RSUs made you wealthy. Diversification will keep you wealthy

^{Rajesh , a 40-year-old senior engineering manager at Apple, had done everything right. Over the past decade, he had steadily built his career, received annual RSU grants, and watched Apple's stock create significant wealth. On paper, he had accumulated a net worth of around 3 crore—but nearly 50% of it was invested in Apple stock.}

^{Rajesh had a growing concern. “What if Apple's stock falls sharply? What if I lose my job during a market downturn? Am I taking more risk than I realise?"}

^{Assessing your concentration Risk}

^{Rajesh believed in his employer's long-term prospects but also understood that no company—however successful—is immune to market volatility, technological disruption, regulatory challenges, or changing business cycles.}

^{The biggest risk is often owner's bias—believing your company's stock will always outperform simply because you work there. In today's world of AI disruption, rapid technological change, and an evolving job market, no company is guaranteed to remain a winner forever. Separate your career from your investments, assess your company's future objectively, and never keep adding to a falling stock simply because you own it.}

The two scenarios below reflect the situations many Indian professionals face.

Scenario 1: RSUs are more than 50% of your net Worth

^Positives

• ^{Significant upside if your company continues to perform well. You continue to benefit from future RSU grants and stock appreciation.}

^Negatives

• ^{Half your wealth depends on a single company. Your salary, career, and investments are all linked to the same employer. A sharp fall in the stock price can significantly impact your overall wealth.}

^{Takeaway:
50% exposure is way too high. Gradually sell a portion of vested RSUs and reinvest in a diversified portfolio to reduce concentration risk while retaining future upside. Create a sell discipline (e.g., sell 30–50% on vesting to de-risk)}

^{Scenario 3: RSUs are 20-30% of your net Worth}

^Positives

• ^{Keep a vigil as you continue to participate in your company's growth .Employer stock no longer dominates your overall portfolio.}

^Negatives

• ^{Some company-specific risk still remains. Future RSU vesting can gradually increase concentration if left unchecked.}

^{Takeaway:
Around 20- 30% on a sound corporate is justified , the risk is generally manageable but changes can be drastic. Continue reviewing your portfolio regularly and trim holdings periodically to maintain a healthy asset allocation. Use RSUs to diversify globally - broader indices, tech or non-tech sectors, emerging trends, etc. Align vesting schedule with long-term goals (education, retirement corpus, etc.)}

_{Don't let taxes stop you from diversifying}  

Many employees delay selling because they worry about capital gains tax. However, tax should never become the primary investment decision.

Paying tax on gains is often far better than exposing your portfolio to the risk of a significant fall in one stock.

For example: Suppose your RSUs have appreciated by ₹80 lakh. You may hesitate because selling creates capital gains tax. But imagine the stock falls by 30% before you sell. Your portfolio could lose ₹30 lakh or more—far exceeding the tax you were trying to avoid.

The goal is not to avoid taxes. The goal is to maximise your after-tax wealth over the long term.

Tax lot management: For shares received at different vesting dates and prices, managing which "lots" you sell can impact your tax liability. Using specific identification for shares sold can allow you to minimize capital gains.

^{Adopt a Systematic Vest-and-Sell Strategy}

Instead of accumulating employer stock over time, sell a predetermined portion of your vested RSUs and reinvest the proceeds into a diversified portfolio aligned with your financial goals. This disciplined approach reduces concentration risk, removes emotional decision-making, and helps build long-term wealth while allowing you to continue benefiting from future RSU grants

Be aware of potential blackout periods where you are prohibited from trading company stock. You should also understand the tax implications of each sale

Think Beyond Your Employer—Diversify Globally

Most Indian professionals working for multinational companies already have substantial exposure to the US technology sector through their employer's RSUs. Buying more US tech stocks may simply increase concentration rather than improve diversification. Instead, build a globally diversified portfolio that spreads risk across geographies, sectors, and asset classes.

Many Indian professionals holding RSUs in US-listed companies are unaware that these shares are considered US-situs assets. For non-US residents, holdings above USD 60,000 may be exposed to US estate tax of up to 40%, creating a significant liability for heirs. As your RSUs grow, review this exposure periodically, consider reducing concentrated US stock holdings, and where appropriate, reinvest through globally diversified non-US domiciled funds (such as UCITS funds).

Final Thoughts

RSUs can create life-changing wealth—but concentrated wealth can also create life-changing risk. Don't let one company's stock determine your family's financial future. Manage taxes wisely, diversify systematically, and review your RSU portfolio regularly so your wealth is built on a strong, resilient foundation—not the fortunes of a single employer.