Only been 10 years and a lot of people forgot about Enron employees and their 401(k)'s already

[NNN0LHI]

http://money.cnn.com/2001/11/26/401k/q_retire_enron_re/

401(k) investors sue Enron

Employees who lost their retirement funds on company's shares fight back.

November 26, 2001: 2:36 p.m. ET

HOUSTON (Reuters) - After climbing utility poles in all kinds of weather for 35 years, Roy Rinard was hoping to retire in a few years. But that was before the collapse of Enron Corp.'s stock price devoured his retirement savings.

"I'm basically wiped out," said Rinard, 54, who works for Portland General Electric, an Oregon utility company acquired by the Houston-based energy trading firm in 1997.

"I'm right back to ground zero and I'll have to go on working as long as I can," said Rinard, who suffers from arthritis and a lung condition that leaves him short of breath.

Encouraged by Enron's then-strong performance and the company's bullish view of its future prospects, Rinard moved all of the money invested in his 401(k) retirement account into Enron stock earlier this year.

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Funny how the human mind works isn't it? The 1980's was the worst decade financially in my entire life. Spent over half that decade laid off from my trade and working shit jobs. And you know something else? It was such a traumatic experience I had blocked that nightmare out. Came back to me in bits and pieces after this recession began. I guess that is normal?

[dkf]

1. After that I sold all my company stock in my 401k.

[Sherman A1]

2. Well,

As much as I sympathize with the situation, putting all your eggs in one basket may not have been the best choice and I don't think any financial adviser or expert would disagree.

[NNN0LHI]

3. That is the problem. The average worker is not an expert in these matters

The average worker doesn't get any inside information like the experts do and then tend to invest on what they have to go by. They invest on hunches and other such nonsense because they think they are smart and are going to become rich.

And that eggs in one basket stuff doesn't quite get it either. I can go to the race track and spread my money out and bet every horse in the race. And I will certainly win every race doing that. But in the long run will I come out ahead financially?

For every financial expert who understands the intricacies involved with investing, there are a thousand suckers who don't.

That is how Las Vegas stays in business.

Don

[Sherman A1]

5. Actually

The all the eggs in one basket does get it. While he may or may not have been limited in his 401k choices and even sold a bill of goods by his employer's wishful thinking. Perhaps it would have been wise to spread out one's retirement savings into a variety of different investments beyond the 401k which really should be only part of one's total portfolio.

Granted we average folks don't get inside information, but to have again put all one's eggs in one basket with the money that will be so critical to one's future is simply asking for trouble and trusting what your employer says about just how great the company is doing to encourage you to buy more stock, is pretty much the same.

In the end it was the gentleman's money & future and even considering he may have been without any expertise, it is ultimately his responsibility to at least monitor closely.

[EleanorR]

4. "Those savings were largely wiped out because the plan offered little opportunity to diversify.

Like many corporate plans, Enron's didn't allow participants to transfer stock that had been given to them as part of a matching contribution until age 50. And Enron officials actively encouraged workers to buy Enron stock. In a memo in August, Lay told employees he'd "never felt better about the prospects of the company. Our growth has never been more certain." Enron workers were further hamstrung by Enron's switching of plan administrators and freezing of all asset shifting within 401(k) accounts for at least 10 days, just as Enron stock was taking its dive. The result was ruin, as Enron sank from $90 to under $1."

Read more: http://www.time.com/time/magazine/article/0,9171,1001636,00.html#ixzz1bKrD3uK4