31–35 of 35 posts
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Not just this, but also blackout windows. I've seen ESPP shares be granted during hold periods and then you have to incur even MORE risk! Source: experience with Lyft ESPP
Ouch, ESPP that you can't immediately sell are indeed really bad especially when everything is on fire.
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It’s supposed to look up the stock price and display it under the price, but I’ll have to see why it’s not loading. I actually use it to optimize for how much to contribute because when the stock falls you end up hitting the convoluted IRS limit, which degrades the effective return on the total amount of contributions.
Many plans I've participated in cap contributions well before the theoretical 25k limit. Current employer has a very interesting plan that leaves much of the limits up to you which is a double edged sword. If you can figure out how to model the limit, you can make informed decisions when the price falls but for the average employee it's complicated and can cap their contributions way too early. To effectively figure…
But you are correct, the 25k limit is based on all of the purchases made in the calendar year. And the $25k carryover complicates things as well.
Earlier quoted context omitted.
It’s supposed to look up the stock price and display it under the price, but I’ll have to see why it’s not loading. I actually use it to optimize for how much to contribute because when the stock falls you end up hitting the convoluted IRS limit, which degrades the effective return on the total amount of contributions.
Many plans I've participated in cap contributions well before the theoretical 25k limit. Current employer has a very interesting plan that leaves much of the limits up to you which is a double edged sword. If you can figure out how to model the limit, you can make informed decisions when the price falls but for the average employee it's complicated and can cap their contributions way too early. To effectively figure…
Earlier quoted context omitted.
As noted in a few comments below already there are risks still. Immediate execution isn't always possible due to the processing time of shares to your brokerage account and then execution of the trade, but also if your company grants the ESPP shares and it coincides with a black-out period. This adds to the risk you might be taking on. Still usually an amazing return for the time/effort required, but caution all arou…
I've never had an ESPP purchase coincide with a black-out period. If it does, that's pretty shitty of your employer.
I would strongly advise everyone to max out their ESPP contributions (you can contribute a maximum of 15% of your salary, up to the IRS mandated $25,000 limit). Why? Because it's a amazing investment that, if you sell stock immediately on reception, is risk free. I'm going to assume you know how ESPPs work, google them if you don't. Let's do the math: consider a typical ESPP (yours may vary) with a 3 month purchasing…