401k and stock options

[00bolt]

starting a new job next month and this is first time iv had an job where the employer offers stock options. ill be transferring my 401k over to the new one, but what is the norm here? obviously i want to max what employer will match on 401k, but what do most people do stock wise?

iv never really invested too much in stocks in my life, so im not real sure of the advantage of buying as an employee vs just joe blow buying the same stock not working there.

[Hmbre97]

http://en.wikipedia.org/wiki/Employee_stock_option

[talisman]

If you're getting divorced I'd recommend cashing whatever you've got out and "gifting" it to a family member that isn't a piece of crap. Otherwise half of it is likely to go bye bye.

[ARIX]

He does have a legit question. I watch my stuff go up and down every day and have wondered what others are doing.

[bcoop]

If you have the time to manage it, and a little knowledge, manage it yourself. The company we use, has this "managed" account, where they move your funds around for you based on trends and risk. It's the most expensive plan they offer (and it comes out of your money), and one of the worst returns out of all of them. By most expensive, it's like $24 per $1000 vs the $3 per $1000 in this other fund, and 3-4 points higher in average returns. Where you put your money should also be based on your age, other investments, etc.


I don't know how true this really is, but I have heard that most regular people try to meet, or beat the S&P. If you can beat it, you're ahead of the game. Hopefully someone with actual knowledge on this can chime in. I'd like to learn more.

[MattB]

slow99, Al P, sc281 to the rescue!

[sc281]

starting a new job next month and this is first time iv had an job where the employer offers stock options. ill be transferring my 401k over to the new one, but what is the norm here? obviously i want to max what employer will match on 401k, but what do most people do stock wise?

iv never really invested too much in stocks in my life, so im not real sure of the advantage of buying as an employee vs just joe blow buying the same stock not working there.

What exactly do you mean by stock options? Is the company giving it to you as part of your compensation?

You are more than likely looking at an espp, employee stock purchase plan, where you purchase the company stock at a discount.

Edit: From reading your post, Im pretty sure I'm right. Th advantage is a discount on the stock price vs buying as a non employee, typically 5-10%. I'd do some research into the company before signing up. As long as the company isn't flirting with bankruptcy, it is usually a good deal.


Due to my firm's policy, I cannot give specific advice on asset classes or specific investments on social media, so I'll just give you a push in the right direction.

As far as the 401k. Do not roll it over into your new job's 401. 401ks typically have higher fees and fewer fund choices than an IRA, individual retirement account. Sit with a couple financial advisors, preferably one with a cfp designation (Certified Financial Planner), have them do a thorough profile and give advice based on your personal needs, objectives, and risk tolerance.

Run their names and their firm if it is a small outfit through http://brokercheck.finra.org/Search/Search.aspx to make sure they haven't had any complaints or actions by customer or regulatory agencies. Choose which one seems to have your best interests and goals in mind, and work with them. They will do all the paperwork necessary to roll ypur 401k over to them, so no worries there.

Congrats on the new gig.

[TexasT]

I would deffinately look into buying what you can at a discount if it is an esp. If you hold them a year the tax on the gains is less, depending on the tax laws that year. I generally use mine as a self given bonus to buy Christmas gifts. Kind of good for me as I have a hard time saving money.

[Roscoe]

As far as the 401k. Do not roll it over into your new job's 401. 401ks typically have higher fees and fewer fund choices than an IRA, individual retirement account. .

that's no lie.... You can get screwed on old 401ks. I consolidated 3 after 2 of them were sucking and there are far better options in an IRA.

[Captain Crawfish]

i find it difficult to pay someone to roll dice for me in the world casino. the only way you will ever learn is to do it yourself.

[00bolt]

Okay thanks guys on the 401k advice.
And you were right, its an option to buy company stock. Its with Wells Fargo and I dont know much about stocks, but I assume now is a good time as the mortgage side of WF is really growing big. I just got on as an Underwriter and I know my location alone has hired something like 40 UWs, but even friends in Florida are going to WF

[SMEGMA STENCH]

You wanna roll it all over into a roth ira.

[FreightTrain]

I wouldn't put much of any money into any company stock that I worked for especially Wells Fargo. Their stock price hasn't really moved in the last 5 years and I'd bet money they're not out of the woods yet. We see another recession anytime soon and they will get hit hard again. I invest 2k to 3k a year in my company stock just to have some laying around. It's split once and will probably split again very soon. The main reason I do this is because after I retire with over 40 years of service I plan on cashing it all in and it will be a nice going away present.

[Broncojohnny]

You wanna roll it all over into a roth ira.

Good idea, so he can pay taxes on it, we all know that is how you get ahead.

[Roscoe]

Good idea, so he can pay taxes on it, we all know that is how you get ahead.

lol, I didn't catch that.

roth > rollover..... wait... no .....