To be clear though, you’re not doing anything wrong by doing it your way. There are probably lots of ways to do it correctly.
If there’s one thing I’ve learned from a career in the field of personal savings, investments, and financial wellbeing, it’s that if you are doing ANYTHING AT ALL in terms of budgeting, expense management, and thoughtfulness about the implications of your spending choices, then you are in the top 10% if not 1% of people in this area. By far the most common discussion in personal finance is this one:
Subject: I desperately need help. I have runaway credit card debt. I can’t sleep at night because I am worried about money. I can’t afford things that other people have. I don’t know what a stock or a bond is.
Advisor: Do you have a budget?
Subject: No I do not. Can you tell me what stocks to buy?
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The worst outcome for saving is what will happen to most, the burgeoning end of life care industry will bleed you of whatever you have. Just imagine 90% of your retirement savings going to fund a sociopathic health care executive’s salary and plan appropriately.
I will absolutely jump off a bridge if I am diagnosed with a debilitating but not immediately fatal condition likely to slowly bankrupt me.
this is definitely one of the interesting parts of life in usa #1. getting to spend hundreds of thousands on end of life care. trainspotting monologue comes to mind
I’d be too scared that I’d be one of the 2% or whatever who live. Now I’m even more messed up and probably in tons of pain.
Ah, the CanadaMatt illness protocol.
This discussion reminded me of a street interview I saw recently with regular Tokyo Japanese working people. On average, respectable mid-career professionals reported making around $2.5-3k per month, while younger part-time workers said they were making around $1.5-2k.
And yet most said that it was plenty to live on and they were able to save a bit as well. Wages are famously low here in Japan, and yet people seem to be getting by just fine.
Affordable healthcare & housing are glorious things.
Underperforming a 60/40 fund by 25% LOLOLOL WHAT A FUCKING FRAUD
Any institutional manager that has money at Bridgewater should legit be instantly fired.
(To be clear Bridgewater didn’t do 25% worse than a 60/40 fund, it lost 8% while the 60/40 fund returned 17%).
Ray was the one guy out of 1,000 who flipped heads 10 times in a row. A complete joke and piece of shit human.
For instance, in San Francisco, 0.3% of homes for sale in 2023 were affordable for the typical household — down from 0.4% in 2022, marking the smallest decline recorded by Redfin. Detroit, Los Angeles, Boise, Idaho, and Oakland, Calif. — already largely unaffordable — also saw minuscule change.
Detroit???
Many people are saying the great city of Detroit is on the rise again
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So my company 401k, matches 3% but half the match is in company stock.
Right now about 17% of my 401k is company stock, it was up very high but took a big hit last year missing earnings twice. So it’s about 60% of what it was a year ago? I expect it to go up in the near future but in general how do I play this? I can sell it all and put it in the rest of my diversified plan, how much should I keep if any?
I probably wouldn’t keep any, or just keep a small % if you’d feel terrible seeing it go nuclear.
Not sure there’s a textbook advice but I would sell as much as possible unless there’s some vesting issue or penalty for selling and get it into the diversified allocation.
Owning stock in your employer means that, if something really bad happens (like your upper management is committing fraud or there is a major litigation against the company), you could lose your job and your savings at the same time which seems risky.
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Yea I think that’s the textbook concern
Concentrating your human capital and financial capital is not recommended because it is exposing you to the idiosyncratic (and uncompensated) risk of one firm. Companies often put things in place that make it difficult to avoid this (such as vesting schedules). If possible, it should be avoided.
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It’s all vested immediately so seems I can do whatever now, annoying to have to constantly move it over but whatever I guess. I asked if I could change how I got the match and was told no.
It’s already a huge company so it’s not like I’m expecting it to go up 10x or something
Your 401k provider should allow you to set up an automated quarterly rebalance where you can zero out the company stock component. That’s how I would handle it.
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