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Old 07-02-2014, 09:08 PM   #21
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This is why I'd never recommend doing it with one stock.

networth.jpg

Fortunate to have averaged in mostly from 2003 to 2007.

The difference from the lowest to the highest on the chart is about 85x.
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Old 07-02-2014, 09:10 PM   #22
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People I know who are truly rich (tens to hundreds of millions and above) got there with either inheritance or through IPO of a single stock, for which they had early "founder" shares. For the run of the mill early retiree, I see a good mix of dedicated savers (usually index investors), government pensions, and real estate (rental property) owners. I also know quite a few not-so good savers who are determined to make their fortune with a start-up stock option windfall who live mostly paycheck to paycheck as they move from one new company to another, hoping for the big score. These people I think are in for a later retirement with very modest means, maybe mostly Social Security and small 401k.
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Old 07-02-2014, 09:21 PM   #23
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I've made nice chunks of change with individual securities, but never made one big score that catapulted me to a life of riches. Oddly enough, my two best investments of size were both publicly traded warrants issued by two different companies that had the same CEO.
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Old 07-02-2014, 09:29 PM   #24
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No, I did it the old fashioned way, through 30 years of investing, mostly within 401k plans. However, I did get a nice 'parting gift' as my perpetually underwater stock options suddenly surfaced when the company was sold three months before my (early) retirement date. Didn't make me rich but it did add what amounted to one year's salary to my savings.
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Old 07-02-2014, 09:39 PM   #25
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Stock options from a startup tech company ended up being about 50% of my NW when the company was bought out and we received shares from the purchasing company. After the lockup period I was busy diversifying, 2001-2002. Although the market was pretty well crashed before I could/wanted to diversify, I was able to buy other tech stocks that looked solid to me and had gone down more than my stock. 2003 was a great year and everything ended well, and diversified. I switched to mutual funds when I wanted international diversification. No individual stocks now unless I want to play a little.

My best individual stock was Netflix, with a >10x gain. But only a small position.
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Old 07-02-2014, 09:50 PM   #26
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Only individual stocks since 1993. I have often had 10-15% in each stock, when I could not find enough high quality (IMO) stocks at good prices. This was especially true 2000-2003, when everything was in about 6 REITs at times. Since the last crash I have had more like 7-8% in each position.

I have never had a BIG home run, but have hit many singles. No stock options to speak of (1 grant worth about $10K, if I remember correctly).
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Old 07-02-2014, 10:02 PM   #27
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Rental real estate is pretty much the bedrock of our net worth. Over time it generated cash, which we have loaned out on investment property, which generates cash. After sitting out last year's massive stock gains we have been averaging in to the market this year. I'm not happy about it, but don't feel like fixing toilets for the rest of my life or paying too much for substandard work. We'll see how this whole index fund jazz works out - I DO like the idea of unrealized gains reducing our annual income a bit.
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Old 07-02-2014, 10:37 PM   #28
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Never worked for a smaller or start-up company where I would get stock options. Most of mine is earned by savings, small real estate appreciation and a modest inheritance from parents dying much too young to give the total a one-time boost. I would estimate 70% savings, 10% real estate and 20% inheritance as for breakdown of the total contribution from each.

I have gotten co. stock as the match to my salary savings in the past, but I have always invested in mutual funds and those co. stocks are long transferred to mutual finds now. So the easy answer for the orig question, is no I have not gotten rich on a single stock. In reality I do not currently think of myself as rich now either.

Maybe i need that hot stock tip, anyone want to help me out
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Old 07-02-2014, 10:37 PM   #29
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Not a single stock, but I was short the NYSE composite index (October 1987) futures as an early trader of the NYFE which enabled my ER at the ripe old age of 33.
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Old 07-02-2014, 11:09 PM   #30
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Didn't get rich on a single stock, but my Coca Cola gain helped pay off the house
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Old 07-02-2014, 11:53 PM   #31
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Nope. All of the megacorp stock options I received never panned out. And a big "get one share free for every x you buy" deal, well, I still have those shares. Near worthless now. Sometime I will sell them to offset a gain with the loss. The only equity investment I ever made that went the wrong way... way way wrong.
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Old 07-03-2014, 12:05 AM   #32
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Originally Posted by growing_older View Post
People I know who are truly rich (tens to hundreds of millions and above) got there with either inheritance or through IPO of a single stock, for which they had early "founder" shares. For the run of the mill early retiree, I see a good mix of dedicated savers (usually index investors), government pensions, and real estate (rental property) owners. I also know quite a few not-so good savers who are determined to make their fortune with a start-up stock option windfall who live mostly paycheck to paycheck as they move from one new company to another, hoping for the big score. These people I think are in for a later retirement with very modest means, maybe mostly Social Security and small 401k.
Yes, a lot of workers dream of striking it rich by working for the right startup. However, for each new venture that makes it big, there's perhaps 99 others that fail miserably. I know because I spent 9-10 years working as a founding member of two of them, first as a moonlighter, then as a full-timer. They failed miserably. I am doing OK now, but would have more money in a 401k and a pension too, if I had stayed at megacorp. I left megacorp mainly because I was fed up with the work environment, and not really because I was chasing that elusive pot of money.

But talk about investing, what's better than getting rich off 1 stock? It's getting rich off 5 or 10 stocks! Sure it takes a bit more work, but you will be more diversified than with a single bet. I have told how I grew my stash 3x in the period of 2003-2007. Since then, I have not been doing as well, because I got more conservative.

In the aftermath of the financial meltdown of 2008, many established companies saw their stocks hammered a lot harder than the S&P which lost a mere 50% or so. Here's an example: Caterpillar stock went from $83 down to $25, down to 30c on the dollar. How about Cummins, from $74 down to $21? Caterpillar closes at $110 and Cummins at $154 today.

I saw many stocks like CAT and CMI, and I did buy these and some others. However, I did not get enough, then sold them to book some profits way too soon. I was getting soft. In order to do better than average, one needs the audacity to stay a bit more concentrated to ride the gains a bit longer.
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Old 07-03-2014, 12:32 AM   #33
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Interesting question. I have worked at the same company for over 16 years. I worked hard, always maxed my 401k and ESPP, saved my options/rsus and lived way below my means. Over the years I harvested my options/rsus/ESPP and diversified into stocks/options/funds/real estate/etc. I am no longer in individual stocks/options, with the exception of company stock ~10% of nw. So in my case, nearly all of my nw was derived from one company/stock. However, my nw growth has come from gains across all asset classes.
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Old 07-03-2014, 06:25 AM   #34
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Not rich at all, but doubled my money in Magellan fund back in the 80's. Cashed it in to add to down payment on a house.
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Old 07-03-2014, 06:53 AM   #35
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Our plan was pretty boring with mostly low cost Vanguard and TR Price index and retirement funds. Before I made those changes in the first few years of investing I got burned with a couple of bad choices and realized was not cut out to play with my future financial stability. I never made more than a VERY mid 5 figure salary and my wife was about 10k less. But we did contribute the maximum to our 403b and Roth investments. Once the house was paid off by making 2X payments we contributed that money to taxable accounts. Now the taxable accounts are in what I believe to be good stable individual stocks and producing dividends.

Since we no longer contribute to any more investments the money that we now have to live on (including SS, small pensions, and dividends) is about 90% greater than what we lived on when we were working. Once RMD kicks in it will increase to 130%.

Dad impressed upon me 3 concepts that finally got my attention once I was in my 30's - The grasshopper and the ants, Pay yourself first, and The tortoise and the hare. It seemed to work.

Cheers!
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Old 07-03-2014, 07:32 AM   #36
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MO is by far our biggest winner. MO's dividend alone covers 75% of our yearly expenses. PM and XOM also helped out nicely.
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Old 07-03-2014, 07:44 AM   #37
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Had some stock options which I most held off exercising until the expiration year. Exercised the first in 2008 which netted me about 3k when the stock price had plunges 50%. Holding them allowed me to carry some into retirement which came in handy. Now though the SSA claims that they were earned in come. They appear on your W2 and there is nothing to indicate they were from prior years. The onus is on you to prove it wasn't earnings. They are backlogged (of course) so my payment will be withheld for the next 5 months while they review. Nice to have an emergency fund available.

I think the best thing for DW and I was the Enron fiasco which eventually allowed us to diversify our company stock. We both worked at the same Mega, and when we were allowed to diversify, company stock was over 30% of our portfolios. This allowed us to diversify which really helped us sleep better. Between stock, paychecks, and pensions we were way too invested in our company.
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Old 07-03-2014, 07:52 AM   #38
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Had some stock options which I most held off exercising until the expiration year. Exercised the first in 2008 which netted me about 3k when the stock price had plunges 50%. Holding them allowed me to carry some into retirement which came in handy. Now though the SSA claims that they were earned in come. They appear on your W2 and there is nothing to indicate they were from prior years. The onus is on you to prove it wasn't earnings. They are backlogged (of course) so my payment will be withheld for the next 5 months while they review. Nice to have an emergency fund available.
Did you exercise and hold, or are these shares you hadn't yet exercised? The difference between the grant price and the exercise price is income, since this is considered compensation. I don't think you have a case to say otherwise. But if you exercise and held (and you must've paid the difference in price at that point as income, or else you owe back taxes for that year), any increase in value since is capital gains.

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I think the best thing for DW and I was the Enron fiasco which eventually allowed us to diversify our company stock. We both worked at the same Mega, and when we were allowed to diversify, company stock was over 30% of our portfolios. This allowed us to diversify which really helped us sleep better. Between stock, paychecks, and pensions we were way too invested in our company.
I agree, just because some of us hit it big on a single stock doesn't mean that's the recommended path. There are a lot of failure stories to go against the success. Being overloaded on your company stock is a double whammy, because if it goes bad, not only do you lose stock value, but your job is likely in jeopardy.
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Old 07-03-2014, 07:54 AM   #39
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MO is by far our biggest winner. MO's dividend alone covers 75% of our yearly expenses. PM and XOM also helped out nicely.
I guess your mantra is "Thank you for smoking"?
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Old 07-03-2014, 07:58 AM   #40
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Between ESOP and RSU's I guess you could say it was a single stock. However once they vested I sold so as to not have all my eggs in one basket. While one stock may have provided the foundation for my wealth I would never have the guts to just leave it there and let one stock ride.
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