Posted: 6/25/2011 10:24:20 AM EDT
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Someone I know works in a warehouse for Kmart. They had a few thousand dollars saved up in their 401k. When Kmart went bankrupt, they lost nearly the entire 401k. How is this possible? The only viable explanation I can think of is that Kmart told the investment firm to put the majority of funds into Kmart stock. Someone please explain. Thanks. ETA: Man of the house got home and explained it. Kmart only matched 401k funds invested in Kmart stock, so that where everyone put it. So the working man is more or less forced to invest in Kmart. CEO runs it under, gets a golden parachute, and working man gets the shaft. |
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Quoted: Every 401k I've had you had the option of how you wanted the investment to be split up. If he chose to put almost everything into the company stock he was a fool. He learned a hard lesson. This was in the late 80's. Update in OP, company only matched investments in Kmart stocks. |
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Every 401k I've had you had the option of how you wanted the investment to be split up. If he chose to put almost everything into the company stock he was a fool. He learned a hard lesson. This was in the late 80's. Update in OP, company only matched investments in Kmart stocks. While they incentivized the investment in company stock they didn't by any means force it. Life is full of lessons to be learned, some of them even have little reminders like "don't put all your eggs in one basket." |
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Quoted: Quoted: Every 401k I've had you had the option of how you wanted the investment to be split up. If he chose to put almost everything into the company stock he was a fool. He learned a hard lesson. This was in the late 80's. Update in OP, company only matched investments in Kmart stocks. matching is a benifit. not a right. he took a risk by going for k mart stock. sucks it didn't work out |
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Someone I know works in a warehouse for Kmart. They had a few thousand dollars saved up in their 401k. When Kmart went bankrupt, they lost nearly the entire 401k. How is this possible? The only viable explanation I can think of is that Kmart told the investment firm to put the majority of funds into Kmart stock. Someone please explain. Thanks. ETA: Man of the house got home and explained it. Kmart only matched 401k funds invested in Kmart stock, so that where everyone put it. So the working man is more or less forced to invest in Kmart. CEO runs it under, gets a golden parachute, and working man gets the shaft. When my company went bankrupt I had $50,000 of 401k match. It was in company stock and I was not allowed to move it. When the company went Ch11, the stock became worthless and I lost every dime of it. |
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Quoted: Someone I know works in a warehouse for Kmart. They had a few thousand dollars saved up in their 401k. When Kmart went bankrupt, they lost nearly the entire 401k. How is this possible? The only viable explanation I can think of is that Kmart told the investment firm to put the majority of funds into Kmart stock. Someone please explain. Thanks. ETA: Man of the house got home and explained it. Kmart only matched 401k funds invested in Kmart stock, so that where everyone put it. So the working man is more or less forced to invest in Kmart. CEO runs it under, gets a golden parachute, and working man gets the shaft. Employers are not obligated to match anything. Failure to diversify is hardly "working man getting the shaft" |
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Quoted: Don't put all your eggs in one basket. Unless you work at Priceline, Google, Microsoft, Apple, Netflix.... One company I worked at, the manager was a friend of mine. I looked for a job without knowing he worked there. The company had a stock buying program (but not through a 401k, employees got something like a discount to buy the stock), and he said he wished he had the money to do it, because it was only a matter of time before either UPS or Fed Ex bought them out. He was right, UPS bought them. |
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Someone I know works in a warehouse for Kmart. They had a few thousand dollars saved up in their 401k. When Kmart went bankrupt, they lost nearly the entire 401k. How is this possible? The only viable explanation I can think of is that Kmart told the investment firm to put the majority of funds into Kmart stock. Someone please explain. Thanks. ETA: Man of the house got home and explained it. Kmart only matched 401k funds invested in Kmart stock, so that where everyone put it. So the working man is more or less forced to invest in Kmart. CEO runs it under, gets a golden parachute, and working man gets the shaft. Employers are not obligated to match anything. Failure to diversify is hardly "working man getting the shaft" I'd be curious of the wording. Did they have to keep it in company stock or just the buy in had to be? If the later like my old company, just re-balance every quarter. RR |
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Stocks are the worst investment retirement vehicle. A total con job by the people that advocated it to the general public. All stocks will go to zero sooner or later because it is rare for any companies to survive to your retirement age. Stocks are not long term investments and you need to know when to take profits. |
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Quoted: Stocks are the worst investment retirement vehicle. A total con job by the people that advocated it to the general public. All stocks will go to zero sooner or later because it is rare for any companies to survive to your retirement age. Stocks are not long term investments and you need to know when to take profits. My cousin became a millionaire at age 25 buying Microsoft stock, whom he worked for. |
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Think "ENRON". Think of the entire US stock market as an Enron, and act accordingly. If the market crashes and your particular stock does survive though it'll still be enumerated in US dollars. Has anybody read the financial's lately to see what the other top currencies of the world are doing with US Treasury Bills? They're dumping them! Maybe they know something is in the wind. Hummn |
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Quoted: it happened where i worked. if you decide to contribute to a 401k, they don't give you the cash in your check that week but then they have so many months to put the actual withholding into the 401k. thats where they get you, they keep it - it sucks! That is completely untrue. Your money must be invested relatively quickly. The money they put in as a match can be put in on something like a yearly basis if they chose to. |
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Quoted: Treasury bills are not stocks.Quoted: Think "ENRON". Think of the entire US stock market as an Enron, and act accordingly. If the market crashes and your particular stock does survive though it'll still be enumerated in US dollars. Has anybody read the financial's lately to see what the other top currencies of the world are doing with US Treasury Bills? They're dumping them! Maybe they know something is in the wind. Hummn |
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When a corporation gets in financial trouble, they tend to strip money out of the pension fund and the 401(K). They stopped our pension fund contributions about 36 months ago, and new employees here only get to enroll in the 401(K). The corporation still must put assets in the pension fund to cover previous obligations, so now we get corporate real estate holdings instead of cash. If real estate continues to fall in price, the pension fund takes the loss. If real estate goes up, the corporation removes the real estate from the fund and replaces it with cash, sells the real estate and keeps the profit. Our 401(K) has also been stuffed with corporate stock, which continues to lose value. Not good, and the employees have no option except to find another job.
Steve |
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it happened where i worked. if you decide to contribute to a 401k, they don't give you the cash in your check that week but then they have so many months to put the actual withholding into the 401k. thats where they get you, they keep it - it sucks! That is completely untrue. Your money must be invested relatively quickly. The money they put in as a match can be put in on something like a yearly basis if they chose to. yes if thats almost 2 months in normal terms? with some place thats in trouble already? http://www.fool.com/personal-finance/general/2007/02/23/401k-funds-on-walkabout.aspx |
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Stocks are the worst investment retirement vehicle. A total con job by the people that advocated it to the general public. All stocks will go to zero sooner or later because it is rare for any companies to survive to your retirement age. 
He's safe. His money is in the mattress next to his CDs.
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Stocks are the worst investment retirement vehicle. A total con job by the people that advocated it to the general public. All stocks will go to zero sooner or later because it is rare for any companies to survive to your retirement age. Stocks are not long term investments and you need to know when to take profits. Not always true. My company has been around 120 years, pays a 5.8% Quarterly dividend for 30 years now and has always Had a steady gain throughout the years. People gotta have electricity so it's a pretty safe bet. |
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Stocks are the worst investment retirement vehicle. A total con job by the people that advocated it to the general public. All stocks will go to zero sooner or later because it is rare for any companies to survive to your retirement age. Stocks are not long term investments and you need to know when to take profits. My cousin became a millionaire at age 25 buying Microsoft stock, whom he worked for. Yeah i want LGK as my investment advisor. 
I bought Apple stock in 1998 for $14 a share, despite the fact i loathe Apple I figured when they rehired Jobs it would skyrocket back up. Buuuut it was the 90's and everyone was day trading on the new interwebs thingy. 
I sold it at $40 thinking "Wow I made a killing!" I turned a mere 4k to about 20k in two years. IF I HAD ONLY HELD ONTO IT FOR A MERE 10 years!!! I would be able to fucking retire at 39. I don't even want to see the stock price now because i'll fucking hang myself. |
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Treasury bills are not stocks.
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Think "ENRON". Think of the entire US stock market as an Enron, and act accordingly. If the market crashes and your particular stock does survive though it'll still be enumerated in US dollars. Has anybody read the financial's lately to see what the other top currencies of the world are doing with US Treasury Bills? They're dumping them! Maybe they know something is in the wind. Hummn True, but they be devalued when the Federal Reserves creates more dollars out of thin air.  The two dollar term coined by Osama bin Bernanke is Quantitative Easing.
Check out Adam Fergusson's book, When Money Dies. |
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Someone I know works in a warehouse for Kmart. They had a few thousand dollars saved up in their 401k. When Kmart went bankrupt, they lost nearly the entire 401k. How is this possible? The only viable explanation I can think of is that Kmart told the investment firm to put the majority of funds into Kmart stock. Someone please explain. Thanks. ETA: Man of the house got home and explained it. Kmart only matched 401k funds invested in Kmart stock, so that where everyone put it. So the working man is more or less forced to invest in Kmart. CEO runs it under, gets a golden parachute, and working man gets the shaft. Isn't the CEO a working man too? I mean, he is getting paid to do a job so he is a working man, right? |
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Quoted: Quoted: it happened where i worked. if you decide to contribute to a 401k, they don't give you the cash in your check that week but then they have so many months to put the actual withholding into the 401k. thats where they get you, they keep it - it sucks! That is completely untrue. They have 1.5 months. Even if they exceed it, there is no real penalty as it is unlikely anyone would know. |
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Quoted: I bought Apple stock in 1998 for $14 a share, despite the fact i loathe Apple I figured when they rehired Jobs it would skyrocket back up. Ouch, that hurts.Buuuut it was the 90's and everyone was day trading on the new interwebs thingy. I sold it at $40 thinking "Wow I made a killing!" I turned a mere 4k to about 20k in two years. IF I HAD ONLY HELD ONTO IT FOR A MERE 10 years!!! I would be able to fucking retire at 39. I don't even want to see the stock price now because i'll fucking hang myself. |
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company I worked for went Chap 11 my 401k about 70k went to the PBGC basically the .GOV owns my 401k along with the pensions of GM and Chrysler and many other companies that had underfunded 401k's now I can't touch it until I turn 60. That is unless all the damn union retirees take it all before it is spent by the GOV
the guy I talked to at the PBGC was very nice and said it's safe backed by the US Government, I replied " You mean the same one that is 14Trillion dollars in debt? That government?" |
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company I worked for went Chap 11 my 401k about 70k went to the PBGC basically the .GOV owns my 401k along with the pensions of GM and Chrysler and many other companies that had underfunded 401k's now I can't touch it until I turn 60 You did not have a 401(k) You had some kind of pension that you called a 401(k) |
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Stocks are the worst investment retirement vehicle. A total con job by the people that advocated it to the general public. All stocks will go to zero sooner or later because it is rare for any companies to survive to your retirement age. Stocks are not long term investments and you need to know when to take profits. You don't have the faintest idea what you're talking about. |
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Sounds like it was not a 401(k) to me. There are a lot of other retirement savings plans out there, from traditional pensions to SEP plans. An actual 401(k) would not disappear if the employer went bankrupt, unless you foolishly allocated 100% of your 401(k) to company stock. |
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ETA: Man of the house got home and explained it. Kmart only matched 401k funds invested in Kmart stock, so that where everyone put it.
So the working man is more or less forced to invest in Kmart. CEO runs it under, gets a golden parachute, and working man gets the shaft. Employers are not obligated to match anything. Failure to diversify is hardly "working man getting the shaft" Because a thread titled, "I Shouldn't Have Put My Whole 401 in One Stock", doesn't have the ring to it like,"The Working Man Gets the Shaft". 
Never put all your savings in one stock, even with 100% match. Diversify. Mutual funds. |
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I understand how it might happen, and I can see how it could happen to a hapless retail drone fairly easily.
I was working for a company that was purchased by Worldcom, Worldcom was purchasing company stock at about a 30% premium in a stock swap deal, so it made sense to convert a large part of my 401K to company stock holdings rather than the mutual funds I normally kept it in. Of course when a company is being purchased there is a certain amount of time before and after the closing of the deal that employees are not allowed to buy or sell company stock (supposed to be a means to prevent insider trading). Well, about two weeks after we entered that period a rumor began going around that the government was looking into Worldcom for accounting irregularities. A few days later the SEC announced officially announced that they were placing Worldcom under investigation for accounting fraud. Going into that lockout period Worldcom was trading at nearly $40, by the time the lockout ended, my company stock had been converted to Worldcom stock, and the lockout ended, Worldcom was trading at about a quarter. I lost a shitload, not everything, because common sense told me that no matter how much of a formality it was, there was some risk involved, so I left about half of my money where it was. A couple of months before some of the other guys in the shop were teasing me, they thought I was nuts to not put everything into company stock with a "guaranteed" profit of 33% in just a few weeks, afterward they thought I was some kind of genius. I wasn't a genius, just skeptical about things that are too good to be true. ETA: Many of my coworkers at that company had all of their 401K in company stock for years, and no amount of teaching was going to get them to change their mind. There was a lot of this going on in the late nineties and early 2000's in the telecom and Internet world. Many people believed that the sky was the limit, and there were no risks. |
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Quoted: Quoted: Quoted: Treasury bills are not stocks.Quoted: Think "ENRON". Think of the entire US stock market as an Enron, and act accordingly. If the market crashes and your particular stock does survive though it'll still be enumerated in US dollars. Has anybody read the financial's lately to see what the other top currencies of the world are doing with US Treasury Bills? They're dumping them! Maybe they know something is in the wind. Hummn True, but they be devalued when the Federal Reserves creates more dollars out of thin air. The two dollar term coined by Osama bin Bernanke is Quantitative Easing.Check out Adam Fergusson's book, When Money Dies. Treasure bills will be completely worthless. Stocks are not treasury bills, I don't know why 1903 mentioned that when he was talking stocks. Stocks are different from treasure bills in the case of massive money printing. While the government may make money worthless, stocks will have worth just like bread and real estate and future sales will be in future dollars. If you put $100 under a mattress and it is worth 5 cigars now, then in the future it will be worth one cigar. The same $100.00 invested would likely grow at least with inflation plus some more depending on the investment. |
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Quoted: I understand how it might happen, and I can see how it could happen to a hapless retail drone fairly easily. I was working for a company that was purchased by Worldcom, Worldcom was purchasing company stock at about a 30% premium in a stock swap deal, so it made sense to convert a large part of my 401K to company stock holdings rather than the mutual funds I normally kept it in. Of course when a company is being purchased there is a certain amount of time before and after the closing of the deal that employees are not allowed to buy or sell company stock (supposed to be a means to prevent insider trading). Well, about two weeks after we entered that period a rumor began going around that the government was looking into Worldcom for accounting irregularities. A few days later the SEC announced officially announced that they were placing Worldcom under investigation for accounting fraud. Going into that lockout period Worldcom was trading at nearly $40, by the time the lockout ended, my company stock had been converted to Worldcom stock, and the lockout ended, Worldcom was trading at about a quarter. I lost a shitload, not everything, because common sense told me that no matter how much of a formality it was, there was some risk involved, so I left about half of my money where it was. A couple of months before some of the other guys in the shop were teasing me, they thought I was nuts to not put everything into company stock with a "guaranteed" profit of 33% in just a few weeks, afterward they thought I was some kind of genius. I wasn't a genius, just skeptical about things that are too good to be true. ETA: Many of my coworkers at that company had all of their 401K in company stock for years, and no amount of teaching was going to get them to change their mind. There was a lot of this going on in the late nineties and early 2000's in the telecom and Internet world. Many people believed that the sky was the limit, and there were no risks. I lost money on Worldcom too. |