Author Topic: Don't put all your money into your companies stock  (Read 1502 times)

BTDretire

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Don't put all your money into your companies stock
« on: December 05, 2017, 01:07:48 PM »
Here's why.


[Mod Edit: Merged duplicate posts.]
« Last Edit: December 06, 2017, 08:49:14 PM by arebelspy »

FIRE Artist

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Re: Don't put all your money into your companies stock
« Reply #1 on: December 05, 2017, 01:26:29 PM »
yep,  my system was to take advantage of the discounted stock purchase and cash it in as soon as the purchase was posted. 

marty998

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Re: Don't put all your money into your companies stock
« Reply #2 on: December 05, 2017, 01:38:07 PM »
Companies don't just simply grow from $10m to $50 billion revenue overnight. There is always a smoking gun -  dividends and cash flow, or lack thereof.

Some of the executives don't have a choice - they're forced to accumulate large stock positions in the companies they manage (alignment of interests). However there is always a choice with personal money, there's no requirement to "double down" as such and tie up everything you have in there.

Slee_stack

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Re: Don't put all your money into your companies stock
« Reply #3 on: December 05, 2017, 01:43:15 PM »
I've reduced my own company stock allocation.

That said, I still keep a healthy % in it....about 7-8% of my NW.

I hold my ESPP and RSUs but pay the latter's taxes with the issued stock.

Its all about how you feel about your company.  I'm relatively bullish on mine, and see the $ investment amount I have in it as my 'play' money.

Of course I'm primarily a peon so I never need worry about my compensation being heavily weighted in company stock.  Perhaps a concern for a more executive type of person who gleans a high % in stock...


moof

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Re: Don't put all your money into your companies stock
« Reply #4 on: December 05, 2017, 01:57:37 PM »
Don't gamble with money you can't afford to lose.

one piece at a time

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Re: Don't put all your money into your companies stock
« Reply #5 on: December 05, 2017, 01:57:40 PM »
Wait on, he was already 45 but "on his way to early retirement". Were they building a time machine?

MrMoogle

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Re: Don't put all your money into your companies stock
« Reply #6 on: December 05, 2017, 02:18:59 PM »
Wait on, he was already 45 but "on his way to early retirement". Were they building a time machine?
He had an 8-figure portfolio, he should have pulled the parachute long ago.

DumpTruck

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Re: Don't put all your money into your companies stock
« Reply #7 on: December 05, 2017, 02:45:45 PM »
This is why I consistently recommend investing in physical grain instead of smoke and mirrors stock markets!

soccerluvof4

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Re: Don't put all your money into your companies stock
« Reply #8 on: December 05, 2017, 02:54:59 PM »
If the guy was that high up to be making 8 figures? he should of known better. Something doesn't add up here. And yea, why didnt he get out well before that.
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Dave1442397

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Re: Don't put all your money into your companies stock
« Reply #9 on: December 06, 2017, 05:28:57 AM »
If the guy was that high up to be making 8 figures? he should of known better. Something doesn't add up here. And yea, why didnt he get out well before that.

He might not have been able to cash out at the time. A lot of these stock awards come with strings attached, and may not vest for years.

boarder42

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Re: Don't put all your money into your companies stock
« Reply #10 on: December 06, 2017, 05:42:06 AM »
yes he likely wasnt close to vested if they were offering 6-1 matches thats an insane match.
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esq

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Re: Don't put all your money into your companies stock
« Reply #11 on: December 06, 2017, 08:07:44 PM »
I used to sing barbershop with a lovely lady who one day disappeared from our chorus. Several years later I ran into her. Her husband had been a pilot with Enron ever since the BelNorth days, and on Ken Lay's advice and promises, they'd put all their retirement money into Enron stock. They lost over a million dollars instantly.

They had a very strong faith and church affiliation, and that was a big help to them. In their reflection, they were a bit wistful, but refused to let those circumstances ruin their life.
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Wings5

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Re: Don't put all your money into your companies stock
« Reply #12 on: December 06, 2017, 10:48:02 PM »
My first real job after college was at a Fortune 500. The stock price was very low and many of the older folks who I worked with were lamenting the fact they weren't retired yet. They had most of their retirement in company stock and they had not reached their number.

They had accepted a significant amount of risk by tying their retirement and current income to a single company's performance. I decided early on that I would not buy any company stock. The company stock has increased by a factor of 15; I've lost out on close to $250,000 in gains.

Yes, it would be nice to have that extra in the bank, and I chuckle to think about it. But, after seeing my coworkers who wanted to retire sit and work for an extra decade, I'm still glad I made the choice I did. I've started to look closer at the Employee Stock Purchase Plan, but only as a quick-sell strategy.

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LeRainDrop

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Re: Don't put all your money into your companies stock
« Reply #13 on: December 06, 2017, 11:02:00 PM »
Ha!  I saw this thread title and, before even clicking to open, immediately thought, "Didn't we learn all that 15+ years ago from Enron?"  Disaster for the employees who didn't realize any better.

Retire-Canada

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Re: Don't put all your money into your companies stock
« Reply #14 on: December 07, 2017, 08:20:50 AM »
Wait on, he was already 45 but "on his way to early retirement". Were they building a time machine?

Before 65 is early for "normal" folks.