Family member has one million in one stock , doesn't want to cash out

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SantaClaraSurfer
Posts: 191
Joined: Tue Feb 19, 2019 11:09 am

Re: Family member has one million in one stock , doesn't want to cash out

Post by SantaClaraSurfer »

an_asker wrote: Wed Sep 09, 2020 4:09 pm I have a good idea to spend $5 on Schwab and create a "stock slice" with the following:

- AAPL
- FB
- AMZN
- NFLX
- GOOGL/Alphabet
- TSLA
I get that you're joking, but you can't currently purchase Tesla as a Schwab Slice, it's just S&P 500 companies, and I think it's also minimum $5 per stock not per purchase. So you could make a $50 purchase with 10 different stocks, or a $25 purchase with 5. It works fairly smoothly.

There's more info in the linked comment if you want to read more, and tbh, they work pretty well for making your own mini-index fund.
an_asker
Posts: 2742
Joined: Thu Jun 27, 2013 2:15 pm

Re: Family member has one million in one stock , doesn't want to cash out

Post by an_asker »

SantaClaraSurfer wrote: Wed Sep 09, 2020 4:52 pm
an_asker wrote: Wed Sep 09, 2020 4:09 pm I have a good idea to spend $5 on Schwab and create a "stock slice" with the following:

- AAPL
- FB
- AMZN
- NFLX
- GOOGL/Alphabet
- TSLA
I get that you're joking, but you can't currently purchase Tesla as a Schwab Slice, it's just S&P 500 companies, and I think it's also minimum $5 per stock not per purchase. So you could make a $50 purchase with 10 different stocks, or a $25 purchase with 5. It works fairly smoothly.

There's more info in the linked comment if you want to read more, and tbh, they work pretty well for making your own mini-index fund.
You are right. It indeed is $5 per stock. I misunderstood. Let me consider it a bit. I might well start a $50 per month personal mutual fund. There was a similar concept a few years ago called folio investing or some such (not on Schwab).

My biggest issue with Schwab is that there is no price guarantee but hopefully, it is either close of day share price or average for the day it would be a market price. Let's see ... but at least, I don't have to get 10 different stocks. I can just get a $5 slice of one stock and be done with it.
SantaClaraSurfer
Posts: 191
Joined: Tue Feb 19, 2019 11:09 am

Re: Family member has one million in one stock , doesn't want to cash out

Post by SantaClaraSurfer »

an_asker wrote: Wed Sep 09, 2020 9:16 pm My biggest issue with Schwab is that there is no price guarantee but hopefully, it is either close of day share price or average for the day it would be a market price. Let's see ... but at least, I don't have to get 10 different stocks. I can just get a $5 slice of one stock and be done with it.
The trades are executed very quickly during the trading day in my experience. You'll find it very simple and direct. You just have to use the Schwab Slice Portal to purchase.
Vihoo
Posts: 58
Joined: Wed Jun 05, 2019 11:48 pm

Re: Family member has one million in one stock , doesn't want to cash out

Post by Vihoo »

This post aged in a crazy way. I have a similar situation as OP.

Parents have a similar net worth (financially free 5-10 years ago).

They hold some leap options for 2022 in TSLA, and went up with similar gains (before the current dip). Still holding today.

We've had regular discussions about this "windfall".

Question comes up regularly about what would they would do with that money, and aside from paying a stupid amount of taxes there was no great answer. They also strongly believe in what TSLA is and will be doing in the future. They are planning to buy a CyberTruck in cash once that becomes available using (hopefully a small) portion of the gains.

So they are letting it ride. (As am I, currently, from $85 pre-split.)
Prettyfrtnt
Posts: 217
Joined: Fri Aug 23, 2019 6:28 pm

Re: Family member has one million in one stock , doesn't want to cash out

Post by Prettyfrtnt »

Yeah I’d be super careful about congratulating yourself on this one now. The game is about to be played out over the next 2-32 years. And while odds might favor you... The chances you just got your parents out of amazon in 2009, Apple in 2002, or Zoom in Feb 2020 loom very possible. By inserting yourself into the situation you have inadvertently taken on a risk of creating some legit anger and animosity. Maybe things go south forever and they are always thankful. But the situation has definitely not played out.

It’s something many of us struggle with. Giving friends and family “stock tips,” telling them who to manage their money, etc. really puts you on the line EVEN if it is the RIGHT decision... and it’s risky. This message board advocates empowerment of others around you by directing them to the writings of the BHs, bogle, etc. Then they ask the questions. If must be their journey and their decisions and realizations. Even a long term buy and hold can get spooked by a friend into a bad rebalance when the sky is falling. Best to only help when requested.
an_asker
Posts: 2742
Joined: Thu Jun 27, 2013 2:15 pm

Re: Family member has one million in one stock , doesn't want to cash out

Post by an_asker »

Prettyfrtnt wrote: Thu Sep 10, 2020 12:11 am Yeah I’d be super careful about congratulating yourself on this one now. The game is about to be played out over the next 2-32 years. And while odds might favor you... The chances you just got your parents out of amazon in 2009, Apple in 2002, or Zoom in Feb 2020 loom very possible. By inserting yourself into the situation you have inadvertently taken on a risk of creating some legit anger and animosity. Maybe things go south forever and they are always thankful. But the situation has definitely not played out.

It’s something many of us struggle with. Giving friends and family “stock tips,” telling them who to manage their money, etc. really puts you on the line EVEN if it is the RIGHT decision... and it’s risky. This message board advocates empowerment of others around you by directing them to the writings of the BHs, bogle, etc. Then they ask the questions. If must be their journey and their decisions and realizations. Even a long term buy and hold can get spooked by a friend into a bad rebalance when the sky is falling. Best to only help when requested.
While I agree with you, a parent is probably going to be way more forgiving than anyone else. With a friend, OK, you will lose a friend, no biggie. But with a spouse, the repercussions would be endless!!

Hearsay story (though likely true, I don't have first hand knowledge): Buddy - I'm not in touch with for over three decades but have common friends with - owned a startup in the Bay Area. Apparently, the company had buyout offers of $50 million (I don't know if that was the total offer or what he was going to be making out of it) but buddy refused to sell AGAINST his better half's better advice, holding out for bigger moolah. Well, familiar story happened; for some reason, the company crashed and burned. Buddy is single now! :oops:
harikaried
Posts: 1425
Joined: Fri Mar 09, 2012 3:47 pm

Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by harikaried »

sjl333 wrote: Thu Sep 03, 2020 4:16 pmDad held and plans to sell if it hits 400. He's lost 185k over a 3 day span. But is still up like 215k on the stock. We shall see what happens....
Just making sure, dad originally bought $600k TSLA at $1500 pre-split and wanted to stop loss at $200k gains. You recommended cashing out with $400k gains 2 weeks ago, but he got scared and cashed out at $60k gains last week. If held until today, he could have cashed out for $240k gains.

Are you making sure dad doesn't try to get back in because he missed out on $180k?
Topic Author
sjl333
Posts: 172
Joined: Sun Apr 20, 2014 2:59 pm

Re: Family member has one million in one stock , doesn't want to cash out

Post by sjl333 »

Dad got back in ... Around 350... 250k instead of 600k.

He bought some apple and Nvidia and some other stocks during this period ...
EnjoyIt
Posts: 4935
Joined: Sun Dec 29, 2013 8:06 pm

Re: Family member has one million in one stock , doesn't want to cash out

Post by EnjoyIt »

Just reading this thread puts butterflies in my stomach.

I’m so glad I only do index funds. It really does take those stomach bugs away.

OP,
Good luck to you and your dad. I hope he does well enough with his stock picking or you give him enough info over time so that he start using index funds. I was able to convince my dad slowly. At one point I convinced him that new money and any sales of stock he would normally do, he would buy S&P 500 with. A few years of seeing how well and how easy it was to own S&P 500 he eventually sold everything and went with a 60/40 portfolio S&P500/Bonds. It took years of slowly throwing out information to make this happen.

Again, I wish you luck.
A time to EVALUATE your jitters: | https://www.bogleheads.org/forum/viewtopic.php?f=10&t=79939&start=400#p5275418
GoldenFinch
Posts: 2283
Joined: Mon Nov 10, 2014 11:34 pm

Re: Family member has one million in one stock , doesn't want to cash out

Post by GoldenFinch »

I’ve been following this thread from from the beginning and I just want to say that I hope this all works out okay for your Dad in the long run.
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LTCM
Posts: 22
Joined: Wed Sep 09, 2020 3:58 am

Re: Family member has one million in one stock , doesn't want to cash out

Post by LTCM »

Hi I just want to say I think your dad is gambling. If you are concerned about that perhaps try researching gambling addiction/therapy specifically rather than investments. These bets have accurate pricing and pay dividends but with the tax implications they're probably still negative expected value. Good luck! :beer
GoldenGoose
Posts: 329
Joined: Tue Jan 30, 2018 2:08 pm

Re: Family member has one million in one stock , doesn't want to cash out

Post by GoldenGoose »

It looks like your dad might be timing it right. TSLA is going back up again. If it works for him, then that's great!!! High risk, high return. Definitely not a boglehead for sure. He could have put his money into boring bonds or money-losing CDs, you know.
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