When to Sell

Transcript

Mike:

Welcome to another Mike on Money. I’m Michael Reese, certified financial planner, founder of Centennial Advisors and creator of the prosperity planning system. Oh my goodness. I have got the show today. This is a great topic. I’m excited talking about this. We are going to talk about when do you know when enough is enough and what does that mean? Anyway, you got to check this out. This is gonna be great. All right. Before I dive in, remember as always, if you like this video, click the like button, read the little thumbs up button below. Subscribe. If you haven’t already share this video with all your friends and neighbors, we want to make sure we get the word out. Our goal here. We want to help them make smart financial choices so you can enjoy a fantastic second half of your life. The one that you deserve and Hey, we want everybody to get this kind of information.

Mike:

All right. Let’s dive into today’s topic. When is enough enough? Okay. I don’t know why, but we’ve been getting a rash of people coming in to see us, right. And they that have had similar issues. So here in Austin, Texas, I don’t know where you live, but if you live in Austin, lot of tech companies are here. And so a lot of people been working with these tech companies and for bonuses instead of getting cash, a lot of them actually get company stock. And so what’s happened is we’ve come across these people recently a number of them where that’s been the case. And over the years I’ve been getting company stock. I mean, imagine you’re working for a company like apple, where even getting company stock every year or Amazon or Google or whoever. I mean, these people are sitting there with millions, like millions of dollars of company stock.

Mike:

And they never want to let it go. It’s like, they just never want to sell it. Right. And it’s not just that I’m an Austin tech company, you know, I know you think Texas is all like oil and gas. No, Austin’s like Silicon valley. It is tech city. Here’s the other thing that I see you wouldn’t be a good tech guy or gal. If you didn’t have a good chunk of money in Bitcoin, would ya? Of course not. So we see Bitcoin like, shoot, I had a guy the other day with $8 million of Bitcoin. So here’s the thing, whether it’s Bitcoin, whether it’s, you know, Tesla stock or apple stock, or you name the stock, fill in the blank stock, okay. We’re coming across these people where they got more money than they’re ever going to spend, because why they made these huge bats in one company stock or Bitcoin or something, and it’s gone through the roof and they’re just sitting pretty right.

Mike:

They’re just like, man, we’re Kings of the universe here because the market’s done so well recently. Right? So the question is, how long do you hold this stuff? Like, when should you be selling off some pieces of it and kind of taking those like ticking chips off the table. So it’s kind of like, here’s what this it’s like. It’s like these people they’ve gone to Vegas here. They are at the blackjack table. And it’s like, oh my gosh, they’re chips. They got this huge stack of chips. It’s like, bro, man, look at all these chips and they’re just admiring it. And then the question is, how do you figure out, like, you know, how many of these chips should we maybe take off the table and put in our pockets and protect them? Cause it’s really hard. They don’t want to take any chips off the table.

Mike:

Cause they’re like, oh look how big that is. Oh my God, look how smart we are. We’ve gotten like, what do we do? It’s so big. It’s like, they’re paralyzed with what to do. So how do you know? That’s what I want to talk about. How do you know when enough, right. Is enough now, by the way, do I think they should take every chip off the table? No, but let me give you a little example. Right? Guy came to the office the other day literally has $10 million in two company stock. Two companies, one company used to work for another company, worked for now, right? $10 million. Holy cow. Right? He’s fine. And we did the math and we calculate it like, all right, for you to reach your goals, you don’t need all 10 million. You only need 4 million. So here’s what we would recommend. This is what we would encourage.

Mike:

What if you took 4 million of it off the table, put it in your pocket where it was safe and use that 4 million to generate all the income that you’d ever need for the rest of your life. And then there are other 6 million who cares. It can go to zero. It can go to 45 million doesn’t matter. Right? Why don’t you do something like that? You know what he said? Well, you sound like every other financial advisor. Every other advisor tells me the same thing. I should diversify. Hey, I didn’t diversify in the past. Look how well I’ve done. It’s like, okay, what’s your plan then? What’s your plan? When are you going to sell? Oh, I may never sell. Okay. What are you going to do to generate the income? You need that in retirement. And it’s well, that’s what I’m here for. Well, why are you here?

Mike:

If you’re not going to listen to us, this is the kind of stuff that happens. A lot of times we get paralyzed. We see these big, big piles, right? And then guess what? Every time you’re in Vegas. When you see some at the blackjack table where they get the big pile of chips, if they don’t take some off and put it in their pocket, if they don’t walk away, what happens about every time that power chips? Yeah. You know what happens, goes from here. And then we’re really freaking out. So when is enough enough, here’s how it works. You got $10 million. You need four of it to, you know, take care of you for the rest of your life. Take the stupid 4 million off the table. Don’t be an idiot, right? Or let’s say, you’ve got it. Doesn’t have to be $10 million. You know? Hey, the other day I had someone with $2 million and 2 million of one company stock.

Mike:

I said, you know, how much are we really going to need? You know what? You should do. Keep, go ahead, keep half there. Let’s take half off the table. Huh? This time though, you know what happened? The guy said to me, he goes, you know, Mike, that makes a lot of sense. He goes, I really liked that idea. I’ve always wondered like when should I do that? What you’re telling me makes sense. I can take half off the table. I can put it in my pocket. I can put it somewhere safe. It can grow. It can give me income and I’m good. And then it doesn’t matter what happens. This other million good or bad. I’m still going to be okay. Right. I’m like, yeah, you got it. He’s like, well, why wouldn’t I do that? It makes perfect sense. Okay. Who there be like that guy, don’t be like the first guy be that guy, right?

Mike:

Or that gal for you ladies out there, when you are fortunate enough to have participated in some insane growth, you get to a stage where suddenly you look at the numbers and they’re almost stupid. You know, what are the numbers? You’re like, I never thought I’d ever have that kind of money. This is incredible. Don’t panic. Right? Just take a breath, deep breath in, put a big smile on your face. Cause Hey, good news. You’ve won the game. Now it’s time to take some action. You wind up keeping people from like taking some chips off the table. You know, it takes, you know, prevents them from doing that. A lot of times they don’t want to pay capital gains tax. Yeah. That’s what it is. They’re like, oh, I have to pay capital gains tax, this is horrible. I don’t want to do that. Look. Do you think Warren buffet gives a hoot over capital gains tax when he wants to sell position?

Mike:

No. Do not let the tax tail wag the investment dog, your best investors. If the stock should be sold, they sell it. And whatever the taxes are there, they don’t give a hoot. They don’t care. It’s people that don’t know what they’re doing. They’re the ones that freak out over the capital gains tax. Don’t be that person either be like Warren buffet be like, be like the best industries in the world. If it makes sense to sell some, sell it. And if you pay capital gains tax, don’t be sad about it. Celebrate, celebrate. It means that you won you. It means you won. And that’s a heck of a lot better than a capital loss. We don’t want that. All right, sir, you go, when is enough enough when you can scrape some off the table, not all of it. Some and it’ll take care of you for the rest of your life.

Mike:

How’s that one. Anyway, that’s our message this week, please. If you like this, click the like button below, share with your friends. Subscribe. If you haven’t, if you have any questions, comments, leave them below. This is one of those topics. I’m pretty convinced. I’ll get some haters down there. So please, when you read the comments, you know, keep that in mind. But anyway, I hope you enjoyed it. That’s our show. We’ll see you next time. Remember? Right? What’s our job is to help you enjoy the second half of your life with prosperity, right? And live a prosperous life. So you take care of yourself, your family, your children. And of course, all those charities are important to you. That’s our message. See you again soon.

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