Author Topic: ESPP - No discount - worth it?  (Read 665 times)

APBioSpartan

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ESPP - No discount - worth it?
« on: April 08, 2019, 05:29:05 AM »
    Hello fellow Mustachians!

    2019 has brought lots of change for my wife and I.  I just recently started a new job (yay!) in a new state (double yay!) and we will be moving out west in the next few weeks. 

    My new employer has a stock purchase plan, but it does not offer any discount(s).  It does, however, offer automatic deductions from my paycheck as well as free trade commissions.  Has anyone participated in a similar program?  Worth it?
    I have participated in an ESPP before with a different employer, but it offered a 15% discount and I sold the shares right away and treated it like a mini-bonus.  It doesn't seem like there are many benefits to participating in my new employers program but would like to see if anyone in this community has had a similar experience. 

    For context:
    • We are both 27 years old
    • We are recently debt free (2 cars + student loans paid off)
    • We dont have much in cash savings (~5k) and we currently rent
    • ~200k combined salary
    • ~135k saved in 401k's/Roth's - no after tax accounts
    • Would like to buy a home in the next few years, and will obviously need to save a lot for the down payment :)

    Thank you in advance for your advice!
« Last Edit: April 08, 2019, 05:30:50 AM by APBioSpartan »

atxian

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Re: ESPP - No discount - worth it?
« Reply #1 on: April 08, 2019, 05:51:24 AM »
Does it make the purchase each paycheck? Or does it save up over some period and purchase at the lowest price during that period?

If it’s the former, no benefit, don’t do it

If it’s the latter, slight benefit, it gives you a no risk investment, but I would sell as soon as the shares hit your account


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matchewed

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Re: ESPP - No discount - worth it?
« Reply #2 on: April 08, 2019, 07:42:02 AM »
No.

a) Too many eggs in one basket.
b) No discount.
c) You're saving for a house in the next few years? Save that money in a savings account instead.