boondogger wrote:Thanks Valuethinker, you've given me a lot to think about. Part of me is hoping that my company is not like the others you mentioned. We are not a huge company, about 1500 employees and $1B annual revenue. We're 100% employee-owned, not publicly traded whatsoever. We're in the wholesale electrical distribution industry. So business can vary in the construction market, but our other large customers are utilities. Maybe I'm wrong in thinking we're not as volatile though.
You have me significantly worried though, so looks like I need to reconsider how much I'm putting into a 401K. You are right on about your comment on the speed of change.
If you watch the Enron movie 'Smartest Guys in the Room' there's a utility lineman. 25 years putting money into his employer's stock-- Oregon electric utility. Safest thing in the world. Then Enron took it over, stock for stock, and 2 years later it was bust-- he lost all his retirement savings.
I would agree with you that your business sounds a lot safer than Apple, say. You are not technology dependent, your customers are not going to go away.
But so much can change:
- company is taken over by next Enron (or just your typical change strategy every 2 years corporate)
- major customer gets into financial trouble
- some 'bright light' in the company does something stupid eg some derivative swap sold by a banker, company gets wiped out when it goes wrong
- culture changes and company does not remain competitive in its industry
- new entrant with big financial backing drives down prices for everyone, industry incumbents get really hurt
This is the problem. Good companies don't always stay good companies.
I don't encourage you to leave a job you like with a good working environment. These are so rare nowadays-- most folks are basically working at jobs they don't like, unreasonable hours, ridiculous management demands, because they are terrified of losing their jobs, their health coverage etc.
However I do encourage you to plan for the downside risk.
Texasdiver, thanks for your input. I feel somewhat risk averse, so I know what you are saying about having little control over my economic future. I've grown to be ok with it though. Not just from complacency either. Being 100% employee owned has an interesting effect on the company culture. Most employees who have been around for a while understand this. We feel a strong sense of responsibility for our own destiny. Makes people care more than a normal company. Sounds cheesy probably, but it's true. People work harder to make sure we survive. Also we have an open book management culture, and we do more auditing of financials than we need to.
All to the good all arguments to stay there. Just don't bet the whole ranch on the stock.
Another approach is that if our stock keeps doing well, just quit when my account reaches a number X, then I would get a distribution that I could roll over into a retirement account of my choice. Down side is I could leave a lot on the table, and have to quit a very good job.
Don't leave a good job. Just don't. They are too hard to find in life, particularly once you are over 45.