Case Study - What to do with Stock Purchase Program proceeds

[ncornilsen]

Hello,

In a week or so, I should recieve control of about 50 shares of PCP. (Total of ~13K.)  I'm trying to decide what to do with it.

First, my debts:

$12400 on 0%  CITI card, used for contruction of house addition. Goes to 11.5% in September of 2014.
$1900 on Chase card, mainly because I maxed the above card and needed to buy a few things to keep this project moving. 12.5%.
$3950 on 3.24% Motorcycle loan.

Total: 18250

Jan 2014 Incomes:
-13K from Stock Sale
-$1800 After Tax bonus
-$120 in free cash from regular pay

Total: $15980


Here's what I was thinking of doing:
-Kill the Chase card.
-Reserve $1000 to finish addition.
-Start a Roth IRA, for 2013. Put $3000 into this.
-Put $500 into my 2014 HSA
-Pay the rest on the CITI card


Now, over the rest of the year, I expect about $2000 in tax returns,  I'll get $1800 quarterly bonuses, have about $750 a month to put into investments and paying debt. Based on this, I'll finish killing the CITI card by March, and the Motorcycle loan by July. Using my Jan 1 2015 stock purchase money, I'll finish fully funding my 2014 and most of 2015's Roth IRA and HSA accounts.

Does anyone see a better way to allocate this money?

I make about $85000 a year, plus about $9600 in room rental income. So, I don't qualify for traditional IRAs. I also contribute 6% to my 401K, to get my employer match.

[marty998]

Do you actually have to sell the shares? Why not keep them?

Appears you earn enough that all debts should be able to be cleared pretty easily before September when the 0% deal expires on the Citi card without using the share sale proceeds.

[chasesfish]

Is 13k your net, or your gross from the stock sale?  I'm used to having to contribute 40% of a restricted stock release to tax withholding.

[ncornilsen]

Do you actually have to sell the shares? Why not keep them?

Appears you earn enough that all debts should be able to be cleared pretty easily before September when the 0% deal expires on the Citi card without using the share sale proceeds.

I hadn't thought about that option.  The thought was that selling would help me diversify, and the cashflow improvements related to being debt free would buy me some flexibility. Aside from my 401K, I have no other investments at this point, and I hate being 100% in on one singular company.  It also leaves me in a situation where I'm continuing to be in debt, and I want to break that habit.

But, I may sell 3K to get my Roth IRA started and leave the most possible room for 2014 contributions, which should help me diversify a bit as well.  I'm still kinda leary about having that much of my net worth tied up in one stock.

13K is gross. I'll pay the taxes next year, and basically drive my tax return to 0.