What is the "American Dream" and does it still exist?
For some, this may seem like a dated term from the 1930s that promises unrealistic expectations in a modern (and expensive) world. Parents and grandparents share stories of when they were young and aspired to own a home, a car, have children and live the “dream.”
This phrase has become our ethos, a guiding belief system that many of us embrace in the United States. Regardless of our name, income level, background, where we live or where we work, we all have the same level of freedom and opportunity to achieve success and prosperity. Oprah Winfrey, Larry Ellison (Oracle Co-Founder) and Elvis Presley are three names that are widely associated with this concept.
Now, let’s consider ESOPs (Employee Stock Ownership Plans).
By definition, an ESOP is a qualified retirement plan that can be used as a business transition tool and as an employee ownership vehicle. Not only is an ESOP an exit strategy for the owner, but it is also, certainly, an act of generosity. Employees receive shares of the company's stock as a benefit. In simple terms, it is “free money” just for contributing to the success of the company. There are approximately 14 million American workers, from 6,600 companies who are currently enjoying this benefit. I am fortunate to be one of them. A 2019 study from the NCEO found ESOP participants have 2.2 times as much in retirement plans and 20 percent more financial assets overall compared to the comparison group at non-ESOP companies. However, with about eight percent of all companies being an ESOP, there is still a lot of room to grow and more education is needed.
At ESOP Partners we see every day how employee ownership is changing lives for the American workforce. Employees at every level in the organization enjoy this benefit and are building a nice nest egg for their retirement, or whenever they leave the world of work. It provides a sense of comfort and security in the present while investing in the future.
Employee-Owners across the country share much of the same sentiment: ESOP is a “gift” and they are thankful for the generosity of their company’s owners. Retired employee-owners have shared emotional stories of how their ESOP “made the impossible possible.” Whether it is buying that home in Florida, a boat, a sports car, paying off debts, traveling, or checking off more bucket list items, ESOPs give millions of workers the opportunity to create wealth and live their dream – whatever that may be.