Author Topic: ESPP - Sell some off?  (Read 1445 times)

Gordon Shumway

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ESPP - Sell some off?
« on: March 22, 2017, 01:00:41 PM »
Howdy, first post here so apologies if I'm not posting this in the correct area.

I have ~$40k in my parent company ESPP with ~$33k available to sell now (the rest is on hold due to plan requirements to hold for a year from purchase).  I get a 13% after taxes discount in this plan and the dividends add up nicely.  I am currently putting 4% of my salary towards this.

My 401k balance is $340k and I have been maxing it out.  I also have ~$4k in a self managed investment account with an ETF.  Cash savings is currently at $29k.

My wife and I (1 kid and 1 on the way) live in very expensive Southern California and we were unable to get a house during the last market downturn (long story of failed short sales and bad luck).  We currently rent a place from family for a good price but looking to buy when we can or if we have to move (grandparents own our rented house and they are old, not inheriting it etc). 

My question is this.. do I have too much tied up in my ESPP?  Should I sell some off and put it in a money market savings acct so it is liquid if we do need the money sooner than later?  The plan all along with this ESPP account was to use it as a "mid-term" savings vehicle for a house.  Or should I continue earning the dividends on this balance and let it grow?  My parent company is doing well, the stock is up well above past purchase prices.  I would just hate to get to the point where we need the money and have it be down a lot but I also don't want that much money sitting in a low interest account. 

TIA for any suggestions! 

Gordon Shumway

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Re: ESPP - Sell some off?
« Reply #1 on: March 22, 2017, 03:35:16 PM »
Thanks, bender..

I'm thinking I will sell $10k now and let the rest sit for a bit since buying a house is realistically at least 6 months off from now at the earliest. 

Annnd, I probably should have posted this in the Investor Alley section.  Noob :/

MoonLiteNite

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Re: ESPP - Sell some off?
« Reply #2 on: March 23, 2017, 02:51:20 AM »
Provided the company outlook looks decent, and the dividend yield is decent. I would hold it.
Remember when you sell it you get taxed on it.

I do not think 10% is too much in an ESPP, it is greater risk if your company falls under, but 10% isn't the end of the world by any means.

MayDay

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Re: ESPP - Sell some off?
« Reply #3 on: March 23, 2017, 04:08:43 AM »
We don't hold any. As soon as we can sell, we sell.

This is partially because the company has gone through bankruptcy about ten years ago, partially because H puts in 15% of salary, so it's a lot of money, partially because we are looking to buy a house and have two old cars.  But mostly because we just don't want to own too much stock from.his employer.

Case

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Re: ESPP - Sell some off?
« Reply #4 on: March 25, 2017, 09:35:56 AM »
Howdy, first post here so apologies if I'm not posting this in the correct area.

I have ~$40k in my parent company ESPP with ~$33k available to sell now (the rest is on hold due to plan requirements to hold for a year from purchase).  I get a 13% after taxes discount in this plan and the dividends add up nicely.  I am currently putting 4% of my salary towards this.

My 401k balance is $340k and I have been maxing it out.  I also have ~$4k in a self managed investment account with an ETF.  Cash savings is currently at $29k.

My wife and I (1 kid and 1 on the way) live in very expensive Southern California and we were unable to get a house during the last market downturn (long story of failed short sales and bad luck).  We currently rent a place from family for a good price but looking to buy when we can or if we have to move (grandparents own our rented house and they are old, not inheriting it etc). 

My question is this.. do I have too much tied up in my ESPP?  Should I sell some off and put it in a money market savings acct so it is liquid if we do need the money sooner than later?  The plan all along with this ESPP account was to use it as a "mid-term" savings vehicle for a house.  Or should I continue earning the dividends on this balance and let it grow?  My parent company is doing well, the stock is up well above past purchase prices.  I would just hate to get to the point where we need the money and have it be down a lot but I also don't want that much money sitting in a low interest account. 

TIA for any suggestions!

Hard to say without knowing the company, and therefore understanding how promising the stock is.  But anyways, in most cases you are putting too many of your eggs in one basket (money invested in your primary source of income).  If the company tanks you coudl get fired and your investments would go to shit as well.

Unless you have a lot of faith in the company (and for the stock to grow), better to sell to mitigate risk.  You will incur taxes.

bryan995

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Re: ESPP - Sell some off?
« Reply #5 on: March 27, 2017, 12:45:49 AM »
I have 15% of my income going into an ESPP with a double lookback and 15% discount. I sell them the very second they are released and then reinvest in vanguard index funds. Too many eggs in one basket for me to hold onto them regardless of how good the company outlook is.

Lately - since we are planning to buy a home by the end of this year, I've been selling and holding cash in an ally 1% savings account.