Investing in my 401(k) plan

You can simply use the percentages from the pyramid to distribute your dollars appropriately. The only noticeable difference may be that of you happen to work for a large, publicly traded co pay, your plan will also offer the chance to invest in your company’s stock. If it does, please resist the temptation to overinvestment, no matter how get you think your company is.

In recent years, too many overly loyal employees have lost their entire nest eggs because they invented all their retirement money in their own company’s stock. Keep in mind name like Enron, WorldCom and Lucent Technologies. Until the roof fell in, everyone thought these companies were sure things, not one more that the people who worked for them. In my view, you should never invest more than 25 percent and if you want to be conservative, not more than 5 percent of your retirement money in your own company’s stock. Moreover, when you use the Automatic Millionaire Investment, consider your company’s stock to be an aggressive growth investment. This is because owning a single stock reduces your diversification and therefore increases your risk.