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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: LAdria27 on March 08, 2017, 05:25:50 AM

Title: Would you commit to your current job ONLY to have early retirement?
Post by: LAdria27 on March 08, 2017, 05:25:50 AM
Hello dear MMMs,

Id like to hear some opinions of what you would do if you were in my situation.

I am 24, and work at a big sport retail company. The company is growing quickly, and we have the option to invest 25% of our early gross pay on stocks. (only people that works in the company can invest on it).

In my case, I can invest 6k every year (at my current pay).

The last 10 years the return was 15%.

At 12% interest, adding 6k every year, after 10 years I would have 117k gross (need to subtract 28% on all interest earnings). After 14 years 217k. With my other investments that would be enuff to retire for good.

Would you commit to your job, in order to retire early?
Title: Re: Would you commit to your current job ONLY to have early retirement?
Post by: chasesfish on March 08, 2017, 05:39:59 AM
How do you convert the stock into cash?
Title: Re: Would you commit to your current job ONLY to have early retirement?
Post by: Freedomin5 on March 08, 2017, 05:49:47 AM
I wouldn't, at least not the full 25%. That's like putting all your eggs in one basket. You're depending on this one company for your paycheque, and your retirement.

Of course, if you're putting the other 75% of your paycheque into index funds, then maybe, but it still seems rather risky to me.
Title: Re: Would you commit to your current job ONLY to have early retirement?
Post by: LAdria27 on March 08, 2017, 05:51:07 AM
How do you convert the stock into cash?

When I leave the company, I have up to 3 years to sell my stock. I can do it anytime since the company is the one who buy it.

Also, I didnt put it on the maths, but every year we get up to 1 full monthly salary depending on the early benefits of the company. This year It was only 25%, but last year it was 75%. I could already be 2 years early in my retirment, but thankfully MMM opened my eyes!
Title: Re: Would you commit to your current job ONLY to have early retirement?
Post by: LAdria27 on March 08, 2017, 05:52:46 AM
I wouldn't, at least not the full 25%. That's like putting all your eggs in one basket. You're depending on this one company for your paycheque, and your retirement.

Of course, if you're putting the other 75% of your paycheque into index funds, then maybe, but it still seems rather risky to me.

I take home 75% of my paycheck. I need to check vanguard index funds for europe.
Title: Re: Would you commit to your current job ONLY to have early retirement?
Post by: britton on March 08, 2017, 05:53:42 AM
I wouldn't do it for the full 6K. Maybe 1K or 2K tops.  Read about what happened to the people working at Enron, who were encouraged to reinvest in the company.

Here's a good article to sober you up http://www.businessinsider.com/10-years-later-what-happened-to-the-former-employees-of-enron-2011-12 (http://www.businessinsider.com/10-years-later-what-happened-to-the-former-employees-of-enron-2011-12)
Title: Re: Would you commit to your current job ONLY to have early retirement?
Post by: plog on March 08, 2017, 06:52:22 AM
Quote
only people that works in the company can invest on it...When I leave the company, I have up to 3 years to sell my stock. I can do it anytime since the company is the one who buy it.

Dear world: Please stop using the word "stock" for this type of investment. 

Sure, it may technically fit the dictionary definition of stock, just like what comes out of a rat's nipples can be called milk. But neither fit the actual definition of what people assume when the words stock or milk are used. If your company controls the market for this investment, it is not really stock.  If you can take this to a broker, deposit the shares in your account and trade on an open market then it is stock.

If you can only cash out via your employer, be via careful investing in this at all, much less such a large percentage.
Title: Re: Would you commit to your current job ONLY to have early retirement?
Post by: MrGville on March 08, 2017, 07:51:42 AM
Quote
only people that works in the company can invest on it...When I leave the company, I have up to 3 years to sell my stock. I can do it anytime since the company is the one who buy it.

Dear world: Please stop using the word "stock" for this type of investment. 

Sure, it may technically fit the dictionary definition of stock, just like what comes out of a rat's nipples can be called milk. But neither fit the actual definition of what people assume when the words stock or milk are used. If your company controls the market for this investment, it is not really stock.  If you can take this to a broker, deposit the shares in your account and trade on an open market then it is stock.

If you can only cash out via your employer, be via careful investing in this at all, much less such a large percentage.

This.  Got a good chuckle out of the rat analogy.