make you start diversifying? It's not just about percentages... there are some nuanced factors that most financial advisors completely miss. Things like vesting schedules, lock-up periods, and how your company's correlation with the broader market affects your risk profile.

And finally, we'll get tactical. I'll walk you through the practical strategies for reducing concentration risk while managing the tax implications. Because here's the thing... the biggest barrier to diversification isn't emotional... it's the tax bill. Nobody wants to pay a massive capital gains tax just to reduce risk.

Now, before we dive in, let me be clear about something. This isn't a blanket argument against holding company stock. If you're early at a startup with huge upside potential, concentrated positions can make sense. The key is being intentional about it.

The problem I see is accidental concentration. People who never made a conscious decision to bet 50% of their net worth on their employer... but that's exactly what they've done. They just let their RSUs vest quarter after quarter, reinvested their bonuses in ESPP, and suddenly their entire financial future is tied to one company's stock price.

And look, this applies whether you're at Meta or Google or some Series B startup you've never heard of. Company-specific risk is company-specific risk. Even the most stable tech giants are one product misstep, one regulatory change, one competitive threat away from a major stock price correction.

Remember Intel? Used to be the undisputed king of semiconductors. Or how about Yahoo? Once worth more than Disney. Or more recently, look at what happened to Meta's stock in 2022... down 64% in a single year. If that was 60% of your portfolio, that's not a correction... that's a catastrophe.

And here's the double whammy... we're not just talking about your job here. We're talking about your job AND your wealth being tied to the same company. That's what I call the double jeopardy of tech compensation. If something happens to the company, you lose your income and your investment portfolio takes a massive hit at the exact same time. Right when you need your savings the most.

So if you've ever looked at your portfolio and wondered whether you're taking too much risk with company stock... or if you've been meaning to diversify but keep putting it off because of taxes... or if you're not even sure how concentrated you actually are... this episode is for you.

We'll cover the math, the psychology, and most importantly, the action steps. By the end of this, you'll know exactly how to evaluate your own concentration risk and have a concrete plan for managing it.

And hey, if you find this helpful, share it with a colleague who might be in the same boat. Most tech professionals are dealing with this exact same issue, but nobody talks about it openly. There's this weird culture in tech where holding massive amounts of company stock is seen as loyalty or confidence... when really, it's just uncompensated risk.

Subscribe to the show if you haven't already, and visit fireweedcapital.com for show notes and the full transcript.

Alright, let's start with the math. Because once you see the numbers, you'll understand why concentration risk is such a big deal...

The Hidden Math of Concentration Risk

So let's start with the math, because most people dramatically underestimate how much concentration risk they actually have.

Here's a scenario that's probably gonna sound familiar. Consider someone who works at a major tech company... let's call her Sarah. She's been there for three years, she's got about $200K in her 401k, maybe $100K in taxable investments, and then she's got about $800K worth of company stock between vested RSUs and her ESPP.

Now, if you ask Sarah what percentage of her portfolio is in company stock, she might say something like 70 or 75 percent. That's already pretty concentrated, right? But here's where it gets tricky...

That calculation completely ignores her human capital. See, Sarah's job is worth probably $2-3 million in present value over the next 10-15 years. And that income stream is 100% correlated with her company's performance. If the company struggles, not only does her stock portfolio take a hit... her future earnings are at risk too.

When you factor in human capital, Sarah's true concentration might be closer to 85 or 90 percent. That's not a stock portfolio... that's essentially a single-stock bet with her entire financial future.

And here's the part that really gets me... Sarah is incredibly smart. She's got a computer science degree from Stanford. She can debug complex distributed systems. She understands probability and statistics. But when it comes to her own portfolio, she's making the same cognitive errors as everyone else.

This is what behavioral economists call the "familiarity bias." We overweight investments in things we know well... and what do you know better than your own company? You see the product roadmap, you know the team, you understand the technology. It feels less risky because it feels familiar.

But familiarity doesn't reduce risk. If anything, it can increase it... because you might have insider knowledge that makes you overly confident in the company's prospects. You think you can time the market on your own stock better than you actually can.

And there's another psychological trap here... what researchers call the "endowment effect." Once you own something, you value it more highly than you would if you didn't own it. So those RSUs that vested over the last few years? You don't see them as "just another investment decision." You see them as YOUR stock... something you earned... something you deserve to hold.

But the market doesn't care how you got the stock. A share of Google is worth exactly the same whether you bought it on the open market or received it as compensation. The endowment effect tricks us into holding concentrated positions longer than we should.

Now let's talk about the actual math of concentration risk. There's this concept in portfolio theory called "idiosyncratic risk"... that's just a fancy way of saying company-specific risk that can't be diversified away within that single stock.

Even if you work at the most stable tech company in the world, that stock is gonna have higher volatility than a diversified portfolio. And volatility compounds in ways that really hurt your long-term returns.

Here's a simple example. Let's say you have two portfolios, both with an average annual return of 10%. Portfolio A is a diversified index with 15% volatility. Portfolio B is a single stock with 30% volatility.

Over 30 years, assuming the same average return, the diversified portfolio compounds to about 17 times your initial investment. The single stock? Only about 13 times. Same average return, but the higher volatility creates what we call "volatility drag."

That's a 30% difference in final outcomes... just from volatility. And remember, we're assuming the single stock actually delivers the same average return as the diversified portfolio. Which, statistically, it probably won't.

Here's a sobering statistic: research by Professor Hendrik Bessembinder at Arizona State found that about 40% of individual stocks underperform Treasury bills over their lifetime. Yeah, you heard that right. Two out of five stocks don't even beat risk-free bonds.

And among the stocks that do outperform Treasuries, the vast majority of market gains come from just a small percentage of companies. We're talking about maybe 4% of companies driving most of the stock market's long-term returns.

Now, I'm not trying to be doom and gloom here. Tech stocks as a category have outperformed the broader market over the last decade. But that doesn't mean YOUR tech stock will outperform. There's a big difference between the tech sector and any individual tech company.

Look at what happened to some former tech darlings. Remember Cisco in 2000? Trading at $82 per share. Today, 26 years later? It's around $50. That's a negative return for over two decades. Or Intel... used to be the undisputed king of semiconductors. Down about 50% from its peak in 2000.

And here's where the math gets really interesting. Let's say you decide you want to limit your company stock to no more than 20% of your total portfolio. Sounds reasonable, right?

But now you need to figure out what that actually means in practice. If you're getting $100K in RSUs every year, and you want to maintain a 20% allocation, you need to sell about $80K worth of stock each year just to maintain that target.

Why? Because if you don't sell, and if your company stock appreciates at all, it's gonna keep growing as a percentage of your portfolio. Let's say your total portfolio is $500K, and you want to keep company stock at 20%, so that's $100K. If that stock appreciates by 20% in a year, now it's worth $120K... which is 24% of your portfolio. You need to rebalance.

For most people, that means selling stock almost immediately after it vests. Which triggers ordinary income tax rates on the gains... which can be brutal if you're already in a high tax bracket.

So you're faced with this choice: take the tax hit to diversify, or accept higher concentration risk to avoid taxes. Most people choose the latter... and that's how you end up with 60% of your wealth in company stock without ever making a conscious decision to get there.

This is what I call the "tax trap." The very structure of RSU compensation creates a bias toward concentration because diversification is expensive from a tax perspective.

But here's the thing... and this is really important... the tax cost of diversification is typically much smaller than the risk cost of concentration. When you run the numbers, the expected value of diversifying is almost always positive, even after taxes.

Let me give you a concrete example. Consider someone with $500K in company stock that's appreciated significantly. They're looking at maybe a $150K tax bill to fully diversify. That sounds like a lot, right?

But if that company stock represents 60% of their portfolio, they're taking enormous uncompensated risk. The expected cost of that concentration risk over 10-15 years... meaning the expected difference in outcomes between a concentrated and diversified portfolio... is probably much higher than $150K. It's just that the concentration risk is uncertain and future, while the tax bill is certain and immediate.

Our brains are wired to weigh immediate, certain costs much more heavily than future, uncertain costs. So we avoid the tax bill and accept the concentration risk... even when the math clearly favors diversification.

And here's another way to think about it... that concentration risk isn't just about lower expected returns. It's about the range of possible outcomes. A diversified portfolio might return anywhere from 6% to 12% annually over long periods. A concentrated position might return anywhere from -50% to +200% in a single year.

That wider range of outcomes makes it much harder to plan for things like retirement, kids' college, buying a house. You can't reliably plan around a portfolio that might double or get cut in half in any given year.

Now, I'm not saying you should always diversify immediately. There are definitely cases where it makes sense to hold concentrated positions for a while. Early-stage startups with huge upside potential, for example. Or if you have specific insights about your company's prospects that you believe the market is missing.

But the key is being intentional about it... understanding the real risks you're taking, quantifying your concentration, and having a plan for reducing it over time.

And that brings us to our next section... the specific triggers that should make you seriously consider diversifying...

When Concentration Becomes Dangerous: The Warning Signs

Alright, so now that we understand the math, let's talk about the specific triggers... the warning signs that should make you seriously consider diversifying.

Now, most financial advisors will give you some arbitrary percentage... like "never hold more than 5% or 10% in a single stock." But that's overly simplistic for tech professionals. The reality is, concentration limits depend on your specific situation.

If you're 25 years old with 40 years until retirement, you can probably handle more concentration risk than someone who's 45 with kids approaching college age. And if you're at an early-stage startup with massive upside potential, the risk-return math is different than if you're at a mature public company.

So instead of arbitrary percentages, let me give you a framework for thinking about when concentration becomes dangerous.

The first trigger is what I call the "life-changing money" threshold. This is the point where your company stock position is large enough that losing 50% of it would materially impact your life plans.

For most people, this happens somewhere between $500K and $1 million in company stock. At that level, a 50% decline isn't just a portfolio loss... it's potentially delaying retirement, changing where your kids go to college, affecting when you can buy a house.

Once you hit this threshold, every additional dollar of concentration is what economists call "negative expected utility." The potential downside starts to outweigh the potential upside, even if the expected return is positive.

Here's a way to think about it... imagine you're at a casino, and someone offers you a bet where you have a 70% chance of winning $100 and a 30% chance of losing $100. That's a positive expected value bet... you should take it, right?

Now imagine the same odds, but the stakes are 50% of your net worth. Even though the expected value is positive, most rational people wouldn't take that bet. The utility of losing half your wealth is much greater than the utility of gaining that same amount.

That's what high concentrations in company stock look like. Even if your company is likely to do well, the asymmetric downside risk makes it a bad bet from a utility perspective.

The second trigger is what I call "correlation creep." This is when your company becomes more correlated with the broader market, which reduces the diversification benefit of holding other stocks.

Back in the early 2000s, a lot of tech stocks moved independently of the S&P 500. But today? Most large-cap tech stocks are essentially the S&P 500. Apple, Microsoft, Amazon, Google, Meta... they make up such a large percentage of major indexes that their performance IS the market's performance.

So if you work at one of these companies and you also own index funds, you're not as diversified as you think. Your company stock and your "diversified" index fund are moving in the same direction most of the time.

You can measure this by looking at the correlation coefficient between your company stock and the S&P 500 over rolling 12-month periods. If that correlation is consistently above 0.7 or 0.8, you're not getting much diversification benefit from holding both.

The third trigger is vesting acceleration. This is when you have a large amount of stock that's gonna vest over a short period... maybe because you're approaching an IPO, or you've got a bunch of grants from different years that are vesting around the same time.

Let's say you currently have $300K in company stock, which represents about 30% of your portfolio. Not great, but manageable. But then you realize you've got another $600K vesting over the next 18 months. If you don't sell any of it, you're gonna go from 30% concentration to 60% concentration.

That's the time to start planning. You don't want to wait until after the stock vests to think about diversification, because then you're making decisions under pressure... and you're dealing with a much larger tax bill.

The fourth trigger is what I call "lifestyle inflation risk." This is when your spending has increased based on your company stock value, making you more vulnerable to a correction.

Maybe you bought a more expensive house because your RSUs were doing well. Or you're contributing less to your 401k because you figure your company stock is growing faster. Or you've just gotten used to seeing your net worth increase by $200K or $300K a year.

The problem is, lifestyle inflation based on unrealized gains is extremely dangerous. If your company stock drops 40%, not only do you lose that unrealized wealth... you're also stuck with higher fixed costs that you can't easily reduce.

I've seen this happen to people during market corrections. Their company stock tanks, but they still have the same mortgage payment, the same car payment, the same private school tuition. Suddenly they're in a cash flow crisis that wouldn't have happened if they'd maintained a more conservative lifestyle.

The fifth trigger is what economists call "peak valuation risk." This is when your company's stock is trading at historically high multiples relative to earnings, revenue, or other fundamental metrics.

Now, I'm not saying you should try to time the market on your own company stock. But if your company is trading at 40 times earnings when the historical average is 20 times earnings, that's a signal that some of the stock's value might be based on optimism rather than fundamentals.

High valuations don't predict short-term stock movements. But they do suggest that future returns might be lower than historical averages. And if you're holding a concentrated position in an expensive stock, you're taking on additional risk without additional expected return.

You can check this by looking at your company's price-to-earnings ratio, price-to-sales ratio, and price-to-book ratio compared to historical averages. If all three metrics are well above historical norms, that's a yellow flag for concentration risk.

The sixth trigger is regulatory or competitive risk. This is industry-specific, but it's become increasingly relevant for tech companies over the last few years.

If your company is facing potential antitrust action, new privacy regulations, or significant competitive threats, that's additional risk that might not be reflected in the current stock price. And if that risk is specific to your company or your industry, you're not gonna get compensated for taking it in a diversified portfolio.

Think about tobacco companies in the 1990s, or banks before the 2008 financial crisis. There were warning signs that regulatory or systemic risks were building... but those risks weren't fully reflected in stock prices until they materialized.

Today, you could argue that some big tech companies face similar regulatory risks. I'm not making predictions about specific companies... but if you work in tech, you should at least be aware that regulatory risk is real and growing.

The seventh and final trigger is what I call "golden handcuffs fatigue." This is when the psychological cost of staying concentrated starts to outweigh the financial benefits.

Maybe you're losing sleep because 60% of your net worth depends on your company's quarterly earnings. Maybe you're checking the stock price obsessively. Maybe you're making career decisions based on stock performance rather than what's best for your professional development.

At that point, even if the math suggests holding the concentration, the peace of mind from diversifying might be worth the cost. Money is supposed to make your life better, not more stressful.

And here's the thing about golden handcuffs... they're often more psychological than financial. A lot of people think they can't afford to diversify because of taxes, but when you run the numbers, the tax cost is usually much smaller than they feared.

Now, recognizing these triggers is just the first step. Once you've identified that you need to diversify, you need a practical plan for doing it while managing taxes and other constraints.

And that's what we're gonna cover in our final section... the specific strategies and tactics for reducing concentration risk...

Practical Strategies for Smart Diversification

Alright, so you've recognized that you have concentration risk and you want to do something about it. The question now is how to diversify without killing yourself on taxes.

Let me walk you through the most effective strategies, starting with the simplest and moving to more advanced techniques.

Strategy number one is what I call "systematic selling." Instead of trying to time the market or make big one-time decisions, you create a predetermined schedule for selling company stock.

Here's how it works. Let's say you currently have $800K in company stock and you want to get down to $400K over the next two years. That means you need to sell $400K, or about $50K per quarter.

You set up a plan to sell $50K worth of stock every quarter, regardless of what the stock price is doing. Some quarters you'll sell when the stock is high, some quarters when it's low, but over time you'll get the average price... and you'll remove emotion from the decision.

This is basically dollar-cost averaging in reverse. Instead of buying a fixed dollar amount regularly, you're selling a fixed dollar amount regularly. It's not perfect, but it's much better than trying to time the market or making emotional decisions.

The key is to stick to the schedule. Don't skip a quarter because you think the stock is about to go up. Don't double up because you think it's about to go down. The whole point is to remove timing risk from the equation.

Strategy number two is "tax-loss harvesting around the position." This is where you use losses in other parts of your portfolio to offset gains from selling company stock.

Here's how this works. Let's say you've got some individual stocks or sector ETFs in your taxable account that are trading below what you paid for them. You can sell those losers to generate capital losses, and then use those losses to offset capital gains from selling company stock.

Under current tax rules, capital losses can offset capital gains dollar for dollar. And if you have more losses than gains, you can use up to $3,000 of excess losses to offset ordinary income, and carry forward any remaining losses to future years.

This strategy works best if you have a taxable investment account with a mix of individual positions. If everything in your taxable account is in index funds that have only gone up... well, you're not gonna have any losses to harvest.

But if you've been investing in individual tech stocks, sector ETFs, or actively managed funds, there's a good chance you've got some positions that are underwater and can be harvested for losses.

Strategy number three is "charitable giving with appreciated stock." If you're already planning to make charitable donations, using appreciated company stock instead of cash can be a huge tax saver.

When you donate appreciated stock to charity, you get to deduct the full fair market value of the stock, but you don't have to pay capital gains tax on the appreciation. It's like getting to sell the stock at zero tax rate.

Let's say you've got $50K worth of company stock that you originally received as RSUs when it was worth $20K. If you sell the stock, you'll owe capital gains tax on the $30K of appreciation. But if you donate it to charity, you get a $50K deduction and avoid the capital gains tax entirely.

This works especially well if you're in a high tax bracket and you're already maximizing other tax-advantaged accounts. You can donate the appreciated stock and then use the cash you would have donated to buy diversified investments.

The main limitation is that you need to actually want to make charitable donations. Don't force charitable giving just for tax reasons... but if you're already charitably inclined, this is a very tax-efficient way to diversify.

Strategy number four is "Roth conversion arbitrage." This is more advanced, but it can be incredibly powerful if you do it right.

The idea is to sell company stock in a year when your income is lower, and then use some of the proceeds to do Roth IRA conversions. You pay tax on both the stock sale and the Roth conversion in the same year, but because your income is lower, you might be in a lower tax bracket.

This works especially well if you're between jobs, on sabbatical, or if you've taken a year off for any reason. It also works if your company stock has declined significantly, because you can recognize the loss to offset other income.

Let's say you normally make $300K a year, but you take a year off and have minimal income. That's a perfect time to sell a large chunk of company stock and do Roth conversions, because you'll be in a much lower tax bracket than usual.

The key is timing. You want to bunch your taxable events into years when your income is lower, and spread them out of years when your income is higher.

Strategy number five is "exchange funds" or "swap funds." These are investment vehicles that allow you to diversify concentrated stock positions without triggering immediate tax consequences.

Here's how they work. You contribute your concentrated stock position to a fund along with other investors who also have concentrated positions. The fund then holds a diversified portfolio of all the contributed stocks. After seven years, you can withdraw your share of the fund, and you'll own a piece of a diversified portfolio instead of just your original stock.

The tax advantage is that the contribution to the fund is not a taxable event. You're essentially swapping your single stock for a diversified portfolio without paying capital gains tax.

The downside is that these funds are typically only available to very high net worth investors... we're talking minimum investments of $1 million or more. And you're locked up for seven years, so you can't access the money if you need it.

But if you qualify and you have the timeline, exchange funds can be an excellent way to diversify large concentrated positions.

Strategy number six is "collar strategies" using options. This is the most advanced technique, and it's not appropriate for everyone, but it can be very effective for managing downside risk while maintaining upside exposure.

A collar involves buying put options to protect against downside risk and selling call options to help pay for the puts. It's like buying insurance on your stock position.

Let's say your company stock is trading at $200 per share. You might buy put options with a $180 strike price, which would protect you if the stock drops below $180. To help pay for those puts, you might sell call options with a $220 strike price.

The result is that your downside is limited to $180, but your upside is also limited to $220. You've given up some upside potential in exchange for downside protection.

Collars don't solve the concentration problem... you still own the same stock. But they can reduce the risk while you implement other diversification strategies.

The main risks with options strategies are complexity and timing. Options expire, so you need to actively manage the positions. And if you don't understand options well, you can actually increase your risk instead of reducing it.

Strategy number seven, and this is really important... is "new money diversification." This means directing all of your new investments into diversified assets instead of company stock.

Even if you can't afford to sell existing company stock because of taxes, you can at least prevent the concentration from getting worse. Max out your 401k in diversified funds. Invest your bonuses and other cash flow in index funds. If your company offers an ESPP, consider skipping it or selling immediately after purchase.

This doesn't solve the concentration problem overnight, but it prevents it from getting worse. And as your diversified investments grow and your company stock stays flat or declines, your concentration will naturally decrease over time.

The key with all of these strategies is to have a plan and stick to it. Don't try to time the market. Don't let emotions drive your decisions. And don't let perfect be the enemy of good.

Reducing concentration from 60% to 40% is a huge improvement, even if it's not perfect. Reducing it from 40% to 25% is another big step. You don't have to get to the textbook ideal of 5% concentration overnight.

And remember... the goal isn't to minimize taxes. The goal is to optimize your overall financial situation, taking into account both taxes and risk. Sometimes paying taxes to reduce risk is the smart move.

The biggest mistake I see people make is waiting for the "perfect" time to diversify. They're waiting for the stock to hit a certain price, or for a better tax year, or for some other condition to be met.

But concentration risk is happening right now, every day that you're concentrated. And the longer you wait, the harder it becomes to diversify because the position keeps growing.

So my advice is to start with whatever strategy makes sense for your situation, even if it's not perfect. Get the ball rolling, and then you can optimize and refine over time.

Your Action Plan for Managing Concentration Risk

Alright, let's wrap this up with the key takeaways and your action plan.

First, calculate your real concentration risk. Don't just look at your investment accounts... factor in your human capital. If your job plus your investment portfolio are more than 50% tied to one company, you're in the danger zone.

Use this simple formula: take your company stock value, add the present value of your future earnings from that company, and divide by your total wealth including human capital. If that number is above 50%, you need a diversification plan.

Second, identify your specific triggers. Are you approaching the "life-changing money" threshold? Is your company becoming more correlated with the broader market? Do you have a bunch of stock vesting soon? Are you making lifestyle decisions based on unrealized gains?

Don't wait for all the triggers to line up. If any one of them applies to you, that's enough reason to start diversifying.

Third, pick a strategy and start implementing it. If you're not sure where to begin, start with systematic selling. Pick a target allocation... maybe 30% or 25% of your total portfolio... and create a quarterly selling schedule to get there over 12 to 18 months.

And here's the most important part... start with new money diversification regardless of what else you do. Even if you can't afford to sell existing company stock, you can at least stop adding to the concentration.

Max out your 401k in diversified funds. Invest bonuses in index funds. If your company offers an ESPP, consider selling immediately after the discount period instead of holding long-term.

Fourth, don't let taxes drive the decision. Yes, taxes matter, but concentration risk usually costs more than tax optimization saves. Run the numbers on what diversification would cost you in taxes, and compare that to the risk you're taking by staying concentrated.

In most cases, paying taxes to reduce risk is the right financial decision, even if it doesn't feel good emotionally.

Fifth, get help if you need it. Concentration risk management is one of the most complex areas of financial planning. There are nuances around AMT, state tax planning, estate planning implications, and options strategies that are beyond the scope of a single podcast episode.

If you've got more than $500K in company stock, it's probably worth working with a fee-based financial planner who specializes in tech compensation. The cost of good advice is almost always less than the cost of making mistakes with large concentrated positions.

And look, I get it... this stuff is complicated and emotionally difficult. You've worked hard for that company stock. It might have been your best-performing investment. It feels weird to sell something that's been making you money.

But remember... wealth preservation is just as important as wealth creation. And the biggest threat to tech wealth isn't market crashes or economic recessions... it's concentration risk.

The goal isn't to eliminate all company stock from your portfolio. It's to make sure you're taking concentration risk intentionally, not accidentally. And to make sure the concentration risk you're taking is proportionate to your overall financial situation.

Think of it this way... you wouldn't build a software system with a single point of failure, right? You'd have redundancy, failovers, disaster recovery plans. Your personal wealth deserves the same level of engineering discipline.

Now, if you found this episode helpful, I've got a favor to ask. Share it with a colleague who might be dealing with concentration risk. Most tech professionals are in the same boat, but nobody talks about it openly. You could be doing someone a real favor by starting that conversation.

And if you want to dive deeper into any of these strategies, visit fireweedcapital.com for show notes and additional resources. I've put together some worksheets and calculators that can help you quantify your own concentration risk and model different diversification strategies.

If you'd like to explore whether Fireweed Capital might be the right fit for your situation, you can schedule a conversation at fireweedcapital.com/meet. We specialize in exactly these kinds of complex equity compensation questions for tech professionals.

Before we sign off, I need to share the legal disclaimer. The information in this podcast is for educational purposes only and does not constitute personalized financial advice. Past performance is not indicative of future results. All investing involves risk, including possible loss of principal. Please consult a qualified financial professional before making investment decisions.

Until next time... keep building wealth on your terms, but make sure you're building it on a solid foundation. Don't let concentration risk be the single point of failure that brings down everything you've worked for.

Thanks for listening to The Fireweed Capital Podcast. I'm Dr. Adam Link, and I'll see you next week.