Don't Get Overinvested in Your Employer

This is just a friendly word of caution about putting all of your eggs in one basket. I’m over-invested in one place right now, and it’s my own employer.


Current

I started working at General Electric (GE) a little over a year ago. I wanted to have stock in my company, so I started buying GE shares on Robinhood. As you might have seen, GE stock is doing terribly, and I’ve lost over $1,000 on my shares so far. My first share was bought for $32. Shares dropped into the $12 range recently. I also put a 5% of my 401k contributions into a GE stock fund. That small portion of my contribution is down over 30%! And to make my reliance on the General even worse, GE pays my paycheck. GE is not doing so hot right now, with occasional layoffs, selling businesses, cost cutting methods, reduced travel, etc. My division, GE Transportation, is for sale, though we’re doing pretty well. I got my first bonus this year, and a better raise than I ever got at previous employers!


Looking Ahead

Though my division is in talks of being sold, I will likely retain my job since I’m good at it, it saves the company a ton of money, and do it for a low price compared to others with the same skills. However, in the next few years, my paycheck will likely not come from GE. Instead, it will come from whatever company purchases the Transportation division. I think that GE stock will be a great long term investment. I won’t sell my shares for many, many years, and they will continue to pay dividends, even though there was a recent major dividend slash. GE stock is at a great price right now, and I’m happy to be buying more shares and accumulating them in my 401k as well. The upside is a few years out, but I’ll be patient.


Anyways, just a small word of advice on not to get too invested in the success of your employer! Do as I say, not as I do.

Written on April 16, 2018

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