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Old 07-13-2014, 07:46 PM   #21
Recycles dryer sheets
cranberryjoe's Avatar
Join Date: May 2013
Location: Western US
Posts: 103
I agree with the others: at your age you're too conservative with cash and too aggressive with company stock.

My story about company stock: I was buying company stock with 30% of my maxed out 401k contribution each month, plus 10% of my salary was buying company stock in an ESPP. I also held a healthy amount of stock options. I liked how my 401k balance was growing and wasn't paying attention to rebalancing, so after the tech run up in the late 90's my 401k was more than 50% company stock . Then it all came tumbling down. Company stock lost >95% in a couple of months. It wasn't pretty.

Fortunately I kept my job (transferred to a spinoff company as the parent company imploded) and eventually recovered. Two of my co-workers were not so lucky. Both of them held 100% of their 401k in company stock. According to rumors they both had 7 figure balances that dropped to 5 figures. One of them was laid off after the crash, so he lost 95% of his 401k and 100% of his salary. Several years later he still didn't have a job. The other kept his job but never recovered.

You may be "expecting" 3% appreciation and 10% yield. Well, I was expecting my company stock to continue its high growth and dividend yields. As they say, past performance does not guarantee future results.

Now the fun begins
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Old 07-15-2014, 09:17 AM   #22
Recycles dryer sheets
Join Date: Jul 2013
Posts: 302
Originally Posted by atfourty View Post
Here is my current situation :
Age 33, DW 30.

Current Assets :

Cash : 120K
Investments (Retirement + Non-Retirement) : 340K
Home Value : 220K
Company Stock : 200K

Current Debt : 155K; ( Remaining Home mortgage)

Current Income (Combined) = 155K (Gross)

10 year plan :
Cash : 120K + 50K/yr*10 = 620K
Investments : 340K + 30K/yr(invested @ 6%/year) = 1.2MM
Home Value = 325K (220K, appreciating @ 4%/yr for 10 years)
Company Stock = 268K ( 200K, appreciating @ 3%/yr for 10 years)
115K ( Remaining Home mortgage)

Can you please critique this plan, and let me know especially your thoughts on my assumptions - which i have tried to be conservative on ?

  1. there's no way to know how your investments will perform; using average return X number of years is not a useful computation
  2. similarly, there's no way to know how/if your home will appreciate in value
  3. you have way, way too much in cash
  4. you have way, way too much in company stock

I think you should spend some time educating yourself on the basics of investing. This is an excellent place to start:

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