The Malcolm On Money Guide to Restricted Stock Units

Out of 252 available trading days in 2024, the S&P 500 Index notched 57 new all-time highs, with the most recent record close at 6,090.27. This record-breaking market performance has left many investors sitting on massive unrealized gains, prompting the question of whether or not now is the time to sell and lock in some of those profits.

While the question itself is obviously straightforward, the answer is not. As markets continue to power higher, it can be challenging to find attractive opportunities to redeploy the cash from a sale. But for investors who have a more moderate to conservative risk tolerance, a possible solution is to pay off their home mortgage using the proceeds from some of those highly appreciated stocks or other investments.

For many investors, financial independence is the ultimate goal. It’s the point where your assets generate enough income to cover your living expenses, giving you the freedom to work on your own terms or choose to retire completely. 

However, reaching this milestone should also prompt a critical shift in your investment strategy. While the path to financial independence often involves seeking higher returns to accelerate wealth accumulation, continuing to take on too much risk once you've achieved that goal can be detrimental to your long-term financial security.

As Baby Boomers continue to enter retirement, following decades of diligent saving and investing, many are finding themselves sitting on a nest egg that is significantly larger than they will realistically need to live on. In fact, according to Fidelity's most recent 401(k) Millionaire study, the number of people with $1 million or more in their 401(k) accounts reached another all-time high. 

For many, this creates an opportunity to rethink the traditional approach to inheritance. When most people think about leaving an inheritance to their next generation(s), they imagine passing on assets after they’ve passed away, ensuring their children and grandchildren are financially secure for years to come. While this traditional approach to inheritance has its merits, there is an increasingly popular alternative that offers profound emotional, financial, and practical benefits: a living inheritance.

A recent survey by PwC of nearly 4,000 business and tech executives representing some of the largest global companies suggests that in 2024, 79% of organizations intended to increase their cybersecurity budgets from 2023. The survey also notes that the cost of security breaches, as well as the number of high-dollar breaches, continues to increase. And although cyber attacks are the top concerns cited, only half the organizations surveyed indicate they are ‘very satisfied’ with their technology capabilities in key cybersecurity areas.

Every four years, the world gathers to watch the Olympic Games and marvel at the incredible feats of athleticism and the awe-inspiring dedication of the competitors. Whether your favorite event to watch is gymnastics, swimming, or track and field, the athletes who compete all share similar traits that go beyond physical ability, such as discipline, mental toughness, and a willingness to delay gratification.

The success of investing legends like Peter Lynch, author of “One Up on Wall Street,” who achieved remarkable long-term returns during his tenure managing the Fidelity Magellan Fund, underscores the value of patience and persistence. Lynch famously advised investors to "buy what you know" and to stay the course, even during market turbulence. His philosophy is one that mirrors the long-term dedication of Olympic athletes.

As a parent, teaching your children to become financially responsible is one of the most impactful lessons you can impart. However, knowing what to say, how to say it, and how much information is too much information to share all at once can feel daunting. So much so, that it keeps most parents from ever trying.

In this episode of Malcolm on Money Office Hours, Malcolm shares some questions that parents can use as conversation starters with their children of any age, to help open up lines of communication and get comfortable discussing money as a family.

Individual Retirement Accounts (IRAs) are intended to be used as a savings and investment vehicle for retirement. And while it is not uncommon for workers to have a need to tap into this account prior to retirement, if you withdraw funds from your IRA before you reach age 59½, you could owe the IRS a 10% early distribution tax on top of the regular income taxes associated with a distribution from a traditional IRA.

There are, however, a few exceptions to the additional 10% tax. In this episode of Malcolm on Money Office Hours, Malcolm discusses the exceptions to the IRS’s 10% penalty on early withdrawals from IRAs, and shares how to go about claiming such an exception on your tax return.

Health Savings Accounts (HSAs) are often referred to as a triple tax-advantaged savings and investment vehicle, due to their ability to allow tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses. Yet many Americans do not take full advantage of their potential. 

Despite their immense tax advantages, HSAs remain underutilized and mismanaged by a significant portion of those who have them. Oftentimes, HSA owners treat them like a simple checking account to cover immediate medical expenses, failing to recognize their long-term benefits.

In this episode of Malcolm on Money Office Hours, Malcolm shares his take on how to optimize contributions to an HSA, as well as some of the common mistakes HSA participants tend to make and how to avoid them.

It can often be tempting to accumulate as much stock in your employer as possible- whether as a show of confidence in the future of the company, or as a means to accumulate wealth quickly.But when you decide to join your finances with a spouse or partner, in addition to determining if and how you'll merge your various checking and saving accounts, it's also important to determine how you'll approach investing as a couple.

In this episode of Malcolm on Money Office Hours, Malcolm makes the case for why it's important to take some chips off the table along the way, as well as use the shares that you've accumulated as part of your total compensation package to achieve some of your bigger financial goals. While there's no problem with maintaining a position in your company's stock, you want to make sure that no one security represents more than 20% of your overall net worth at any point.