Miscellaneous And Off Topic Subjects

[Tony G]

jeez.....

[entropy]

He killed his girlfriend this morning in front of his mom...

[Mike]

Rough season in KC.

[The Oracle]

Hey, question out there for those in the know. I just started witha new company, that offers a non matching 401k. They also have an ESOP, which we begin accruing immediately, but aren't fully vested until 5 years. I've done a little bit of research, and it seems like a pretty good deal, all things considered, taking into account the economy. Has anyone ever been a part of an ESOP program and have more insight on it? I'm meeting with our CFO in the next few weeks, but wouldn't mind an opinion in the meantime if anyone has any experience in one. TIA.

[Ghengis Jon]

Typically, a 401(k) has a company match of some level, although the number of matched plans has slightly decreased in the recent economy. In a sense, the ESOP takes the place of the match, funneling those potential funds back into the company instead. The company and its shareholders benefit because the shares used in the ESOP are typically (but not exclusively) bought on the open market. An important difference between the two plans is that your 401(k) is directed by you and the ESOP's fate is tied to one company's performance. Find the right balance for you and invest in both. Weigh the balance from the perspective of would you invest your personal funds into the company if you had no association with it? How do you think the stock will perform over the amount of time you plan to be with the company, in a worst case scenario? Look at past performance...yeah, yeah, no indication of future results...but a factor that can't be ignored. Lastly, what is the projected demand for the goods or services the company offers?

Personally, I favored the 401(k). I can't cry about how either has worked out for me, partly cuz my 401(k) also has a match. I got out of my ESOP after 10 years, which turned out wise as the company stock has flatlined over the last 10.

[The Oracle]

Thanks Jon. I was wondering what would be better, because my 401k lost quite a bit of money at my last job because of the economy, so I was hoping it would be good to have a little bit in both stocks and 401k. I'm admittedly not very savvy in knowing all the ins and outs of the market, 401k, stock, bonds, etc. hence the questions.

Appreciate it.

[Ghengis Jon]

Just remember that picking stocks is like spinning a roulette wheel at the casino. If red has come up 9 times in a row, should you bet on black?

Is your company private or public? That can make a heck of difference too.

[The Oracle]

It's a private company...how does that affect things besides the obvious?

[Hannibal]

On paper, is there any dollar value difference between the 401K and the ESOP?

I'd default to the 401K unless the ESOP is especially generous. Too many horror stories of people who lost both their jobs and their retirement when their company went belly up.

[The Oracle]

Well, we get the ESOP no matter what. Nothing to buy into or anything like that. It's an employee owned company. Or are you saying once I become fully vested I should switch it all over to the 401k?

[UMStan White]

I really don't know but don't forget about Enron and what happened to employees who had their retirement benefits invested in company stock.

[hack]

I believe in real estate in major cities unless you have the time to pay very close attention.

(for Stan: please note that despite my preference for real estate I have never lived in permanent structure)

[The Oracle]

I really don't know but don't forget about Enron and what happened to employees who had their retirement benefits invested in company stock.

Very true, which is why I won't put any of my money into the ESOP, only what it generates for me. All of my $$ will got to the 401.

[UMStan White]

"(for Stan: please note that despite my preference for real estate I have never lived in permanent structure)"

You live in a cardboard box under an overpass? (actually that would explain a lot about your posts)

[Optimus Prime]

Steven Spielberg just steamed into port, Miami Beach Marina. Now I'm clear across the Intracoastal Waterway (600 yds+ away) but this sucker is still huge!. 140-170 footer, steel hull & helio pad. Larger vessel than most of the world Navies.

Looks like he's gonna get the chance to read "The Prime's" manuscript this year after all, even at gunpoint if necessary, "Saving Private Ryan" my ass.

Wonder how his 401(K) is doing?