Llama Land

adventures and madness

401(k) + options = 0

A few days ago, I made the foolish decision to check how my 401(k) did for calendar year 2008. Granted, I wasn’t expecting anything good, but I guess I was naively expecting something not entirely horrific either. Fool that I am. For the year 2008, my 401(k) lost 35% of its value. This includes not just any gains it might have made in the potpourri of stocks, bonds & mutual funds in which it invests, but also my paycheck based deductions. So for the year, I finished about $2 higher than I started the year. Now if I wasn’t deducting anything from my paycheck, I’d be thrilled. But instead several thousand dollars of my income went down the toilet. Yes, I was an idiot for not reducing my paycheck deductions at first sign of the market crash, so this is largely my own fault. I’ve since reduced my paycheck deduction down to 1%. If things don’t look up within the next 90 days, I’m cutting it to 0%, and just going to ride out the mess for the rest of 2009.
Earlier today, I checked up on how my employer provided stock grants were looking. 2008 was a horrible year. I sold zero options the entire year, because it just wasn’t worth it. Surprisingly, my options are still not entirely under water, but if I sold all the vested options today (which I can’t, because i’m in a blackout period right now), I’d net less than $2k. Selling a similar number of options back in 2007 netted high 5 figures. So my options are pretty close to worthless right now.
Yay 2009.

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