Take The Stock Plan?

Cindy's got a great stock purchase offer from her company. Is that really the best thing to do with her money?

QUESTION: Cindy knows Dave doesn’t like single stocks, but her employer’s matching funds come from their stock purchases of the company. She has to buy stock to get free stock. Should she take this offer? Dave reminds her of a safer place where that stock money could be.

ANSWER: I’m all about free stock, but I don’t want you to have all your money invested in there, or do day trading or stock trading, or investing with your golf buddy or something like that. Don’t leave all your money in stock; that’s what Enron employees did. When you are vested in the stock, transfer it to a mutual fund. You don’t want single stocks that you tie your 401k up in. We’ll take free stocks, but don’t invest all your money in one stock.