When to Sell Your Stocks, and How to Survive a High-Pressure Job

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**Scott Galloway** (1:30)
Welcome to Office Hours of Prof G. This is the part of the show where we answer your questions about business, big tech, entrepreneurship and whatever else is on your mind. If you'd like to submit a question for next time, you can send a voice recording to officehoursofprofgmedia.com. Again, that's officehoursofprofgmedia.com.
Or post your question on the Scott Galloway subreddit and we just might feature it on our next episode. Question number one.

**Jim** (1:52)
Hi Scott, it's Jim from Connecticut.
My question is how much you consider task consequences when you are weighing selling a stock position or repositioning your portfolio.
Specifically, I have a diversified stock portfolio worth about $3 million with a basis of about $1 million. For all the reasons you talk about on Prof G and Pivot, I'm extremely nervous about where the world and markets are heading and I would like to sell a large chunk if not all of my stocks at this point. For reference, I'm 63 years old and my stocks represent about 25% of my overall net worth. I also hold real estate, bonds and cash.
Though my gut is telling me to sell all or a large portion of my stocks, the state and federal capital gains tax of approximately 20% is holding me back. How do you factor capital gains in your decisions? Does it dissuade you from selling a stock or repositioning your portfolio? If my gut is telling me to get out, should I bite the bullet and pay the 20% exit fee and the gains? Appreciate you and your various pods. I'm a big fan and always appreciate your perspective. Thanks, Scott.

**Scott Galloway** (2:56)
Thanks for this, Jim. And my thoughts are mostly a function of where I've gotten it wrong. So what you're trying to do here, quite frankly, is time the market. And that's not a good idea because, well, I would argue the market is fully valued and I'll come back to that. Nobody knows. And when guys like me are saying the market is fully valued, it has a habit of going up 20 or 40 percent. It's very hard to time the market. And I think you will always want to be in the market.
Tax, I spent a lot of time thinking about tax. And I think it's important. And if you hold it, if you have a stock that's gone up and you're planning to sell, you need the cash and you've held it 11 months, you absolutely want to hold it 12 months such that you get long-term capital gains. And in general, one of the greatest wealth hacks in history is the ability to buy equities and let them compound tax deferred. And then if you want to do the trick of billionaires, if you need cash to fund your lifestyle, maybe you borrow against those stocks, not more than say 20, 30, 40 percent max to fund your lifestyle. And you can get a very good interest rate usually. It's a margin loan. And then ideally, the stocks keep going up and you get to compound off a higher base. There's sort of the life hack or the wealth hack of the rich is buy, borrow, and die. And that is you buy your stocks, you never sell them, you borrow against them. And then when you die, you get a step up basis and you get to sell them or put them into your trust and your kids inherit them and don't have to pay taxes on the gains. So now, you said something that really helped. And that is you gave me some color here around your situation. And that is you said you have a stock portfolio worth about 3 million, you're 63, and your stocks represent about 25% of your overall net worth. So I would argue that you're actually pretty well positioned. It sounds like you're a smart guy. First off, it sounds like you're successful. If you have 3 million in stocks and that's 25% of your overall net worth, you're not only very talented at what you do, but you've been very disciplined and smart and probably started investing early and think about this. And you have leveraged what is the most unreported investing hack.