Originally Posted By: javacontour
Originally Posted By: Mr Nice
I like speaking to colleagues about investing money and their financial future, some view a 401K plan as gambling their money cause its affected by the ups and downs of the stock market.
I always get a chuckle when they tell me their financial advisor recommends another way to save for the future. We get a nice company match with our 401K and they are missing out on free money.
Yep, I have my kids putting in enough to get the max company match in their 401(k)
Advised them to pick S&P 500 index funds. One gets his company match in company stock. Better than nothing, but don't put his contributions in one basket. Think Enron employees encouraged to buy Enron stock in their 401(k) instead of other investment vehicles. Only those who put everything in Enron lost it all. Those who only took the match in Enron stock only lost the match portion.
My youngest turned 18 in October, is still in High School and is investing in her 401(k) to get the full match...
The only one who isn't investing is the middle child. She's on a year long project called City Year. They don't pay her much, but paid off some of her student loans. She had to borrow for her last year of school.
I was once part of a company ESOP (employee stock ownership plan).
I really, really disliked it.
We couldn't cash out until retirement. We took stock in return for a wage cut. We continued to accrue shares based on pay. But it subjected both my paycheck and my portfolio to the competence (or lack thereof) of the management team at UAL.
At one point, I had over 1200 shares of United. And at one point, the stock was trading at $95/share. During bankruptcy, the fiduciary liquidated our shares at 73 CENTS/share. The resulting check, less withheld taxes, was beer money.
Never, ever have your net worth and your paycheck be tied to the fortune of one company.
Never.
Originally Posted By: Mr Nice
I like speaking to colleagues about investing money and their financial future, some view a 401K plan as gambling their money cause its affected by the ups and downs of the stock market.
I always get a chuckle when they tell me their financial advisor recommends another way to save for the future. We get a nice company match with our 401K and they are missing out on free money.
Yep, I have my kids putting in enough to get the max company match in their 401(k)
Advised them to pick S&P 500 index funds. One gets his company match in company stock. Better than nothing, but don't put his contributions in one basket. Think Enron employees encouraged to buy Enron stock in their 401(k) instead of other investment vehicles. Only those who put everything in Enron lost it all. Those who only took the match in Enron stock only lost the match portion.
My youngest turned 18 in October, is still in High School and is investing in her 401(k) to get the full match...
The only one who isn't investing is the middle child. She's on a year long project called City Year. They don't pay her much, but paid off some of her student loans. She had to borrow for her last year of school.
I was once part of a company ESOP (employee stock ownership plan).
I really, really disliked it.
We couldn't cash out until retirement. We took stock in return for a wage cut. We continued to accrue shares based on pay. But it subjected both my paycheck and my portfolio to the competence (or lack thereof) of the management team at UAL.
At one point, I had over 1200 shares of United. And at one point, the stock was trading at $95/share. During bankruptcy, the fiduciary liquidated our shares at 73 CENTS/share. The resulting check, less withheld taxes, was beer money.
Never, ever have your net worth and your paycheck be tied to the fortune of one company.
Never.