I was chatting with a friend about her company’s 401(k) plan a month or so ago. She mentioned that the match was allocated however you already had your money going. So hers was going to her Freedom 2040 fund.
As I opened my mouth to say what a great idea that was and how cool it was that they didn’t give it entirely in company stock, she continued, “I wish it was like X company where they gave it to us in company stock. I loved feeling like a part of the company.”
Since she’d already asked thoughts on 401(k)s, I felt comfortable continuing.
I didn’t put it quite as bluntly as I’d planned, but I said that I’d be happier with the way her current company was doing it, cited Enron’s employees and the collapse, mentioned that she already had her job invested in the company and I knew she was doing a great job of supporting it that way, etc.
Fortunately, she didn’t take offense, said she thought it made sense, and we went on to discuss company loyalty.
But it got me thinking about whether or not noble motives have any place in financial and retirement planning.
On the one hand, I want to say yes. I believe that an important part of finances is giving (though maybe you should give in other ways, like time, if your finances are tight). I also think it’s great to support groups you believe in with your business. And to avoid giving your business to those you disapprove of. In some ways your money is your vote.
At the same time, there’s a place for solid personal financial planning instead of other-focused planning. Maybe if companies were loyal and had their employees’ best interests at heart (and were sure to be stable), there’d be more of a place for investing with them. Maybe. But as it is, there’s no guarantee that the company won’t go under, leaving you without a job and decimating your retirement savings.
If you’re already working for a company you like, you can further support it by excelling at your job and coming up with good ideas for developing the company.
No matter how much I loved a company, I wouldn’t want to make my retirement dependent on their staying in business and doing well in the market. Even if it was APPL.
How do you diversify your retirement portfolio? Do you keep any company stock?