A woman who worked at Tesla for six years is sitting on $650,000 worth of company stock, and she’s hoping it grows to $1 million before she sells. The 37-year-old project engineer earns $70,000 a year, rents for $1,000 a month, and has $20,000 in debt she plans to pay off this year. Despite having no cash savings, she’s holding onto the stock, nervous about tax implications and convinced it could rise further.
Gambling, Not Strategy
Personal finance experts Dave Ramsey and George Kamel discussed the situation on an episode of “The Ramsey Show,” and they had a lot to say. “This does border on gambling,” Kamel said. “Waiting for your single stock to go up another 30-something percent so that you can cash out at the right time—that scares me. Who knows what’s going to happen with Tesla?”
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“I’m not dissing Tesla, but I’m not buying it,” Ramsey said, stressing the importance of diversification. “If you’re 37 years old and you have $650,000 in cash stacked in the middle of the kitchen table, what do you do with it? Go buy Tesla stock? No. Go buy any single stock? No. Go buy a house? Yes.”
He acknowledged she'd owe taxes, roughly $100,000 in long-term capital gains, but said, “Welcome to making money. Sorry, but that goes with the territory.”
Ramsey urged her to cash out, pay off her debt, and buy a home outright. With no rent or mortgage, she could save thousands monthly and invest aggressively. “Now you can load your 401(k)s, your Roth IRAs. You can stack cash. You’re going to have zero debt and no house payment of any kind,” he said. “You’re going to have another million dollars in just a few minutes if you do this,” Ramsey added.
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Why He Doesn't Touch Individual Stocks
Ramsey is known for his overall stance on single-stock investing. He once said, “I don’t buy single stocks. And the lack of diversification is one of the reasons.”
He warned that tying too much of your wealth to one company, even a strong one, could backfire. “They can make the decision to do anything stupid and suddenly you could have a Bud Light moment,” he said. His co-host added, “Or a Tesla moment, or even a Cracker Barrel moment.”
Ramsey emphasized that mutual funds, which hold dozens or hundreds of stocks, offer more protection. “If you had $1.8 million in 90 to 200 stocks, you'd be perfectly safe compared to having 34% of your net worth in one singular company's behaviors,” he said. “You can see the stock just nosedive. I don't want that. I don't have control over that. So, I'm not putting my money in that.”
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