No credit card required
Browse credit cards from a variety of issuers to see if there's a better card for you.
My wife and I have been making great strides in our finances after years of overcoming debt. We are now in a position that I didn't think we would be in for some time -- debt free.
We shoud have a good amount left over at the end of each month for savings. We already have an emergency fund, and monthly budget towards different categories like a 6-month car insurance fund, vacation fund, new car fund etc.
With the extra money leftover (the point of the topic) I have an option to put up to 20% of my paycheck towards company stock and get a 5% discount. However, I already have quite a bit of stock built up with my employer (around a third of my stock holdings is company stock). Should I add to the amount committed to this program, or should I diversify by buying other stocks, etfs or mutual funds outside of the employer program? A 5% discount from a great employer is great, but I'm concerned about having too concentrated of a position. Any thought would be appreciated.
Hi @Anonymous, your duplicate post in Personal Finance has been removed. Please avoid cross-posting in the future; it's confusing to follow and is against our guidelines here.
--UB
Yes, diversify, imagine your company having future financial trouble, you don't want to be all in entirely. Employed and invested is a huge leap of faith in any company thats not your own.
I suppose it would also depend on some serious number crunching if you wanted to get deep, but i'll leave that up to you
Total CL: $321.7k | UTL: 2% | AAoA: 7.0yrs | Baddies: 0 | Other: Lease, Loan, *No Mortgage, All Inq's from Jun '20 Car Shopping |
Congrats on being debt free and in a position to save. Leftover $$ have a tendancy to slip away. I respectfully suggest that savings be made a budget item -- the first one if possible. Pay yourself first!
Investing is fun. There is a lot of reading material to help you along the way.
Good luck!
holding period, fees, and taxes to consider, but you could of course sell to avoid increasing your exposure
@Anonymous wrote:My wife and I have been making great strides in our finances after years of overcoming debt. We are now in a position that I didn't think we would be in for some time -- debt free.
We shoud have a good amount left over at the end of each month for savings. We already have an emergency fund, and monthly budget towards different categories like a 6-month car insurance fund, vacation fund, new car fund etc.
With the extra money leftover (the point of the topic) I have an option to put up to 20% of my paycheck towards company stock and get a 5% discount. However, I already have quite a bit of stock built up with my employer (around a third of my stock holdings is company stock). Should I add to the amount committed to this program, or should I diversify by buying other stocks, etfs or mutual funds outside of the employer program? A 5% discount from a great employer is great, but I'm concerned about having too concentrated of a position. Any thought would be appreciated.
Can't you sell company stock you have purchased? If yes consider selling existing stock and purchasing other equities, mutual funds and bonds. Then you can continue taking advantage of the 5% discount. As time goes on rinse and repeat. [Is therere some minimum time duration for selling shares you purchase at a discount?]
@Thomas_Thumb wrote:
@Anonymous wrote:My wife and I have been making great strides in our finances after years of overcoming debt. We are now in a position that I didn't think we would be in for some time -- debt free.
We shoud have a good amount left over at the end of each month for savings. We already have an emergency fund, and monthly budget towards different categories like a 6-month car insurance fund, vacation fund, new car fund etc.
With the extra money leftover (the point of the topic) I have an option to put up to 20% of my paycheck towards company stock and get a 5% discount. However, I already have quite a bit of stock built up with my employer (around a third of my stock holdings is company stock). Should I add to the amount committed to this program, or should I diversify by buying other stocks, etfs or mutual funds outside of the employer program? A 5% discount from a great employer is great, but I'm concerned about having too concentrated of a position. Any thought would be appreciated.
Can't you sell company stock you have purchased? If yes consider selling existing stock and purchasing other equities, mutual funds and bonds. Then you can continue taking advantage of the 5% discount. As time goes on rinse and repeat. [Is therere some minimum time duration for selling shares you purchase at a discount?]
Most ESPP plans allow you to sell the stock as soon as it vests. I imagine it's no different for the OP's plan. Some brokerages even allow you to automate this so they sell immediately upon vesting.
The one thing to keep in mind is if you sell within 12 months of vesting, you get to pay income tax on the gains from your purchase price instead of capital gains tax. At a 5% discount, that won't amount to much, though if your ESPP is also doing a 6/12-month lookback for pricing you may be on the hook for those gains too.
Diversifying is the best decision. Look through the prisma of critical situation. Perhaps your company is under threat of bankrupcy?
Chech out alternative ways to invest your money and relax!