Jun 14, 2026
If you love the company you work for, you may be tempted to invest in the stock. Or, you may be given stock options as part of your compensation and end up invested by default.
Unfortunately, having both your portfolio and your paycheck tied up with the same business can be bad news. You could end up both losing your job and losing your money if something goes wrong.
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Even if that doesn’t happen, putting a large sum of money into any one company is a real risk.
Imagine a worker named Pete who invested $100,000 in his company’s stock over time. Then something disastrous happened — a bubble burst, a scandal hit the news or a mammoth rival put out a competing product — and now the value fell by 90%.
Pete still has his job, but he’s so upset that so much of the money he worked for is lost that he’s having a hard time staying motivated to even go to work. So, what can he do?
Take a deep breath and readjust
The first thing Pete needs to do is forgive himself for his mistake and try to think differently about the situation so he can get his motivation back.
“Losing a big chunk of money in your company’s stock can be painful for your nest egg and your peace of mind,” Mary Ware, a certified financial planner, senior wealth advisor and managing partner of Carnegie Private Wealth, told MoneyWise. “But it’s also an important lesson that can help you better protect and grow your assets going forward.”
Pete can’t get the money back, but he can choose to look at the situation as a learning experience, so he doesn’t get himself deeper into trouble by doing something drastic — like quitting his job or making more bad investments in hopes of getting back what he lost.
“Take a deep breath, assess your overall financial picture, and resist the urge to make any snap decisions based on fear or regret,” Ware said.
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Evaluate the impact and don’t let emotions be your guide
Next, Pete has to make a realistic assessment of how big the setback is.
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“Losing a lot of money in company stock can be painful. However, it is important not to let emotions lead to the next decision,” Corey Bates, financial and investment advisor at Solomon Financial, told MoneyWise. “The first thing you should do is evaluate the impact and how it relates to your overall long-term plan.”
Pete must look at what this loss actually means for him, and that’s going to depend on his overall financial picture. If he’s only 20, he has much more time to recover than if he’s 55. If he’s at the later end of his career, it may mean he has to wait longer to retire. He needs to look at his overall financial picture to know the effects.
“From there, use data and math to evaluate the best course of action,” Bates said.
Make a concrete plan to rebuild
Once Pete knows where he stands, it’s time to make a concrete plan to rebuild. He may have to invest anywhere from a few hundred to a few thousand dollars extra each month to recover, depending on his timeline.
For example, if he wants to end up with $1.5 million by retirement in 20 years and he now has $200,000 instead of $300,000, he’ll have to invest $1,742.99 per month instead of the $647.38 he’d have needed if he still had his extra $100,000 (assuming he earns 10% average annual returns going forward).
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This could mean making big spending cuts or taking on a side gig. But, fortunately, he still has a job, so he has options.
“For working professionals, your future earning power — often known as human capital — is your largest asset,” Ware said.
He also must make sure the rest of his money isn’t at risk.
“It’s important to evaluate the remaining exposure and rebalance if necessary. You want to ensure you’re appropriately diversified over the long run and draw up a plan to try to avoid large losses in the future,” said Bates.
This especially means avoiding getting over-invested in the business again.
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“You can reduce your risk of this happening again by knowing how your assets are allocated and not allowing company stock to become too large a percentage of your overall portfolio,” said Ware.
Ware advises regularly selling company shares as they vest, and reinvesting the proceeds among a diversified mix of investments, including stock and bond funds.
“Diversification may not eliminate losses, but it can help protect your financial future by ensuring that your paycheck, benefits and investments aren’t all tied to the success of a single company,” she advised.
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Look for the silver lining
While there are few benefits to losing $100,000, there is one potential perk.
“The silver lining is perhaps you can use the loss as a tax advantage to offset capital gains elsewhere in your portfolio,” Bates advised.
Hopefully, Pete will have other great investments that perform well over time so he can take advantage of this capital loss offset, rebuild his portfolio and recover his excitement at going to work and improving his financial life.
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Christy Bieber has 15 years of experience as a personal finance and legal writer. She has written for many publications including Forbes, Kilplinger, CNN, WSJ, Credit Karma, Insurify and more.
