There’s a concept in economics called the marginal utility of money. It’s a fancy term but the idea is straightforward: each additional dollar delivers a little less impact than the one before it. The first million often changes your life. The fifth gives you more options. By the tenth or twentieth, the incremental gains matter far less than protecting what you’ve already built.
We’ve been thinking about this a lot lately, because we see a recurring pattern among those who’ve built real wealth, often through a single stock, a company or a liquidity event. The position that created their wealth becomes the position they can’t bring themselves to reduce. The price always feels too low. The timing never feels quite right.
What’s striking is that it’s rarely the outside investor who holds too long. It’s the founder. The early employee. The senior executive. The person who watched it grow from nothing and knows the business better than anyone. That conviction, the same one that created the wealth, imperceptibly becomes the thing that prevents protecting it. When the tide eventually turns, they’re often the last to recognize it.
Knowing the most about a company is not the same as knowing when to sell.
Markets have been unsettled lately, and that’s worth noting. Volatility itself isn’t the real risk for someone in your position. Volatility is temporary: prices go up, prices go down, and patient, thoughtful investors are usually rewarded for staying the course. The real risk is permanent loss of capital from excessive concentration when a single company’s fundamentals change. Volatility recovers. A stock that falls 80% because the fundamentals break, that’s a different conversation entirely. A conversation we very much hope to avoid.
The cost of being wrong here and the regret of letting the bird in hand fly away goes beyond dollars. It’s the security you’ve earned; the freedom you’ve created; the life you’ve planned. It’s the kind of mistake that creates lasting regret, not just for you, but for your family and the life you’ve built together. You don’t need the twentieth million the way you needed the first few. But you absolutely cannot afford to lose those foundational millions.
If you, or someone you know, is holding a large, concentrated position, we’d welcome the chance to talk. There are now multiple ways to reduce risk gradually and intelligently, often without forcing a single, large taxable event. We can walk through what makes sense for your individual situation.
Let’s connect before the market decides for you.
Sage Rhino Capital, LLC is a Registered Investment Adviser. This report is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Sage Rhino Capital, LLC and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Sage Rhino Capital, LLC unless a client service agreement is in place. Account statement from the custodian is the official record of holdings, balances and security values. Sage Rhino Capital does not provide tax advice.