A 50-year-old Seattle woman, known as Sarah, recently discovered that a long-forgotten employee benefits account from a former tech employer had grown to a staggering $18 million. Sarah, who has spent the last 20 years homeschooling her children, shared her story on The Ramsey Show, admitting she was overwhelmed and had “no idea” how to manage the unexpected fortune.
While Sarah did not name the specific company, the massive growth led many to speculate the stock could be a high-performer like Nvidia or Amazon. The account, which was worth very little when she left the company decades ago, skyrocketed in value due to the explosive growth of the tech sector. Sarah’s situation highlights the power of long-term compounding, but it also presents a significant financial risk: “single-stock concentration,” where nearly a person’s entire net worth is tied to the performance of one company.
Financial expert Dave Ramsey advised Sarah to prioritize safety through diversification. He warned that holding $18 million in a single stock is “scary and unwise,” recommending she sell the shares to reinvest in a diversified portfolio, such as low-cost index funds. Ramsey acknowledged the heavy tax burden Sarah faces, including a potential 20% federal capital gains tax and Washington State’s 7% capital gains tax on high-value sales. Despite the tax hit, Ramsey insisted that the security of a diversified portfolio is worth the cost, urging her to consult a fiduciary tax planner to handle the transition strategically.
