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Employee Stock Program Question
    #11768760 -

So this morning I went ahead and signed up for my job's (Wal-Mart) ESP.  Just want to get some opinions on whether or not this is a good idea.  Heres some info:

- Company matches 15 cents on the dollar for whatever you buy (up to 1800 a year)

- I have it set up so it puts $40 in every pay period (bi-weekly)

- $20 to liquidate, plus 5 cents for every share.

- Once my shares' worth reaches $2000.00, I am able to take out loans using stock as collateral for half of my net share value, at a low interest rate (around 1.5%)  I can take out loans ranging between $1,000 and $100,000.  (This is more of a non-issue for me, but if I need money for school for a semester or two, it may help)

- A little more than half of my income is disposable, so I won't really miss the $80 a month either way.  As a matter of fact, my cell phone bill has dropped about $40, so I'll notice even less. :yesnod:

Here's a link to look at some Wal-Mart (WMT) stock trends and history:

Wal-Mart Stock Information

So whatcha think? Savvy investor move or dumbass move? :strokebeard:


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Re: Employee Stock Program Question [Re: The Ecstatic]
    #11768874 -

I demand advice  :kingcrankey:


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Re: Employee Stock Program Question [Re: The Ecstatic]
    #11768888 -

Stocks are good. But it's a long-term thing. Just tuck it away for a later day.


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You make it all possible. Doesn't it feel good?

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Re: Employee Stock Program Question [Re: Doc_T]
    #11768899 -

Doc_T said:
Stocks are good. But it's a long-term thing. Just tuck it away for a later day.


Thats what I plan on doing.  I'll probably work there until I'm done with school, when I'll probably just liquidate it and put all the money in an IRA.


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Re: Employee Stock Program Question [Re: The Ecstatic]
    #11768912 -

Or hold onto the stocks. WalMart is probably going to increase in value at least as much as an IRA.
Obviously depends on how much you have and when it is, though.


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You make it all possible. Doesn't it feel good?

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Re: Employee Stock Program Question [Re: Doc_T]
    #11769507 -

Funny you mention WalMart stock. Just last month I got a Christmas tree from them and started talking to the employee. Cool guy, but he thought that the espp was just a way to take his money because I asked about it. Albeit Walmart is a GREAT company and a powerful stock. I highly suggest figuring out how to "maximize" your company match and put more than $20 or $40 into there.

Also an important thing to find is dividends. MAKE SURE THEY REINVEST YOUR DIVIDENDS. <------ I preach that.. not just in these forums, but in life in general. I can not disclose what company I work for, but they also offer a 15% discount on stock purchase and I do partake. The max you can contribute is 15%, so I GLADLY pump 15% of my paycheck into it. I make my bills work around my investments. My investments don't work around my bills. People say I'm going to lose all of my money. With all honesty I'm smarter than that and if they're telling me that, I'm financially smarter than they are.

Anyway... ask about your dividends and DO NOT roll over into an IRA later in life. Either keep the investment or sell it and buy a house or pay off a car. Fuck loans. Never take a loan against it. That 1% that you pay in interest turns into 1% that you have to gain back on your original investment.

So companies force their employees to reinvest their dividends and other companies give you the option of reinvesting them. For now keep your dividends reinvested! If you EVER need money and they allow you to take your dividend as cash, then that will be your money. You never borrow against your investment and you always reinvest dividends. If you need money, you will make your money revolve around those dividend "checks".


My 2 cents.

Simply put, GOOD choice on buying Walmart stock. *reinvest those dividends!*


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Can't stop the Trance! Dance!! DANCE!!!

A good archive of Trance music to listen to when you want to relax or trip with.
www.trance104.com

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Re: Employee Stock Program Question [Re: Trance104]
    #11769511 -

On an unrelated side note, boxxy is HOT... lol


--------------------
Can't stop the Trance! Dance!! DANCE!!!

A good archive of Trance music to listen to when you want to relax or trip with.
www.trance104.com

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Re: Employee Stock Program Question [Re: The Ecstatic]
    #11771289 -

I think Wal-Mart is OK, although it seems to have a decent amount of movement and fluctuation, so you need to pay attention to where you buy in at.  In general though, it's better to have money invested, rather than cash.

I don't think your "employee option" is all that attractive due to the cap.  Even if you invested the max amount per year ($1800) at 15% you'd only be making about $270 bucks above and beyond what a non-employee.

If you were looking at this as a genuine retirement deal and wouldn't touch it till 60 or so, I think its a poor deal.  Many company sponsored 401k and retirement programs are far superior.

Lastly, look into whether or not your purchasing is on taxable income.  If its pre-tax, you'll be saving nearly double the 15% off (since the money is taxed the normal rate of whatever bracket you're in).  If it's on your net income (e.g. post tax, net wages) I might stay away all together.


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...the whole experience is (and is as) a profound piece of knowledge.  It is an indellible experience; it is forever known.  I have known myself in a way I doubt I would have ever occurred except as it did.

Smith, P.  Bull. Menninger Clinic (1959) 23:20-27; p. 27.

...most subjects find the experience valuable, some find it frightening, and many say that is it uniquely lovely.

Osmond, H.  Annals, NY Acad Science (1957) 66:418-434; p.436

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Re: Employee Stock Program Question [Re: badchad]
    #11773173 -

badchad said:
I think Wal-Mart is OK, although it seems to have a decent amount of movement and fluctuation, so you need to pay attention to where you buy in at.  In general though, it's better to have money invested, rather than cash.

I don't think your "employee option" is all that attractive due to the cap.  Even if you invested the max amount per year ($1800) at 15% you'd only be making about $270 bucks above and beyond what a non-employee.

If you were looking at this as a genuine retirement deal and wouldn't touch it till 60 or so, I think its a poor deal.  Many company sponsored 401k and retirement programs are far superior.

Lastly, look into whether or not your purchasing is on taxable income.  If its pre-tax, you'll be saving nearly double the 15% off (since the money is taxed the normal rate of whatever bracket you're in).  If it's on your net income (e.g. post tax, net wages) I might stay away all together.



You're forgetting the dividends part. On top of capital gain the current yield is 2.03% annually (w/o dividend reinvestment). For now there's no savings account that will pay you that much on ANY amount of money *currently*. It's a sound investment.

I can tell you right off that bat that it IS after taxes. It's considered income that goes into your hands and then leaves your hand as an investment. You start off with a 15% gain. That's a benefit all of it's own. 15% is currently about $8 (53.69). So... $8 gain PER share  from the start? Count me in!

Also, you have NO say when they buy you in. It's pre-determined and in the fine print. In my case it's at the end of every month. They take your money that comes out of each pay check for the money and at the end invest it - along with everyone elses - at the end of the month. Each company is different, but that's how mine operates. It makes COMPLETE sense when broken down. The fine print will also tell you how it's calculated and you will have a brokerage account automatically set-up through the brokerage of their choice. In my experience, it will either be Fidelity or E*Trade. There are no fees associated with the accounts. The only time you will be paying a fee is when you SELL!


--------------------
Can't stop the Trance! Dance!! DANCE!!!

A good archive of Trance music to listen to when you want to relax or trip with.
www.trance104.com

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Re: Employee Stock Program Question [Re: Trance104]
    #11774909 -

As a general investment, it's a very good deal (at least, up to the cap).

For a genuine, bonafide retirement program, it sounds very weak IMO.  Many employers will match employee contributions 100%, pre-taxed dollars.  If you really want a retirement option, see if they offer a 401k.


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...the whole experience is (and is as) a profound piece of knowledge.  It is an indellible experience; it is forever known.  I have known myself in a way I doubt I would have ever occurred except as it did.

Smith, P.  Bull. Menninger Clinic (1959) 23:20-27; p. 27.

...most subjects find the experience valuable, some find it frightening, and many say that is it uniquely lovely.

Osmond, H.  Annals, NY Acad Science (1957) 66:418-434; p.436

Edited by badchad (01/06/10 04:54 AM)

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Re: Employee Stock Program Question [Re: badchad]
    #11775313 -

Thanks for all the replies guys.

I'm not really planning on anything extremely long term, its just basically a way to put away money until I'm finished with school and start my career.

I will def look into what they offer for 401k very soon.

Thanks again.


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Re: Employee Stock Program Question [Re: The Ecstatic]
    #11775951 -

After re-reading the first post, I was not comparing it to a 401k. Which is also a GREAT investment because its pre tax dollars and as Badchad said, they will match money. I was looking at it as an investment. I see walmart as a WONDERFUL long term investment and I think the $1800 match means that Walmart will contribute $1800 if YOU were to invest $12,000 a year. So you would have to put aside $461.53 a paycheck to get FULL match. I wouldn't suggest that unless you either really make a lot of money or don't need money. THEN I would say go for it! Crazy? Maybe? Financially smart? YES. Anyway, that all depends on your complete situation. $40 a month will only buy you fractional shares... for now... with the 15% match however, you'll get a $46 investment. Almost 1 share currently.

Anyway, I see it as a good oppurtunity to... as you said.... save some money!

ESPP's also got me VERY interested in learning about the stock market. That's how I truely got started. I was never guided by anyone and I learned everything I know now, on my own. I still learn stuff about the stock market.... almost everyday.


--------------------
Can't stop the Trance! Dance!! DANCE!!!

A good archive of Trance music to listen to when you want to relax or trip with.
www.trance104.com

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