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1. It's normal in the tech industry to own a lot of stock in the company you work for. Investing in a vendor (in Nvidia's case) or another adjacent company is

1. It's normal in the tech industry to own a lot of stock in the company you work for. Investing in a vendor (in Nvidia's case) or another adjacent company is lower risk. You cannot avoid risk in investing, it's a natural part of the situation. 2. You can avoid the sell low situation by having 3-6 months of expenses saved in an emergency savings account. With all the layoffs in the last few years everyone should have gotten the message to do this. Even in a large downturn six months of expenses in a savings account is enough for you to re-skill and find new employment.

pembrook 2y ago
Just because everybody is doing it, doesn’t mean it’s rational. The people who held onto their RSUs from being hired at Zoom during the height of the pandemic might not be so happy they chose to double down on their employment risk with investor risk.
- Terr_ 2y ago
  > Just because everybody is doing it, doesn’t mean it’s rational. Also, an agenda that is rational for one party may be irrational for the other. Many employers would be overjoyed if their workers agreed to be paid 100% in deferred-vesting RSUs and converted all their private savings into pure company stock. It would both drive the price up and shackle workers to certain company interests. But if an employee sought the same outcome, we'd question their sanity.
Terr_ 2y ago
> It's normal in the tech industry to own a lot of stock in the company you work for. For certain companies, but misleading: Most of that is stock which their employer structured into compensation, and sometimes they only kinda-maybe-potentially own it because it's an unvested RSU or un-exercised stock-option etc. That's not the same as taking your paycheck and then choosing to spend part of it on shares from the open market.
bigstrat2003 2y ago
> It's normal in the tech industry to own a lot of stock in the company you work for. It's actually not. The tech industry is much bigger than startups and the like, and outside of that environment it's not normal to own a lot of stock in your employer.
- ghaff 2y ago
  I would have said it's larger tech companies where it's fairly common to own (some) stock that's actually worth something. (So maybe not a lot in the scheme of things.)
throwaway2037 2y ago
> You can avoid the sell low situation by having 3-6 months of expenses saved in an emergency savings account. I see this (3-6 mos savings) constantly quoted in basic personal mgmt blog posts, but it seems unrealistic for most. Seriously, what percentage of people in OECD can do this? Surely, less than 5%. I am not sure it is great advice because it is discouragingly unrealistic for most. The average person has out of control expenses and 632 reasons why they cannot change anything. If you read any personal finance Q&A, they all eventually descend into this pattern. It gets boring. And most people who do save a lot have a much higher income than is average in their area.
- mkerrigan 2y ago
  Check out https://earlyretirementnow.com/2021/05/26/the-emergency-fund-is-still-useless/ https://earlyretirementnow.com/2021/05/26/the-emergency-fund... from Early Retirement Now. He also links to other posts debunking the need for emergency savings.
  - IanCal 2y ago
    Worth noting that they're not saying you don't need that kind of value on assets available to you. They are simply advocating for keeping that money invested rather than as cash and they have access to immediate fairly large loans (via credit cards and something about their mortgage).
- pm215 2y ago
  It may be unrealistic for many people, but it should not be unrealistic for the subset of people who have available funds to invest in the stock market, which is who the GP's advice is for. Putting money into stocks before you have an emergency fund is bad prioritisation.
- deleted 2y ago
  [deleted]
- abyssin 2y ago
  Coming from a family that has a frugal culture, it’s always been easy for me to save a substantial part of my income, even when I had to downsize my lifestyle after losing a relatively high paying job. Looking at how people around me spend their money, it can feel they’re actively trying to get rid of their entire salary.
IneffablePigeon 2y ago
Owning a lot of stock in the company you work for is another good reason not to concentrate more of your portfolio in the same industry.
deleted 2y ago
[deleted]
graemep 2y ago
> You cannot avoid risk in investing, it's a natural part of the situation. You can, and should, diversify risk. You should invest outside the industry.
cmrdporcupine 2y ago
Man, I'd be comfortably retired now if I had held my GOOG GSUs and sold (at peak) when I quit rather than selling them as I got them. Same, my wife, worked for Apple from 2003-2010. We had Apple stock back in 2004/2005, for just a few $ a share... oh man. But that went against most most financial advice, and we needed the money as it came.
ghaff 2y ago
> You can avoid the sell low situation by having 3-6 months of expenses saved in an emergency savings account. Maybe. You can also just be trying to catch a falling knife. Sometimes it's sensible to cut your losses but, of course, it's often not clear when (or if) that's the case.

pembrook 2y ago

Just because everybody is doing it, doesn’t mean it’s rational. The people who held onto their RSUs from being hired at Zoom during the height of the pandemic might not be so happy they chose to double down on their employment risk with investor risk.

Terr_ 2y ago
> Just because everybody is doing it, doesn’t mean it’s rational. Also, an agenda that is rational for one party may be irrational for the other. Many employers would be overjoyed if their workers agreed to be paid 100% in deferred-vesting RSUs and converted all their private savings into pure company stock. It would both drive the price up and shackle workers to certain company interests. But if an employee sought the same outcome, we'd question their sanity.

Terr_ 2y ago

> It's normal in the tech industry to own a lot of stock in the company you work for. For certain companies, but misleading: Most of that is stock which their employer structured into compensation, and sometimes they only kinda-maybe-potentially own it because it's an unvested RSU or un-exercised stock-option etc. That's not the same as taking your paycheck and then choosing to spend part of it on shares from the open market.

bigstrat2003 2y ago

> It's normal in the tech industry to own a lot of stock in the company you work for. It's actually not. The tech industry is much bigger than startups and the like, and outside of that environment it's not normal to own a lot of stock in your employer.

ghaff 2y ago
I would have said it's larger tech companies where it's fairly common to own (some) stock that's actually worth something. (So maybe not a lot in the scheme of things.)

throwaway2037 2y ago

> You can avoid the sell low situation by having 3-6 months of expenses saved in an emergency savings account. I see this (3-6 mos savings) constantly quoted in basic personal mgmt blog posts, but it seems unrealistic for most. Seriously, what percentage of people in OECD can do this? Surely, less than 5%. I am not sure it is great advice because it is discouragingly unrealistic for most. The average person has out of control expenses and 632 reasons why they cannot change anything. If you read any personal finance Q&A, they all eventually descend into this pattern. It gets boring. And most people who do save a lot have a much higher income than is average in their area.

mkerrigan 2y ago
Check out https://earlyretirementnow.com/2021/05/26/the-emergency-fund-is-still-useless/ https://earlyretirementnow.com/2021/05/26/the-emergency-fund... from Early Retirement Now. He also links to other posts debunking the need for emergency savings.
- IanCal 2y ago
  Worth noting that they're not saying you don't need that kind of value on assets available to you. They are simply advocating for keeping that money invested rather than as cash and they have access to immediate fairly large loans (via credit cards and something about their mortgage).
pm215 2y ago
It may be unrealistic for many people, but it should not be unrealistic for the subset of people who have available funds to invest in the stock market, which is who the GP's advice is for. Putting money into stocks before you have an emergency fund is bad prioritisation.
deleted 2y ago
[deleted]
abyssin 2y ago
Coming from a family that has a frugal culture, it’s always been easy for me to save a substantial part of my income, even when I had to downsize my lifestyle after losing a relatively high paying job. Looking at how people around me spend their money, it can feel they’re actively trying to get rid of their entire salary.

IneffablePigeon 2y ago

Owning a lot of stock in the company you work for is another good reason not to concentrate more of your portfolio in the same industry.

deleted 2y ago

[deleted]

graemep 2y ago

> You cannot avoid risk in investing, it's a natural part of the situation. You can, and should, diversify risk. You should invest outside the industry.

cmrdporcupine 2y ago

Man, I'd be comfortably retired now if I had held my GOOG GSUs and sold (at peak) when I quit rather than selling them as I got them. Same, my wife, worked for Apple from 2003-2010. We had Apple stock back in 2004/2005, for just a few $ a share... oh man. But that went against most most financial advice, and we needed the money as it came.

ghaff 2y ago

> You can avoid the sell low situation by having 3-6 months of expenses saved in an emergency savings account. Maybe. You can also just be trying to catch a falling knife. Sometimes it's sensible to cut your losses but, of course, it's often not clear when (or if) that's the case.