I don’t know. Do you like free money? Then yah – you should probably participate in your company’s ESPP.
ESPP stands for Employee Stock Purchase Program. It allows employees to buy their company stock at a discount.
So for instance, every 6 months you give your company $8500 and they give you back $10,000 worth of stock.
It’s like exchanging $85 for a Benjamin Franklin. (Only ESPP’s and grandparents will give you that type of deal!)
And after the stock is purchased, then you SELL! SELL! SELL!
Your company stock is going gangbusters? Mazel tov!!! All those unvested RSU’s will be worth a lot more once they vest.
But in the meantime, don’t roll the dice with your guaranteed 15% return. Sell the stock the same day it’s purchased and put it in one of your financial buckets.
All ESPP’s max out at $25,000 for the year. So that’s a guaranteed $3750 you can make every year.
So max out your ESPP contribution immediately! I mean, unless you don’t like free money.
This blog is for educational purposes only and should not be considered financial or legal advice. These statements have been simplified to illustrate the concept. Consult your Financial Planner or Estate Attorney for help with your specific situation.