OT - Money / Investing Thread (aka financial no stupid questions)

[847badgerfan]

My company has an option for an ESPP With a look back provision and buying at a discount. I’m Very much aware that I will pay less than taxes if I hold onto that stock for a year. But I also know that I can only sell the stock four weeks a year and have seen it swing absolutely wildly.

So we will be taking the short-term growth and any of the little extra boosts it provides and calling it a day from there.

That's a good way to do things, if it works.

Mrs. 847 used to get her BAX stocks at a 25% discount, up to 20% of her pay.

We did that for 20 years.

BAX didn't start to get wild until after we unloaded (major tax event!), thankfully.

She knows a lot of people who have lost their ass.

[FearlessF]

I feel blessed to have an education, and experience here. 

I let professionals manage my retirement money but I watch closely.

Best advice I can give anyone is cliche it so simple:

1:  diversify
2: play the long game.

this has worked very well for me, so far

[utee94]

this has worked very well for me, so far

Indeed.  Well enough to put a poor dirt farmer into a fancy Corvette!

[FearlessF]

and more importantly, given me the freedom to retire comfortably and early

I guess a low budget Vette is part of the comfortably

[Riffraft]

It was easier for me to marry my money manager.

[847badgerfan]

It was easier for me to marry my money manager.

Now that's love.

[FearlessF]

I tried to help my Ex manage money - didn't work, she wouldn't allow it.

[betarhoalphadelta]

My company has an option for an ESPP With a look back provision and buying at a discount. I’m Very much aware that I will pay less than taxes if I hold onto that stock for a year. But I also know that I can only sell the stock four weeks a year and have seen it swing absolutely wildly.

So we will be taking the short-term growth and any of the little extra boosts it provides and calling it a day from there.

Yeah, this can be a good thing. We have this where it's 5% below close on the ESPP buy date--and it's up to a 2-year lookback. So it's a minimum 5% immediate bump, but a lot more if the stock has moved. We don't have limits on when we can sell. 

I'll have two more purchases this year that are based on a lookback to last May's stock price. Yesterday's close was just a hair over 10x what my purchase price is the next two rounds. 

I max my 401K, just started the IRA last year, but the constant is that I put away the max (10%) of my income into the ESPP. I was largely looking at this money over the last decade as my emergency fund. But this year, if stock prices hold, buying stock using 10% of my income that's worth 10x my buy price is pretty much the equivalent of doubling my income. 

Badge gets mad every time I talk about how the divorce wrecked my finances and pushed me into renting. Well, Badge doesn't need to cry for me any more 

[847badgerfan]

I'd like to think some of us around here were of some value.

[bayareabadger]

That's a good way to do things, if it works.

Mrs. 847 used to get her BAX stocks at a 25% discount, up to 20% of her pay.

We did that for 20 years.

BAX didn't start to get wild until after we unloaded (major tax event!), thankfully.

She knows a lot of people who have lost their ass.

In my first few years of the company, the stock dropped like 90% at one point.

And this mostly reflected that it had just been pretty overheated when I got there. That’s fine. But it also means the chances are it’s not gonna grow in line with a safer index fund and the inability to sell on demand leave me a little too antsy.

and considering I can get a 15% discount twice a year plus look back, that ain’t bad.

[betarhoalphadelta]

But it also means the chances are it’s not gonna grow in line with a safer index fund and the inability to sell on demand leave me a little too antsy.

and considering I can get a 15% discount twice a year plus look back, that ain’t bad.

Immediate 15% return beats the S&P 500 annual return on average. And if you're buying based on a lower lookback price, it's even higher. 

So selling it ASAP and then turning around and throwing that in an index fund is still worth maxing out your ESPP contributions. Only problem is that you pay STCG on that 15%, but it's still more than if you were just throwing it in the index from your paycheck. 

[utee94]

After we went private, and then back public, we no longer have an ESPP.  I made a decent chunk on the first go-round but I'd only been working for the company for a couple of years when we went private.

[MikeDeTiger]

One of my good friends I used to talk about a lot here in my Austin days was fully vested in his company several years ago, which included a big chunk of company stock.  Shortly after that they went public and the company's worth exponentially accelerated rather quickly.  Then they laid him off.  He wound up selling his stock, which had, in a matter of weeks, become worth a couple million.  He took a nice tax hit for it, but overall he didn't regret it.  And a piece of it helped float him along, as he wound up being out of work for well over half a year. 

I guess if you get laid off, it's nice for them to hyper-inflate your net worth on your way out the door.   

[betarhoalphadelta]

This could go in the grumpy thread, but it's more related to this discussion...

What makes me grumpy--on the behalf of others, not me--is all the people I know who have either regularly sold their ESPP shares immediately as normal practice, or sold out of our spun-off company stock they got in the split really cheap over the last year before [or at an earlier stage of] the run up. 

I mean, I just feel bad for them. The lotto numbers hit, and they missed it. 

This run was probably a once-in-a-lifetime opportunity. I can't imagine how much they're probably kicking themselves right now. It makes me sad.