How Can You Turn Your Equity Compensation Into Durable Wealth?

True Root Financial is a fee only financial advisor and financial planner based in San Francisco, CA. We serve clients across the globe.

If you’re a tech professional in the Bay Area, there’s a good chance a large portion of your net worth is tied up in your company’s stock, through RSUs, stock options, or an employee stock purchase plan (ESPP). And let’s be honest: watching that number grow feels exciting. You’ve worked hard, your company’s thriving, and your equity package might be the most valuable part of your compensation.

If you are a tech professional interested in learning how we can help you claim your financial independence by investing wisely, minimizing taxes, and maximizing your equity compensation, please book a no-obligation call here.

If you are sitting on a mountain of company stock from RSUs, stock options, or ESPPs, then watch this video below where we break down the real risks of holding a concentrated stock position—especially for tech professionals whose income, job, and investments are all tied to one company.

Key Takeaways

• Concentration in company stock creates financial vulnerability, even if things are going well today
• A gap analysis helps you understand if your financial goals are achievable without your company’s equity
• Diversification doesn’t mean doubt; it means belief in your long-term financial freedom
• Working with a financial advisor helps you sell equity in ways that are both tax-efficient and emotionally manageable.

When Everything Rides on One Company

Equity compensation can be an incredible wealth-building tool, but it also creates concentration risk. That’s when your income, your job, and your investments are all connected to the same company. So if something goes wrong, company layoffs, a product delay, regulatory trouble, or a stock market stumble, you could be impacted in multiple ways at once.

Real story: We once worked with a client who had over 70% of their investable assets in one company’s stock. For years, it paid off. But when the company missed a major product launch and hit some bad press, the stock plummeted 40% in just a few months. That client’s financial plan took a big hit, one that could’ve been avoided with better diversification.

The truth is, wealth that’s concentrated can grow fast, but wealth that’s diversified tends to last.

So the question becomes: How do you turn that concentrated equity into lasting wealth?

Step 1: Start With a Gap Analysis

At True Root, one of the first things we do with clients holding company stock is a gap analysis. We look at your entire financial picture, cash flow, goals, risk tolerance, and temporarily remove your company stock from the equation.

Then we ask:

Can you still hit your long-term goals without that stock?

If the answer is no, that’s a clear sign some of your equity needs to be sold and diversified.

This process gives clarity. You don’t have to guess whether you’re overexposed; we’ll show you in real numbers what the risks are and what’s needed to reduce them.

Step 2: Address the Emotional Side of Selling

Let’s be honest: Selling your company stock isn’t just a financial decision; it’s emotional.

Maybe the stock’s been on a tear and you don’t want to miss out on more gains.

Maybe you feel loyal to the company.

Or maybe you’re just waiting for the price to tick up a little bit more.

But financial planning isn’t about perfect timing. It’s about being prepared for what happens if you’re wrong.

Think of it this way: If your company stock is a golden goose that’s been laying golden eggs, the smart move isn’t to wait and hope it never stops. The smart move is to sell a few eggs along the way and build a nest that can last, even if the goose stops laying.

Diversifying doesn’t mean you’re giving up. It means you’re planning ahead.

Step 3: Diversify Intentionally and Gradually

Once you decide to diversify, it’s important to do it intentionally and often, gradually.

That means:

• Selling equity over time to reduce your tax liability
• Coordinating with your broader financial goals (down payment? college savings?)
• Investing the proceeds in a diversified portfolio aligned with your risk profile and timeline

We often help clients build tax-efficient equity liquidation strategies. For example, selling enough RSUs each year to stay in a favorable tax bracket, or using charitable donations to offset gains.

If your equity is in non-qualified stock options, we’ll help you figure out when to exercise, how long to hold, and how to manage the AMT (Alternative Minimum Tax). These decisions can get complicated quickly, and mistakes are expensive.

Step 4: Navigate Tender Offers and Liquidity Events

If you work at a private company, the equity planning stakes are even higher. You might not have access to a public market to sell your shares, and you may only get liquidity opportunities through tender offers or secondary markets.

These decisions often feel murky:

•  Should you sell?
•  How much?
•  What are the tax implications?
•  What happens if the company IPOs or doesn’t?

One example: A client at a late-stage startup had the chance to sell shares at $20 each. They weren’t sure what to do. We walked them through a scenario analysis:

• If the company IPO’d at $30
• If it stayed flat at $20
• If it dropped to $10

In the end, they sold half. That gave them cash for a down payment on a house, and they still kept some upside if the company grew.

It’s not about gambling on the best outcome. It’s about managing risk and aligning decisions with your broader life goals.

The End Goal: Durable Wealth, Not Just Temporary Riches

Turning equity compensation into durable wealth requires a thoughtful plan—one that balances growth with protection.

That means:

• Knowing how much equity is too much
• Selling stock when it supports your long-term goals
• Avoiding emotional traps like “just one more run-up”
• Reinvesting in a diversified portfolio designed to last
• It’s not always easy. But with the right strategy and support, it’s absolutely possible.

Ready to Turn Your Equity into Lasting Wealth?

Whether you’re sitting on a mountain of RSUs, weighing a tender offer, or unsure when to exercise your options, you don’t have to figure it out alone. At True Root, we specialize in helping tech professionals in the San Francisco Bay Area make the most of their equity compensation, without putting their future at risk. Book a call below:

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