Restricted Stock Units (RSUs) can feel like a golden ticket for high-earning tech workers. They boost your net worth on paper, often dramatically. But unless you sell and convert them into cash flow, they’re just numbers in your brokerage account.
The real challenge isn’t just receiving RSUs—it’s learning how to transform them into a life you’ll actually live: funding experiences, creating security, and giving yourself freedom.
In this post, we’ll cover rules of thumb for selling RSUs, strategies for diversification, how to align equity with your personal goals, and practical spending guardrails so your wealth translates into a better quality of life.
Why RSUs Are Different From Other Assets
RSUs are not like buying a stock in your brokerage account. You don’t get to choose the timing, the price, or the tax basis.
They vest on a schedule, and each vesting event is taxed as ordinary income, not as long-term capital gains. That means every vesting day, the IRS treats you as if you just received a cash bonus—even if you don’t sell.
This creates two issues:
- Concentration Risk: You suddenly own more of the same stock you already rely on for your paycheck.
- Liquidity Dilemma: You may hesitate to sell because it “feels” like giving up upside, but holding concentrates your risk even further.
The starting point for most high earners is to ask: Should I sell my RSUs or hold? The default answer for many financial planners is “sell,” but the real nuance comes in how and when.
Rule #1: Treat RSUs Like a Cash Bonus
If your employer paid you a $50,000 cash bonus, would you immediately buy $50,000 of your company’s stock with it? Probably not. You’d save some, invest some, maybe spend some. RSUs should be treated the same way.
Selling immediately at vesting converts uncertain stock value into cash flow you can control. This doesn’t mean you ignore the tax impact—it means you acknowledge that the tax bill is already due at vest. Holding longer doesn’t defer taxes; it only introduces more volatility.
Think of RSUs as cash with volatility attached. The sooner you separate the cash from the volatility, the better you can use it to fund your actual life.
Rule #2: Diversify Beyond Your Employer
High earners in tech often face a dangerous trifecta:
- Salary tied to company performance.
- Future career prospects linked to industry cycles.
- Net worth concentrated in employer stock.
That’s too many eggs in one basket. A diversify RSU strategy usually looks like this:
- Sell at vesting (or within a set window) to capture value.
- Redirect proceeds into a globally diversified portfolio: U.S. index funds, international stocks, bonds, or even real estate.
- Automate the process so you don’t second-guess based on market headlines.
Diversification turns unpredictable equity into a steady wealth engine. Instead of betting on a single company, you bet on the global economy.
Rule #3: Connect Equity to Your Goals
Money that just sits in accounts doesn’t change your life. The way to unlock meaning is by tying wealth to goals.
Examples of goals high-earning tech employees often fund with RSU sales:
- Buying a home (down payment or mortgage payoff).
- Supporting children (college funds or even intergenerational gifts).
- Career flexibility (sabbaticals, startup funding, or early retirement).
- Experiences (world travel, big family milestones, or philanthropy).
Ask yourself: If I sell these RSUs today, what could I create in my life within the next 12 months? Linking equity to specific goals prevents it from being just “more money.”
Rule #4: Plan for RSU Taxation
RSU tax planning is where many high earners leave money on the table. Key considerations:
- Ordinary Income at Vesting: Each RSU is taxed as if it were salary. Withholding may not be enough, especially if your company only withholds 22%–37% while you’re in a higher bracket.
- Capital Gains on Growth: If you hold after vesting and sell later, any appreciation is taxed as capital gains. This can be attractive, but only if you’re comfortable with the volatility.
- State Taxes: In high-tax states (California, New York), RSUs can easily push your effective tax rate above 45–50%. Relocation planning (to Texas, Florida, Washington) becomes part of the strategy.
- Charitable Planning: Donating appreciated shares can offset tax while funding causes you care about.
A proactive tax plan—quarterly estimates, tax-efficient investments, and charitable tools—turns RSUs from a headache into an opportunity.
Rule #5: Use Nauma to Project and Plan
Managing RSUs isn’t just about selling at the right time—it’s about understanding how those sales fit into your long-term financial picture. That’s where Nauma comes in.
Nauma was built specifically for people in tech who face challenges traditional advisors often overlook: equity compensation, concentrated stock positions, complex taxes, and non-traditional career paths like sabbaticals or launching startups.
With Nauma you can:
- Build financial projections that show how selling RSUs today affects your long-term wealth, retirement readiness, and tax profile.
Set financial goals—like buying a home, funding education, or taking time off—and see what it takes to achieve them. - Spot concentration risks by viewing all your accounts and equity in one place.
- Model tax outcomes so you aren’t surprised by April bills.
Instead of generic rules, Nauma helps you make personalized, data-driven decisions—whether you want to retire early, start a company, or simply enjoy more of your wealth today.
Case Study: From Paper Wealth to Real Life
Consider Maya, a senior engineer at a Big Tech firm. Over five years, her RSUs grew into $1.2M of employer stock. On paper, she looked wealthy. In reality, she rented a one-bedroom apartment and avoided vacations, afraid to spend.
With a strategy, she:
- Sold 75% of her RSUs at vesting, diversifying into index funds.
- Set aside $200K for a home down payment.
- Funded $20K/year in travel and experiences.
- Donated $25K in stock to a donor-advised fund, lowering her tax bill.
The result: real improvements in her life—security, experiences, and freedom—without losing sight of long-term wealth building.
A Balanced RSU Strategy in 5 Steps
To put it all together:
- Acknowledge RSUs are income. Taxes are due; risk is real.
- Sell promptly and diversify. Treat RSUs like a cash bonus.
- Match proceeds to goals. Convert equity into things that matter.
- Optimize for tax efficiency. Use planning tools, not wishful thinking.
- Use Nauma to plan. Build projections, set goals, and connect today’s choices to tomorrow’s freedom.
Following these steps turns your employer equity from a risky concentration into a reliable source of cash flow and life satisfaction.
Final Thoughts
Your RSUs are more than just stock—they’re potential freedom. But freedom doesn’t come from watching the numbers climb on a brokerage screen. It comes from transforming volatile equity into experiences, security, and flexibility that align with your values.
The question isn’t just “Should I sell RSUs or hold?” The better question is: “How do I use this wealth to design a life I’ll actually use?”At Nauma, we help high-earning tech professionals answer exactly that question—by turning equity into cash flow, and cash flow into the life you want to live.
Also Read: Stellantis Stock Tumble Amid Global Automobile Slowdown: Tough Calls for Tough Times
