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Who We Are
The BlueCollarDollar was designed as a place you could go to find the complicated world of finance, debt, insurance, mortgages, retirement, and your investments explained. We have a common sense approach to money. You earn it, you should know what to do with it. We want you to be debt free and we will work at getting you there. We want you to have a financially stable retirement, that is both comfortable and healthy.

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Is there such a thing as good debt? What do you suppose bad debt is? And what kind do you have? Debt
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For many folks, the ticker that cruises by the bottom of the screen on CNBC is a foreign as another language. It goes in an endless stream of red and green, and sometimes white. The top line is for New York Stock Exchange stocks whose symbols are lettered in single, double, and three letter symbols. The bottom line contains the symbols for the Nasdaq stock exchange. What I see when the lines drift by is something totally different than what you might see. I can identify a good deal of the companies. You, perhaps, can only identify the company that employs you. And what you see may not be what you want to see.

There are more than fifty percent of the companies currently trading on the "big board" (NYSE) that have lost more than 30% of their market value in the last six months. The decline in that value has many causes and reasons, and there is a constant and continuous speculation as to why. What does matter is that you are witnessing is the demise of your retirement.

There is an alarming amount of people who have enrolled in 401(k) plans at their work whose fate is tied to the performance of their company's stock. If you are working for some soaring technology stock, this can be a great thing. If you are tethered to what is now being called the "old economy" companies like Coke or Proctor and Gamble or grocery giant Kroger, you may just be crying out loud.

Financial advisors will be the first with the "I told you so" when it comes to diversification. Having more than 5 or 10% of your assets devoted to a single stock, is their minds, foolish. But what if the company you work for matches your contribution, which is set up to purchase stock? And the company matches that purchase with more stock?. Your diversification can quickly become a thing of the past.

There is a federal law concerning what is called the "fiduciary" responsibility of companies when it comes to investing for employees. This means that companies have an obligation to help their employees make good decisions regarding their retirement plans. Why haven't they?

Money.
Companies openly admit that they want their employees to buy stock. Setting up the plan designed to save for retirement as the incentive to amass large holdings is not a good idea. Employees at some companies have amassed more than a million dollars in their retirement accounts because of the incredible performance of their company's stock. But what if the stock prices are cut in half. Then so is their retirement. This is the argument for diversification.

Companies have a life cycle that is relatively predictable, bull market or no bull market. A company referred to as large cap (capitalization, which means that they are worth billions) can keep up its growth momentum for only four years. Only 20% can sustain growth for the next 10 years, and the numbers go down from there. Only 5% can maintain any kind of forward growth for 20 years, which means that you continue to have the risk, but the rewards become less and less.

Now, I'm am not telling you to pull out of your 401(k). But what I am telling you to do is take a long hard look at what you are buying. Too much of one thing, such as your company's stock is generally deemed not a good idea. If you company offers mutual funds as well as stock, invest in them also, even if the contribution you make is better matched with stock. Often a company will have an exaggerated percentage when matching stock, Sometimes as high as 10% in matching contributions, while only matching mutual fund contributions up to 5%. This encouragement with numbers is often too tempting to pass up. Especially when the employee perceives the company's future as being nothing but rosy. But that same view often is not shared with those who trade the company's shares on Wall Street. That, my friends, is where the risk enters in.

Many companies who do offer better matches for their stock buying 401(k) employees add hidden restrictions on the selling of those matched shares. Some companies actually forbid any selling of those shares until after the employee reaches 55. Sometimes later. This will, most likely cause some federal regulation and this regulation will be as a result of some newsworthy class action suit filed by employees who have been over weighted in the company"s issue. These regulations will not be wanted and should not be needed. Congress is, however looking into it and what may come from it is some sort of freedom from liability for the company if the employer provides education and the employee still makes a bad decision.

These plans work incredibly well and the laws that govern them (ERISA, which stands for Employee Retirement income Security Act) have allowed millions of Americans save for their retirement. Be careful what you sign up for though, and ask questions. If you don't like the way your 401(k) has been structured, you might be able to change it. But you will more than likely have to speak up and say so.