The Malcolm On Money Guide to Restricted Stock Units

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.

Right now, at this very moment, a growing number of employers are offering some of their more tenured workers large, lump sum payments to turn in their key cards and credentials and retire early.

Especially for those who work in fields like tech, or maybe finance, where companies are currently trying to reduce headcount as a way to show Wall Street they mean business when it comes to controlling costs and exercising some fiscal discipline.

In this episode of Malcolm on Money Office Hours, Malcolm lays out the key things to consider when reviewing an early retirement offer from your employer, as well as how to know whether you are actually ready to accept it.

With all of the recent changes to the rules surrounding inherited retirement accounts, it can be tough to figure out what, exactly, you are required to do to stay on the right side of the IRS.

However, By understanding the rules around inherited retirement assets, you will be better equipped to avoid costly mistakes, like early withdrawal penalties.

In this episode of Malcolm on Money Office Hours, Malcolm shares a few things to be aware of if you have just inherited a retirement account from a loved one, as well as advice on how to keep from giving close to 50% of it over to the IRS unnecessarily.