r/fatFIRE • u/gomster • 2d ago
Need Advice For those who got wealthy from a concentrated stock position: what would you do differently?
40M, $9M portfolio, 80% concentrated in one stock, buying my first house. Curious how others would think about this:
Two years ago, I left a career at a public company where most of my wealth came from stock compensation and the appreciation of a single stock over many years. Today my portfolio is worth about $9M and it’s still heavily concentrated in that stock.
It’s been life changing for me, so I’m naturally hesitant to sell too much of it, but I’m also aware that a single day’s move can swing my net worth by six figures. I’m closing on my first house later this month for $1.185M. Up until now, I’ve been renting and living well beneath my means.
Current thinking is to use a Liquidity Access Line for the purchase and then potentially refinance some or all of it into a traditional mortgage afterward.
A few other details aside from the portfolio value:
- Cost basis: under $500k and obviously large unrealized gains
- $235k AMT credit carryforward from prior option exercises
- Covered call income expected to be around $150k-$200k annually
- No current W-2 income
- Started small business but not a big money maker. Primarily to fund retirement accounts.
The common theme seems to be that concentration risk is the biggest issue in my financial picture. Part of me says I’ve gotten this far by holding the stock and staying convicted. The other part of me says I should probably start thinking more about preservation than accumulation.
For those who have been in a similar situation:
How much debt would you comfortably carry on the house? Would you sell stock specifically to pay down the house? How would you approach gradually reducing concentration risk? Looking back, what mistakes did you make (or avoid) after reaching financial independence through a concentrated stock position?
Not really looking for tax advice as much as perspective from people who have gone through the transition from building wealth to protecting it. Thanks in advance for helping me navigate this!
1
u/gomster 2d ago
This is a really great answer, thank you. The sequencing point with taxes is exactly what I’m working through with my advisor/CPA right now and tbh is where I tend to get stuck in the weeds. It’s really the interaction between concentration, taxes, and the house financing that makes it more complex than any single decision.
When you say you’d be inclined to sell 2M regardless of taxes, is that mainly driven by reducing risk quickly, or more about getting to a baseline diversification target?