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(AP Photo/Mark Lennihan, File)
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Dave Ramsey says: Restricted stock can put too many eggs in one basket

(AP Photo/Mark Lennihan, File)

Dear Dave,

My husband works for a large company and receives restricted stock bonuses of approximately $5,000 each year. We’re not sure exactly how long they’re restricted, and we both wonder if we’re allowed to sell these options?

Patty

Dear Patty,

You said your husband works for a large company, so my guess is they do this as an employee retention move. That’s why they restrict the stock. They’re trying to get people to stay with the company, and you’ll only be able to sell them after they are no longer restricted.

Usually, these kinds of things have a one- or two-year restriction. I doubt they’d put a five-year hold on it, but check with the company to find out the specifics. They can tell him when the stock is free to be sold.

If it were me, I wouldn’t hold on to too much of it. I don’t own single stocks. They have too much risk for my taste. Keep a little bit, if you want, but don’t put all or even most of your financial eggs into that one basket!

—Dave

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