Comments on: Coworkers Excited About Investing

By: Craig

Craig — Mon, 15 Dec 2008 14:40:47 +0000

@bill Thanks for the tip. Any place you recommend reading basic info about it?

By: Generation Millionaire

Generation Millionaire — Sat, 13 Dec 2008 22:26:05 +0000

If we follow history – then increasing ayour contributions now is a good idea. We never know if we are really at the bottom of the bear market but dollar cost averaging in over time – historically has provided the best returns – in a well allocated portfolio. Rule of thumb with stock options – make sure not to over weight your portfolio with any individual stock. Remember Enron, World Com and Lehmans.

By: David

David — Sat, 13 Dec 2008 10:35:50 +0000

Congratulations on maxing out your 401K, and good thinking with selling your employee stock.

I agree now is the perfect time to invest more in stocks…I’m planning on opening an IRA soon.

By: Bill M

Bill M — Fri, 12 Dec 2008 03:53:41 +0000

The company I work for used to have all the goodies, stock options, matching, since the economy turned around everything is gone also. We were just notified that no more matching until economy recovers, options are on hold for only top performing.

@Craig – I would start with ETFs that track indexes, its a good way to start with a small amount of money, remember what will win is consistency.

By: Mike

Mike — Fri, 12 Dec 2008 02:08:37 +0000

This is great that you are contributing 50% of your salary to your 401k plan. Your “other income” is really helping you save responsibly for retirement!

I’m a little skeptical about putting too much money into company stock purchase plans, unless the employee gets a significant discount on the purchase price. Look at all of the individuals in this country who have lost significant amounts of their retirement plans due to having too much of their retirement portfolio in their own company’s stock. Case in point – ENRON.

You should definitely purchase company stock, especially at a purchase discount, but each individual should ensure that one company doesn’t encompass too much of his/her overall portfolio.

Great work, look forward to reading more.

By: Craig

Craig — Thu, 11 Dec 2008 20:55:25 +0000

For someone new and young looking to get involved, where would you recommend starting and researching, and how to actually get in the game? Individual stocks, mutual funds, index funds?

By: Miss M

Miss M — Thu, 11 Dec 2008 18:54:03 +0000

We get company stock as part of our employment, you don’t purchase it you get an annual alotment based on your salary. It’s a pretty big amount, I was shocked when I got my first statement. The company is employee owned, so that is your ownership share. But since it’s not public you can’t sell your stock. It’s a strange setup, it’s really a retirement account. To get paid out you have to be retirement age and no longer work for the company. If you roll it over into an IRA the distribution is tax free. We had a huge wave of retirements this year, the company stock price was up quite a bit. Since the stock market is down quite a bit, it was a great time for a lot of people to cash out and move the money into IRAs.

By: Kevin

Kevin — Thu, 11 Dec 2008 17:15:00 +0000

I came by to specifically reference the need to sell your employer stock due to the ingrained risks, but looks like you guys have covered it mostly.

My private company has a funky stock option reward, but it is based on exceedingly high performance and I don’t completely understand it. Unfortunately I haven’t earned any thus far!

By: Todd @ Prosperity Junky

Todd @ Prosperity Junky — Thu, 11 Dec 2008 16:27:40 +0000

It is interesting that people use a “stock increase” as identifier to invest more as if they have identified the bottom. In my opinion, things are on sale right now any which way you look at it. Yes it could go lower but so what if you are talking retirement investing. Yes the volatility is high but I don’t see that as a long term concern either. I believe if you have free cash that you have identified to invest, then get it into the market sooner than later.

By: Flexo

Flexo — Thu, 11 Dec 2008 16:02:50 +0000

Mr: TML: I try to take PT’s approach by selling the company stock as soon as possible. In my case, the stock is offered at a 15% discount off the lower of the beginning of quarter or end of quarter price. I don’t think it’s worth the extra exposure to the company — in addition to the salary/benefits/job security and small required company stock purchase in the 401(k) employer matching contribution — to wait for a more favorable long-term tax treatment. That being said, I still have some company stock I’m holding on to due to the market (and my company’s stock) being down… I think it’s a bad time to sell.

By: Mr. ToughMoneyLove

Mr. ToughMoneyLove — Thu, 11 Dec 2008 15:50:58 +0000

Unless the stock is heavily discounted or there is a significant match, investing in your employer’s stock increases your financial risk as compared to alternatives. If the company does poorly, the stock could tank and you could lose your job. If the employer’s stock is not publicly traded, the risk is even greater because management definitely will not be looking out for the interests of minority shareholders.

By: PT

PT — Thu, 11 Dec 2008 15:36:56 +0000

I love my Employee Stock Purchase Plan. I earned a nice 15% on it in 6 months last round. The 15% is guaranteed money, and since I flip the stock (sell, shortly after I buy) my risk is very low, and I don’t have too much invested in my own company stock. It’s truly my favorite company benefit next to my 401k.