quote:

I work for a employee owned company that pays dividends to their share holders. I have to have someone nominate me in order to buy in. Typically the buy in is offered at year 4 of employment and I am currently at year 2. They do offer 1% loan to buy in once the offer is made. Everyone I talk to says the return is typically 30% or so per year. This is a waiting game until I am offered the buy in.

I hope it works out.

I'm just being honest. This is just 1 perspective. Those things work out once out of 10 times.
I've seen bankruptcies take 90% of what has been invested.
I've seen an ownership interest inherit debt.

Not only is it risky (where are companies 15 to 20 years from now). But it also flies in the face of diversification.

I would suggest a financial advisor. Not a salesperson. But an actual money manager who can explain the financial situation of the company (like he would for any company that you could invest in).

You might be the 1 out of 10.
But this is a huge red flag and I have seen many people lose hundreds of thousands of dollars.

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Posted by Jag_Warrior

Virginia

Member since May 2015

4292 posts

Posted on 2/20/23 at 9:16 pm to meansonny

Good read. Your post just convinced me to make my answer “yes!”.

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Posted by lsuCJ5

Holly Springs, NC

Member since Nov 2012

1067 posts

Posted on 2/21/23 at 6:14 am to meansonny

quote:
I hope it works out.

I'm just being honest. This is just 1 perspective. Those things work out once out of 10 times.
I've seen bankruptcies take 90% of what has been invested.
I've seen an ownership interest inherit debt.

Not only is it risky (where are companies 15 to 20 years from now). But it also flies in the face of diversification.

I would suggest a financial advisor. Not a salesperson. But an actual money manager who can explain the financial situation of the company (like he would for any company that you could invest in).

You might be the 1 out of 10.
But this is a huge red flag and I have seen many people lose hundreds of thousands of dollars.

i work for the 2nd largest contractor in the US with revenues over 12 billion a year. We have been in business since the 1800's. Currently there are over 3,000 share holders, this is not a new program that has been rolled out. The share holders I know have made a lot of money with the program. I really hope I am offered a by in.

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Posted by meansonny

ATL

Member since Sep 2012

26045 posts

Posted on 2/21/23 at 7:41 am to lsuCJ5

You arent describing situations unfamiliar to my circle.

Enron
Lehman Brothers

I've seen a legitimate private capital firm go under because the treasurer took an overnight gamble.

I've seen $500k deferred comp gather in a bankruptcy claim.

I've seen family members buy into partnerships where 5 years later they are inheriting $120,000 personal debt.

My personal experience was tiny.
I worked in a mortgage division under First Tennessee Bank. They strongly encouraged the 401k contributions into company stock. When they shuttered the entire mortgage division, of course the company stock was in shambles. Pretty much the same diversification problems with Enron on about 1/1000th the scale. Be wary when too much of the nest egg is tied into one company (future wage income and future retirement).

I'm sure there are success stories. But there is no such thing as "a sure thing". I wish you the best.

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