Liquidity Planning: How Much to Sell, How Fast, and Why

By the time your SpaceX shares are liquid, you'll be facing a question that sounds simple but isn't: How much should I sell?

The answer most people give themselves in that moment is shaped by one of the following: what the stock is doing that week, what their colleagues are doing, a vague sense that they should sell "some" but not "too much," or a tax bill that feels too painful to look at directly. None of those are a sell plan. They're noise — and making decisions from noise is how you end up with regret.

This article is about building the actual plan. Not the exciting version where you model SpaceX going to $3 trillion. The real version — grounded in what you actually need, what risk you can actually absorb, and what a sensible pace of diversification looks like for your specific situation.

I'm going to walk you through the framework I use with every client who has a concentrated position heading into liquidity. It's not complicated. But it requires you to do something most people skip: think about your life first, and your stock price second.

The Right Order of Priorities

Before we get to the framework, I want to establish something that sounds obvious but gets violated constantly in practice.

The correct order of priorities for SpaceX liquidity planning is:

1. Your life plan and goals — what does this money need to do for you?

2. Investment risk — how much concentration can you actually afford to carry?

3. Tax optimization — how do you keep as much as possible of what you sell?

Most people reverse this. They start with taxes ("I don't want to pay capital gains"), skip investment risk entirely ("SpaceX is exceptional"), and never get to their life plan at all. The result is a plan built backwards — optimized for a 24% tax rate while ignoring the possibility of a 40% stock decline.

Taxes are real and they matter — I'll cover them thoroughly in Article 9 of this series. But a tax strategy that keeps you dangerously concentrated is not a win. A 24% capital gains rate on a $1 million gain means you keep $760,000. A 40% stock decline after you refused to sell means you lost $400,000 of that (and still pay a 24% tax on the remaining $600,000). The math is not close.

Life plan first. Investment risk second. Tax optimization third. In that order, always.

Step 1: Start With What the Money Is Actually For

The single most useful question I ask every new client with a concentrated tech position is this: What is this money for?

It sounds philosophical. It's actually the most practical question in the process — because the answer determines almost everything about your sell plan.

Common answers I hear from SpaceX employees:

• "Buy a house in the next 1–2 years"

• "Have the optionality to leave SpaceX if I want to without financial pressure"

• "Fund a startup I've been thinking about"

• "Make sure my family is financially secure regardless of what happens to SpaceX"

• "Early retirement — or at least the option of it in the next 5–10 years"

• "Generational wealth — I want to leave something meaningful"

Notice that none of those answers are "maximize my SpaceX exposure." That's not because SpaceX isn't a great company. It's because SpaceX stock is a means to those goals, not the goal itself. When you treat it as the goal, you end up holding long after the rational case for holding has expired.

Write down your actual answers before you do anything else. And be specific. "Financial security" is not an answer. "Have $2 million in liquid, diversified assets before I consider leaving SpaceX" is an answer. The specificity is what turns a vague intention into an actionable plan.

Step 2: The Three-Bucket Framework

Once you know what the money is for, you can build the structure around it. I segment every concentrated position into three buckets, and I use this framework with every client — it works because it explicitly names and solves the two fears that paralyze most people:

• Fear #1: I sell, and the stock doubles. (The regret of selling too soon.)

• Fear #2: I hold, and the stock craters. (The regret of not selling.)

Most approaches try to solve one of these fears. The three-bucket framework solves both simultaneously.

Bucket 1: Sell Now (or in the first available window)

This is the portion you sell at the IPO and in the first open window post-lockup, regardless of what the stock is doing that week. This bucket exists to immediately reduce concentration, fund important life goals, and eliminate the risk that you never sell anything. It also addresses Fear #2 directly — you've taken something off the table, so even if the stock drops significantly, you haven't lost everything.

• Typical range: 20–50% of holdings, depending on your concentration level and near-term cash needs. If you're not bullish on your company, can be 80%-plus

For SpaceX employees who are 70–90%+ concentrated in company stock, this bucket should probably be at the high end of that range — or higher. If your SpaceX equity represents more than 50% of your total net worth, you are by most definitions dangerously concentrated regardless of how exceptional the company is. The first bucket is about bringing that number down meaningfully.

Bucket 2: Keep Long-Term (intentional hold)

This is the portion you keep because you genuinely believe in the long-term upside and you can afford the risk. The key word is genuinely and the other key word is afford.

I recommend people keep no more than 10–20% of their total holdings in this bucket — and only if both of the following are true: (1) the rest of your financial plan is on track regardless of what happens to this portion, and (2) you have a written investment thesis and specific exit criteria (both upside and downside) for when you'd sell.

The investment thesis question is important. "I believe in Elon" is not an investment thesis. "I believe SpaceX's Starlink segment will reach $50B in annual revenue by 2030, which at a 15x multiple would value it alone at $750B, supporting continued appreciation from here" is an investment thesis. It can be wrong — investment theses often are — but writing it down forces you to be honest about what you actually believe vs. what you're hoping for.

Note: for those who check the above boxes of can afford and genuinely believe, a future article will dive into how to build a plan that intentionally keeps a large concentrated position

Bucket 3: Sell Over Time (systematic plan)

This is typically the most focused and structured portion — wherein sales occur on a deliberate schedule, typically over 12–48 months. There are three common approaches, each with different variables that are fixed vs. unknown — and understanding those tradeoffs matters when choosing which one fits your situation.

Share-count schedule (sell a fixed number of shares per period): You commit to selling a set number of shares every month or every open trading window over the plan period. It addresses Fear #1 by spreading your selling over time — roughly attaining the average price over the time period — capturing some of the upside if the stock appreciates and avoiding selling everything near the bottom if it declines.

• What's guaranteed: you will exit exactly the number of shares you intended, on the timeline you set.

• What's unknown: the dollar proceeds, because the price at each sale varies.

• Primary use case: This approach is straightforward to execute and psychologically clean — you know exactly what you're selling and when, regardless of what the market is doing.

Dollar-amount schedule (sell enough shares to generate a fixed cash amount per period): You commit to selling a specific dollar amount each period — say, $50,000 per open window — selling however many shares that requires.

• What's guaranteed: the cash flow is predictable, which is useful when you have specific financial needs tied to a calendar.

• What's unknown: the total number of shares you'll sell, because it varies with the stock price.

• Primary use case: You'll reliably take an exact amount of money off the table. And it allows you to be a bit more bullish on your company in your plan if that is desired (fewer shares sold if the stock increases), but also penalizes more if you're wrong (more shares requires to be sold if it declines).

Price targeting (sell when the stock hits a target price): You set (typically multiple) price target prices and commit to selling a specified number of shares if and when those prices are reached.

• What's guaranteed: if your targets are hit, you sell at the price you wanted and receive the dollar proceeds you planned for

• What's unknown: Whether or when the price targets get hit at all. If SpaceX never trades at your target price, nothing in this bucket sells.

• Primary use case: This approach gives you strong price certainty but zero time certainty. It works well as a complement to a share-count or dollar schedule, but as a standalone plan it carries real execution risk.

• Flag: This is much harder to implement if you're employed with the company and have to navigate blackout windows

All three approaches can work. Most clients use a combination — a share-count or dollar schedule for the majority of this bucket, with price targets layered on top for a portion they're willing to hold longer. The key regardless of which approach you choose: the plan is written down and executed consistently, not overridden every time the stock moves or a colleague says something about where it's headed.

Step 3: Size Each Bucket Correctly

How much goes in each bucket isn't arbitrary — it comes from your answers to Step 1, combined with an honest look at your current concentration level.

Here's the framework I use:

Factor 1: What is SpaceX as a percentage of your total net worth?

• Under 25%: you have some room to be more patient; Bucket 1 can be smaller

• 25–50%: meaningfully concentrated; Bucket 1 should be substantial

• 50–75%: seriously concentrated; Bucket 1 should be aggressive

• 75%+: dangerously concentrated; Bucket 1 may need to be the majority of holdings

Note: when calculating this percentage, count everything — vested shares, exercised options, unvested grants at current value, and your career exposure to SpaceX. Most people undercount by 30–40% because they only include what's already vested. If you plan to be at SpaceX for three more years and have significant unvested grants, those are SpaceX exposure too.

Factor 2: What are your near-term cash needs (next 12–24 months)?

Home purchase, ISO exercise costs, AMT payments, career transitions, business investments, family expenses — anything that requires real cash in the near term should come directly from Bucket 1. Don't plan to fund near-term cash needs from Bucket 3 selling. Markets rarely cooperate with your timeline.

Factor 3: What is your genuine risk tolerance? And how much do you truly need?

This is the honest one. If SpaceX dropped 50% from the IPO price within 18 months — which is not a tail risk, it's a historically normal outcome for newly public high-multiple companies — what happens to your financial plan? Can you still buy the house? Fund your life goals? Sleep at night?

If the answer is no, your Bucket 2 and 3 are too large. You only get once chance at this, and you want to do it in a way that minimizes regret (you'll never eliminate it).

And remember, wealth has a natural decaying curve to it. Losing 75% of your wealth is very likely to be far more painful than a 75% increase would be beneficial. Reducing theoretical upside by ensuring you keep a base amount is a trade worth making many times.

Factor 4: Your investment opinion of SpaceX (if any)

This can (and many times appropriately should) trump everything. If you're not a believer in SpaceX at its current valuation, it doesn't make sense to own it and you should plan to sell out of your holdings pretty rapidly. That's a perfectly fine plan, and the data heavily supports you on this. I have multiple clients where we planned to 100% exit a position within 6 months or less and diversify.

Step 4: Stress-Test Before Anything Is Liquid

This is the step almost everyone skips — and it's the one I'd argue is most important.

Before your shares are liquid, before the first sell window opens, model the downside. Not the catastrophic end-of-world scenario, but the realistic bad case: SpaceX IPOs at the $1.5T, but over 18 months declines 50%. That's not an extreme scenario — it's roughly what happened to many 2020–2021 IPOs, including companies with genuinely strong fundamentals.

At that price, what is your SpaceX position worth? What does your total net worth look like? Can you still execute your life plan?

If the answer makes you uncomfortable, that's useful information — and it's much more useful before you've made your decisions than after. The purpose of the stress test isn't to make you sell everything. It's to make sure that the plan you're building is one you can actually live with under bad conditions, not just good ones.

The questions to answer in your stress test:

• If SpaceX declines 50% from IPO price within 2 years, what is my net worth?

• At that level, can I still fund my top 3 life goals?

• What would I wish I had done differently — and can I do that now instead?

• Is the remaining Buckets 2 and 3 positions sized and timed appropriately for that downside scenario?

If you run this and your plan still feels right, you can proceed with confidence. If it reveals that your Buckets 2 and 3 are too large or lengthy, or your Bucket 1 is too small, adjust before the window opens — not after.

Step 5: Set the Pace You Can Actually Stick With

One of the most underappreciated aspects of a sell plan is behavioral stickiness. A plan that calls for selling 40% in the first window and the remaining 60% over 24 months is only functional if you actually execute it when the time comes.

In practice, I've seen people build excellent sell plans and then override them at the first sign of volatility. The stock drops 15% in the first month and suddenly "now is not the right time to sell." The stock jumps 25% and suddenly "I should hold more and sell less." Both of these feel rational in the moment. Neither is.

The antidote is to build a plan that's realistic about your own psychology:

• If you know you're prone to holding when the stock is down: make Bucket 1 larger — get the immediate selling out of the way before emotion gets involved.

• If you know you're prone to selling everything in a panic: make Bucket 3 systematic and rules-based. Limit orders, a financial advisor that keeps you accountable, auto-executed 10b5-1 plans; they all work.

• If you know you're prone to "just one more window": set a hard end date for your Bucket 3 selling — 18 months, 24 months — and treat it as a commitment, not a suggestion.

The best sell plan isn't the one with the highest theoretical after-tax outcome. It's the one you actually execute. A slightly less optimal plan that gets implemented beats a perfect plan that gets overridden every single time.

The Plan on Paper

Here's what a completed liquidity plan looks like in practice. This is a simplified example — your numbers will be different — but the structure is the model.

Hypothetical SpaceX employee:

• Total SpaceX holdings at lockup expiration: ~$10M (stock + options + next 2 years vesting)

• Other assets outside SpaceX: ~$400K (401k, savings)

• SpaceX as % of net worth: ~96%

• Near-term goal: buy a home ($1m; 50% down payment) in 18 months

• Career goal: option to leave SpaceX in 3 years without financial pressure

Bucket 1 (sell in first window, ~December 2026): $4.0M

• Funds home down payment with large buffer

• Reduces concentration from 96% to ~60%

• Represents roughly 40% of total company holdings

Bucket 2 (keep long-term): ~$2.0m

• Roughly 20% of current value

• Represents conviction hold — wants some upside participation if SpaceX continues to grow over the next decade

• Written thesis: "Starlink TAM supports continued growth; I believe post-IPO multiple expansion is plausible over 5+ years"

• Downside trigger: "If SpaceX drops more than 50% from IPO price, I'll reassess and likely reduce"

Bucket 3 (sell over 24 months, January 2027 – December 2028): $4.0M

• $500,000/quarter in each open trading window (~8 windows over 2 years)

• Creates predictable cash flow for investing into diversified portfolio

• Represents roughly 50% of total holdings

Stress test result: At 40% decline over 4 years from IPO, Bucket 2 worth ~$1.2m. Total net worth still above $5.5M after home purchase and taxes. Life plan intact. Acceptable.

What About Tax Optimization?

You'll notice I haven't talked about which lots to sell, how to minimize capital gains, charitable strategies, or advanced tools like exchange funds and long/short tax-aware SMAs. That's intentional — tax optimization comes after you've built the investment framework, not before.

The right question is: given my sell plan, how do I execute it as tax-efficiently as possible? Not: given my tax situation, how does that constrain my sell plan?

That distinction sounds subtle but it's actually the difference between a plan that serves your life and a plan that serves your tax return.

Article 9 in this series — Tax-Smart Diversification: The Real Tools That Can Improve Outcomes — covers all of it: lot selection, tax-loss harvesting, charitable strategies, exchange funds, and when advanced tools actually add value vs. add complexity. Once your sell plan is built, that article is the implementation guide.

The One Thing That Makes All of This Easier

A written plan and an accountability partner (I'm biased, but I know advisors are great at this :)

Not a mental note. Not a conversation you had with your spouse. A written document that specifies, in concrete terms: which bucket gets what, in which windows, from which lots, triggered by what schedule.

When the stock moves 20% in a week, you will feel strong pressure to override your plan. When colleagues are all saying "just hold, it's going higher," you will feel that too. A written plan doesn't guarantee you won't override it — but it creates a pause. It makes you consciously decide to deviate rather than drift. And in my experience, that pause is enough most of the time.

The best time to write the plan is now, before the window opens, before the pressure arrives. The second best time is the day before the lockup expires. There is no third best time.