How High-Earning Women Should Diversify Investments

DEFINITION

Concentration Risk

The danger of having too much of your net worth tied to a single stock, sector, or employer. Tech workers with significant RSU grants often have 30-60% of their liquid net worth in one company without realizing it.

DEFINITION

Alternative Investments

Assets outside traditional stocks and bonds — real estate, private equity, commodities, REITs, hedge funds, and private credit. Higher minimums but lower correlation to public market volatility.

DEFINITION

Asset Allocation

The percentage breakdown of your portfolio across asset classes. A 60/40 stock/bond split is the textbook baseline; most high earners with long time horizons and multiple income streams can tolerate more equity exposure.

The Diversification Problem High Earners Actually Have

Standard diversification advice — “hold a mix of stocks, bonds, and cash” — was written for someone with a 401(k) and a savings account. It doesn’t account for the portfolio that most high-earning tech women actually have: a 401(k) invested in target-date funds, two or three brokerage accounts, employer stock from active RSU grants, ESPP shares, and maybe a primary residence.

When you add all of that up, the picture often looks like this: 50-70% of liquid net worth in employer stock, 20-30% in US equity index funds that overlap heavily with that same employer, and a real estate stake that’s entirely illiquid and undiversified by geography. International exposure is often near zero. Alternatives are nonexistent.

This isn’t a failure of discipline — it’s a structural outcome of equity compensation. RSUs vest in your employer’s stock. ESPP gives you more of the same. You can’t control what asset class your compensation arrives in. You can control what you do with it after it vests.

Why Equity Compensation Creates Concentration Risk

When an RSU vests, it lands in your brokerage account as ordinary income and employer stock simultaneously. The tax is paid, but the stock remains. Most people’s instinct is to hold it — the company is doing well, you understand the business, and selling feels pessimistic about your own employer.

The result is that many tech workers with five-plus years at a large company have 30-60% of their liquid net worth in that single stock. This is concentration risk at a level that financial professionals consider genuinely dangerous. A company that loses 40% in a downturn — not unusual even for strong businesses — eliminates years of accumulated wealth.

The standard recommendation is to keep any single stock below 10-15% of liquid net worth. For most people with significant RSU grants, getting there requires a systematic selling plan: sell a set percentage on each vest, redirect proceeds to diversified assets, and track your concentration across all accounts so you have an accurate picture.

Asset Classes Worth Targeting

International equities. US equities have outperformed international for the past decade, which has led most US investors to under-allocate globally. Historically, international and domestic equity returns have been cyclical. A 15-25% international allocation through low-cost index funds adds geographic and currency diversification without adding complexity.

Real estate. Real estate has historically provided inflation protection and returns uncorrelated with public equity markets. Direct ownership (primary residence, rental properties) is the most common route, but REITs give exposure with daily liquidity and no landlord responsibilities. REIT index funds are available in most 401(k)s and taxable brokerages.

Fixed income. High earners with long time horizons and stable income often hold too little fixed income, reasoning that they can tolerate volatility. This is partially correct, but fixed income also serves as a rebalancing asset: when equities sell off, bonds hold value (or rise), giving you something to sell to buy equities at lower prices. A 10-20% fixed income allocation isn’t about safety — it’s about having dry powder when markets get dislocated.

Alternative investments. Private equity, private credit, and hedge funds offer genuine low-correlation returns, but they come with real tradeoffs: high minimums, multi-year lock-ups, limited liquidity, and complexity. For most people, this is a 5-10% sleeve of the portfolio at most, and only after liquid accounts are fully funded.

Building a Diversification Plan

Start by knowing where you actually stand. Before any allocation changes, you need a complete picture of every account you hold — which is harder than it sounds when equity comp is spread across multiple brokerages and platforms. A wealth aggregator that shows concentration by ticker across all accounts is the most useful tool here.

Then decide on a target allocation. A reasonable starting point for someone in their 30s or 40s with a stable high income and long time horizon: 45% US equities, 20% international equities, 15% real estate, 15% fixed income, 5% alternatives. Adjust based on your actual risk tolerance, timeline, and how concentrated your equity comp is.

Finally, build a selling plan for your employer stock. Set a rule — “I sell X% of each RSU vest and redirect to my target allocation” — and automate it. The specific percentage matters less than having a rule at all.

Tracking the Full Picture

The challenge with multi-asset diversification is that your allocation is spread across many platforms that don’t talk to each other. Your 401(k) is at Fidelity. Your brokerage is at Schwab. Your RSUs are at E*Trade. Your real estate equity is nowhere, because it doesn’t have an app.

Seeing your actual allocation requires pulling all of this together. That’s what Thalvi is built for — connecting brokerages, retirement accounts, real estate, and crypto into a single view so you can see concentration risk across your whole portfolio, not just one account at a time.