A Redditor with a $9.25 million net worth has a significant portion concentrated in one stock, resulting in a $3.7 million capital gain. This concentration poses a risk, prompting the individual to seek advice from the Fat FIRE Reddit community on diversification strategies. Suggestions include gradually selling shares and relocating to a state without income taxes to reduce the tax burden. A commenter shared their successful experience of moving to Florida before selling a business to avoid state taxes. It's also important to determine how many shares to retain for future retirement needs.
Gradually selling shares and moving to a state without any income taxes can minimize the tax burden.
One commenter mentioned that he moved to Florida right before selling his business. Then, he didn't have to pay any state income taxes.
The Redditor currently faces a state income tax that will range from 7.8% to 9.8%. Most of their state taxes will be at 9.8% by the time they sell shares.
Determining how many shares to keep can help estimate how many shares to sell while unwinding a large position.
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