Comments on: Labor Capital, The Forgotten Asset Class

By: Mike

Mike — Thu, 24 Apr 2008 01:06:32 +0000

Jones does make a good point about investing in company stock. My wife got to buy stock at a 15% discount from her former employer. Many of the people there would buy the maximum allowed and sell it the same day. But otherwise, I agree with your point.

A related issue is that many companies have started making participation in their 401K plans the default choice as opposed to making employees opt in. This is great, in that it forces unmotivated workers to invest in their retirement, but the default investment choice is often heavy in company stock. Obviously that’s probably better than nothing, but it does setup workers for a double loss (job and retirement) if the company tanks.

By: Aaron Stroud

Aaron Stroud — Wed, 23 Apr 2008 04:48:34 +0000

Pinyo, I like how you clarify that younger investors can take on more risk. Too many people urge younger investors to assume more risk because they think increased stock risk always translates into higher returns given enough time.

These are the same people who also cheerfully point out that past performance is not indicative of future performance. That disclaimer applies to the stock market as well as individual stocks or mutual funds, but you wouldn’t know it from the way they talk.

By: Pinyo

Pinyo — Tue, 22 Apr 2008 00:44:48 +0000

@Make Friends – Absolutely.

@Jones – I think that’s a good plan. Since you’re buying at a discount, you’re getting a guarantee return — which is awesome. Just don’t get too caught up with the company stock, unless you really feel that the stock is going to take off.

I know that sounds like making a gamble, and it is — but you’re young and you can afford to take that type of risk.

By: Prime Time Money: Anniversary Roundup | Prime Time Money

Prime Time Money: Anniversary Roundup | Prime Time Money — Mon, 21 Apr 2008 04:07:55 +0000

[...] Pinyo from Moolanomy explains the concept of labor capital, the forgotten asset class. [...]

By: Jones

Jones — Sun, 20 Apr 2008 13:38:17 +0000

I didnt mention it in my earlier comment, but thats what im planning on doing, pretty much exactly what you responded. Since i can buy at a discount im already earning money that way… right? Once there is a large sum in that acct, ill sell those shares and buy shares of something else…

By: Make Friends, Earn Money

Make Friends, Earn Money — Sat, 19 Apr 2008 19:07:14 +0000

Your point about younger investors taking more risks is right on the button. I think that as you get older and closer to retirement you should be looking to consolidate investments into more secure streams, so as to minimise the impact of any negative downturn in stock markets. However there are some people who still like to take risks, i suppose it depends on your personality type.

By: Pinyo

Pinyo — Sat, 19 Apr 2008 19:04:06 +0000

@Mrs. Micah – Always good to learn from others’ experience/mistakes.

@Jones – You just graduated from college so you could take more risk. If you could buy your company at a discount compare to the general market, then it might not be a bad buy. However, once your investment is a little bigger, I think the best bet is to diversify and build a balanced portfolio.

@Enginerd – Sorry, late night blogging.

By: Enginerd

Enginerd — Sat, 19 Apr 2008 18:56:08 +0000

None of the headlines are actually questions, yet they have question marks: Why Younger Investors Could Take More Risk?
should just be
Why Younger Investors Could Take More Risk
or
Why Can Younger Investors Take More Risk?

By: Jones

Jones — Sat, 19 Apr 2008 12:55:03 +0000

Well, investing in your companys stock may have some advantages too, for some of us. I just graduated from college and cant afford to invest anywhere else because there is a minimum amount to open an acct, usually 2k, while investing in your compaanys stock you can start with just $7.00, weekly contributions, plus, usually there is a discount (at least for the company i work for), no selling/buying commissions, and a few others??? So its not that bad after all???

By: pfblogsround and major linksfest | plonkee money

pfblogsround and major linksfest | plonkee money — Fri, 18 Apr 2008 21:16:14 +0000

[...] labor capital, the forgotten class @ moolanomy – when you’re thinking about your investment portfolio you should take into account that your biggest investment is probably your own labour. Marx had something right after all? Power to the people! [...]