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Comment by qPM9l3XJrF | Hacker News Reader

What are the most common reasons for losing it?

The number one reason for folks who won the "IPO lottery" is they fail to cash out/diversify their stock, and at some point in the future the stock price drops dramatically.

For example, during the 2001 tech boom/bust a lot of tech companies went bankrupt in a very short period of time. As a result a lot of tech employees saw the value of their stock/options drop to zero (effectively). The speed in which the bust happened caught a lot of people off guard.

It is generally a good idea to move at least some of that money into a diversified portfolio as soon as possible. But folks often put this off because they don't want to pay the cap gains taxes and/or they think the stock will keep climbing.

I guess I did the right thing: Atlassian IPOed in 2015 at $21, despite everyone suggesting to cash out, I wasn’t interested, and I sold only since 1 year between $180 and $320, and kept 1/3rd. BUT it keeps climbing, $480, so you aways feel like you’re missing something, whether you sell or not.

There is no right way of doing it, you’ll never sell at the top. At least the right moment is when you can use the money for a project.

sell half, keep half (or whatever ratio you're comfortable with)? that way if thing go bad they are not as bad as ending up with nothing and if they get better you still benefit a little bit.

My econ teacher always said to keep the money invested you want to lose. Couldn’t you take out a sum, but keep investing a sum you dare to lose?

My econ teacher taught me nothing about personal finance. Is this normal?

I dunno, got taught in Europe, got micro, meso and macro in different years, and sometimes semesters. My econ teacher was also a bit weird in a good way, a real character with a lot of knowledge. Ofcourse I didn’t do anything with it, wish I had.

Hence GP says 'diversify'. If you weren't an employee, or were one with no related stock in the company, would you buy so much, invest ~everything, in that (or any) one company? No? Well, don't treat holding differently to buying. It's the same, modulo fees & tax.

Michael Saylor says only invest the money you can't afford to lose.

This is likely closer to reality, if one is cryptocurrency savvy.

I don’t really get this point… how does that work?

If you can afford to lose your money, don't invest it into cryptocurrency and keep it as USD or other fiat.

All the ghost industries like US airlines kept afloat by money printer go bur. It keep going and the intrinsic value of a BTC go up. (Numba go up)

I'm guessing lifestyle inflation, divorce, bad investments ...

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