There’s a pattern I keep seeing among tech and biotech professionals. They hold onto their RSUs long after they vest.

And on the surface, it makes sense. You believe in the company. You’ve seen it grow. Maybe the stock’s been a rocket ship the last few years, and you think it still has room to run.

But belief isn’t a strategy.

Holding everything because you fear the tax bill or think the story will never change isn’t risk management. It’s emotional decision-making.

Taxes Aren’t the Real Problem

When I ask why people don’t sell, most say the same thing. “I don’t want to owe 40% in taxes.”

That sounds logical. But the tax doesn’t disappear. It just waits. And if the stock drops 50%, you’ve saved on taxes for the wrong reason.

Sometimes, setting up a structured schedule to sell when RSUs vest and diversify over time can actually reduce total taxes and give you more control. You can still keep exposure through ESPPs or unvested shares. You’re just doing it in a balanced and intentional way.

A Story I’ll Never Forget

A few years ago, a biotech executive came to me for a review. She was 41, sharp, and had built her entire net worth inside one company.

Her RSUs, ESPPs, and direct holdings had grown to more than $5 million. When I ran the numbers, I recommended she consider diversifying part of her position into a portfolio that matched her goals, age, and risk tolerance.

She still had more shares vesting in the future and continued buying through her ESPP, so diversification didn’t mean losing faith in her company. It just meant reducing her single-stock risk.

She decided not to. Her colleagues, all high-level directors, were in the same position and believed their company was different.

Within six months, the stock dropped more than 60%. Most of that group saw years of wealth disappear in a matter of months.

It happens more often than people think. Everyone believes their company is different. Until it isn’t.

When Concentration Turns Into Risk

That’s how concentration risk sneaks up. At first, it’s manageable. Then one day you realize most of your net worth is tied to the same company that also pays your salary.

That’s not diversification. That’s doubling down.

You wouldn’t put 80% of your career capital into one project, but that’s exactly what happens when your future depends on a single ticker symbol.

Building a Smarter Plan

Diversifying doesn’t mean losing faith in your company. It means protecting your family and your future.

That could mean:

• Selling a percentage of each vesting cycle automatically
• Reinvesting into a diversified, goal-based portfolio
• Keeping “risk-on” exposure where it makes sense, while managing what’s at stake

The goal isn’t to time the market. It’s to protect what you’ve built and maintain flexibility for the future.

I’m not trying to scare anyone. Far from it. For some people, holding a concentrated position still makes sense. For others, it doesn’t. But there’s always a point where it becomes too risky for anyone.

When things change, they often change fast. And by the time you realize it, much of the damage is already done.

Just something to think about.

If this feels close to home, it may be worth reviewing your exposure and seeing if your current strategy still fits your life today.

Mateo

Disclaimer: This material is for informational and educational purposes only and should not be construed as investment, tax, or financial advice. All investing involves risk, including possible loss of principal. You should consult a qualified financial and tax professional regarding your personal situation before making any investment decisions.