Last week, I enjoyed meeting the Facebook team in Dubai.
It’s always a good sign when a company encourages financial education and wellness for its workers.
Jochen Bischoff organized the event. Last year, he bought and thoroughly read my book, Millionaire Expat.
Using the models in the book, he built himself a portfolio of low-cost index funds.
He could have stopped there. But he wanted other people at Facebook to learn how to do the same thing.
That’s why he brought me in to talk.
The Facebook employees also asked a great question: How much money should they have in Facebook stock?
Plenty of people who work for publicly traded companies ask the same question. My answer echoes Burton Malkiel’s response, when he’s asked the same thing.
The legendary economist (and author of A Random Walk Down Wall Street) says people shouldn’t invest a lot of money in their company’s stock.
When you have a job, you rely on your company’s future health for your income. That’s a risk we accept. But when we invest large sums in company stock, we double that risk. We’re then relying on our company’s health to provide our salaries and we’re relying on that company’s health to fund our retirements.
I suggested that the people at Facebook keep no more than 10 percent of their retirement portfolio in Facebook’s stock. The rest of the money should be diversified in a globally diversified portfolio of index funds.
I hope, one day, to return to Facebook again. Thank you, Jochen Bischoff, for the fabulous invitation.
If you would like me to speak at your organization
Photos © 2019 Pele Hallam