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Advice wanted on employee stock ownership plan
Posted on 4/9/14 at 9:02 pm
Posted on 4/9/14 at 9:02 pm
My company offers an ESOP with with a 15% discount on market price. I already max out my IRA and contribute to the 401(k). I want to make sure I keep my retirement funds diversified, but I feel like I'm missing out considering the discount. How much would be a good amount to contribute, if any? I'm considering 1%. The company is a very old, very large international engineering firm so a long term drop in the stock price would be fairly unlikely. Any advice would be appreciated. TIA.
Posted on 4/9/14 at 9:12 pm to Brummy
Umm as much as you can.. Free money dude. . No questions asked
This post was edited on 4/9/14 at 9:13 pm
Posted on 4/9/14 at 9:42 pm to Brummy
I'd jump all over a 15% discount
Posted on 4/9/14 at 9:44 pm to Brummy
15% is 15%.
What's the required holding period?
Just sell the shares after you pass that and move the $ to whatever you want.
What's the required holding period?
Just sell the shares after you pass that and move the $ to whatever you want.
Posted on 4/9/14 at 9:45 pm to Brummy
Buy the most you possibly can, it is a free 15% discount. Every six months or so sell whatever qualifies for long term capital gains tax, you are correct that you don't want too much riding on your employer.
I do this and the extra money goes a long way to maxing my Roth every year.
I do this and the extra money goes a long way to maxing my Roth every year.
Posted on 4/9/14 at 9:56 pm to foshizzle
Shizz, can you elaborate a bit on this part, please
I get the 15% discount as well and am taking full advantage. I just want to be sure I'm considering strategies like what you're talking about. TIA
quote:
Every six months or so sell whatever qualifies for long term capital gains tax
I get the 15% discount as well and am taking full advantage. I just want to be sure I'm considering strategies like what you're talking about. TIA
Posted on 4/9/14 at 10:09 pm to Tactical Insertion
Any shares of stock that you'd had for over one year qualifies for long-term capital gains tax treatment, which of course means your tax rate on gains is considerably lower. So every so often (I picked six months, but I'm not strict about it) I sell whatever company stock I've had for over one year.
So if I buy shares through an ESOP with my paycheck every two weeks starting 1/1/2013, then for example fourteen months later on 3/1/2014 I sell everything that I'd bought between 1/1/2013 and 3/1/2013 (more than a one year holding period).
If your company stock has lost money then there's no need to wait but I usually don't worry about that and just observe the rule of thumb I've described here.
So if I buy shares through an ESOP with my paycheck every two weeks starting 1/1/2013, then for example fourteen months later on 3/1/2014 I sell everything that I'd bought between 1/1/2013 and 3/1/2013 (more than a one year holding period).
If your company stock has lost money then there's no need to wait but I usually don't worry about that and just observe the rule of thumb I've described here.
Posted on 4/9/14 at 10:53 pm to foshizzle
Is yours not the lesser of the price at the beginning of the period or end of the period?
Posted on 4/9/14 at 11:02 pm to Brummy
quote:
My company offers an ESOP with with a 15% discount on market price. I already max out my IRA and contribute to the 401(k). I want to make sure I keep my retirement funds diversified, but I feel like I'm missing out considering the discount. How much would be a good amount to contribute, if any? I'm considering 1%. The company is a very old, very large international engineering firm so a long term drop in the stock price would be fairly unlikely. Any advice would be appreciated. TIA.
Damn how many people on here work for CBI?
Posted on 4/9/14 at 11:04 pm to FootballNostradamus
To answer your question, though, I'd contribute as much as they'll allow you. Unfortunately you're buying at a time when CBI's stock is the highest it's been in its company's history so not exactly the best time to enroll, but you should be solid.
I will tell you, however, that construction is very cyclical from a financial standpoint. This will need to be a longterm hold or you're gonna drive yourself crazy. There's also a two year minimum or you forfeit the 15%.
I will tell you, however, that construction is very cyclical from a financial standpoint. This will need to be a longterm hold or you're gonna drive yourself crazy. There's also a two year minimum or you forfeit the 15%.
Posted on 4/9/14 at 11:10 pm to FootballNostradamus
15 percent is a great discount, provided the stock doesn't go down 20 percent in value over the long haul.
In other words... don't ever do it with retirement dollars (you don't to lose your job and your money if the company has a problem) and research/track it like you would any other stock.
In other words... don't ever do it with retirement dollars (you don't to lose your job and your money if the company has a problem) and research/track it like you would any other stock.
Posted on 4/9/14 at 11:36 pm to LSUFanHouston
quote:
15 percent is a great discount, provided the stock doesn't go down 20 percent in value over the long haul.
15 percent is a great discount, period. You have no way of knowing how it will do after that.
quote:
don't ever do it with retirement dollars (you don't to lose your job and your money if the company has a problem)
That's why I suggest selling every so often the portion that is only subject to LT cap. gains. You don't want to own too much, but you don't want to pay the higher short term rate either.
quote:
research/track it like you would any other stock.
No, just sell it every so often as described above. Individual investors generally have no idea how to do quality equity research and don't have enough money for it to be worth the trouble if they did.
Posted on 4/10/14 at 10:04 am to foshizzle
My wife works for a large O&G company and gets a similar deal, however it also pays nearly a 5% dividend so I've encouraged her to buy as much as possible. I figure that money would just be sitting in a bank anyway collecting dust. I guess eventually we will accumulate enough that we will sell some, but right now why not let that money work?
Does your companies stock pay a dividend?
Does your companies stock pay a dividend?
This post was edited on 4/10/14 at 10:06 am
Posted on 4/10/14 at 12:20 pm to TJG210
i buy company stock to add to my portfolio through my 401k (no discount), plan on working for a while here and its got a good dividend but should I treat is as a long term play or dump it when it gets high and buy more later?
Posted on 4/10/14 at 1:32 pm to CE Tiger
All of this dividend talk is pointless at best.
Dividends are not something that should be coming into play at all here.
Dividends are not something that should be coming into play at all here.
Posted on 4/10/14 at 9:09 pm to TheHiddenFlask
How is the dividend factor pointless? If the company is a consistent payer at a high rate, then why discount the part dividends pay? For arguments sake, say I hold 50k in company stock that I paid $42,500, receive 5% dividend...$2,500.....it's effectively paying out 6% before you take into any long term capital gains that may occur. As long as the stock is a solid company with good financials why not consider it a long term hold?
It may not work in every case....but definitely something to consider.
It may not work in every case....but definitely something to consider.
Posted on 4/11/14 at 3:13 am to FootballNostradamus
quote:
Damn how many people on here work for CBI?
I would imagine quite a few used to work for Shaw who just got bought out by CBI.
Posted on 4/11/14 at 3:51 am to TJG210
That is literally a textbook example of an incorrect assumption people commonly make.
Paying a dividend doesn't effect risk at all. Just google it.
Paying a dividend doesn't effect risk at all. Just google it.
Posted on 4/11/14 at 12:40 pm to b-rab2
as much as you can. little by little It adds up
have 70k worth of my companys stock at a discount
have 70k worth of my companys stock at a discount
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