I have a unique opportunity to buy shares of my company stock. Long back story that isn’t pertinent to my question, but from the moment I found out about this until the date I need to buy the shares, is exactly one week. So I need money fast.
To go “all in” on the full amount of shares I’m allowed to buy would be 48K. I don’t keep that much in liquid funds at any given time. My question is, what would you do? I am absolutely certain I will do this.... I’m just not sure which option is best.
- I have access to my HELOC that has a 1.99% intro rate for 12 months. I can draw from this if needed to buy all the shares I’m allowed to.
- I could draw from my Vanguard taxable account to get most of what I need and supplement the rest with cash. I opened that account less than a year ago, so the gains aren’t huge but will still be taxable. (If I did this, the funds may not settle in time, so I do have a short term solution in this case.)
The really cool thing is that every December I’ll get a dividend check. The dividend price per share last year was $2. The year before was $1.50. I’d guess we’ll be in the $1.75 range this year.
So.... if I invest 48K now, in December I could get around $16,000 this year. That’s a very nice ROI for a 6 month investment! (No opportunity to reinvest the dividends, as we are capped at how many shares we can own.) I could pay off the HELOC probably in 2 years if I was diligent. Haven’t thought through that piece very much just yet.
So, should I take the money from the HELOC, or from Vanguard? Am I forgetting to consider an angle?
Thanks!