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w00t!
Chris G:
--- Quote from: shardian on June 29, 2007, 12:27:49 pm ---I get a 5% matching 401k, but the real bread & butter of where I work is called an ESOP - Employee owned stock program. It outgains the 401k like 4-1.
--- End quote ---
What do you mean by "It outgains the 401k"? Are you severly limited in terms of what you can invest your 401k dollars in? Even if you are, there's no guarantee that the stock of your company is going to consistently outperform even a crappy mutual fund. Even factoring in a huge discount on the ESOP, there's just way more risk over the long haul. What am I missing?
shardian:
--- Quote from: Chris G on June 29, 2007, 01:02:50 pm ---
--- Quote from: shardian on June 29, 2007, 12:27:49 pm ---I get a 5% matching 401k, but the real bread & butter of where I work is called an ESOP - Employee owned stock program. It outgains the 401k like 4-1.
--- End quote ---
What do you mean by "It outgains the 401k"? Are you severly limited in terms of what you can invest your 401k dollars in? Even if you are, there's no guarantee that the stock of your company is going to consistently outperform even a crappy mutual fund. Even factoring in a huge discount on the ESOP, there's just way more risk over the long haul. What am I missing?
--- End quote ---
ESOP is free. ;)
ChadTower:
--- Quote from: shardian on June 29, 2007, 12:27:49 pm ---I get a 5% matching 401k, but the real bread & butter of where I work is called an ESOP - Employee owned stock program. It outgains the 401k like 4-1.
--- End quote ---
When I was at Cisco, that is where the money was... people would buy at $50 through the program but by the time the price period was over it would be like $175 - they'd buy, it would split and come back to $100, and they'd sell at something like a 10x profit. All in a few months.
Then the crash happened and all of our ESOP holdings that hadn't been sold yet, that we had dropped substantial coin on, were worth less than 10% what we paid. Almost instantly.
Don't invest in your employer. If the company goes south you get hit from multiple angles.
Chris G:
--- Quote from: shardian on June 29, 2007, 01:05:32 pm ---ESOP is free. ;)
--- End quote ---
Ok, so it's not an either/or decision of where to invest your money - they're just giving you stock. Nice! Most places' ESOP's are just a buy-at-a-discount type thing.
shardian:
By free, I mean that the CEO decided to "give" the company to the employees when he retired. We don't buy anything. All of the excess profit goes into stock for us. Since the ESOP was set up, business has skyrocketed, thus the ESOP has grown immensely.
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