Employer Stocks

TraumTraum Regular
edited April 2011 in Life
I work at a place that offers the option to without X amount of money from each paycheck to buy stocks in the company with. I am kinda thinking about doing this so that the stocks will just build up and it be a way of saving money. In case I lose the job or something happens and I need extra cash I could sell the stocks that I have purchased.

Any ideas/thoughts on this? I've never dabbled in any kinds of stocks before so I really know nothing about this. I'm also concerned that the money taken out to buy the stocks may be more than the money gained once I decide to sell them at some point... thus resulting in loss of money.


  • spinkyspinky Acolyte
    edited April 2011
    It can be a good deal, BUT putting all your investing into one stock isn't a good idea usually. Buying stock like that is usually a good idea for long term investing such as retirement, not as a form of emergency fund. If the company you work for offers a 401k with decent matching funds you may want to consider that instead since it comes out of pre-tax dollars. Most companies that offer stocks to employees thru paycheck deductions take whatever money you have taken out every week put it into an account and then every quarter or so they buy the stocks, some also do it by what is called block purchases. What that means is you're giving them an interest free loan for a few months and the money isn't used to buy stocks until there is enough to buy 20 or whatever number they set to be bought at once.
  • bra1234bra1234 New Arrival
    edited April 2011
    As far as employee stock purchase yes I have participated and it did work as a small savings account but don't count that as your only investment vehicle.
  • TraumTraum Regular
    edited April 2011
    I wasn't expecting it to be my only form of investment/savings. I just thought it might be nice since it automatically deducts X amount of money from my paycheck and just slowly builds up. Like I said if I find myself out of work it would be nice to have that little bit of cash when I really needed it.
  • AnarchyMasterAnarchyMaster Regular
    edited April 2011
    Most stock options let you exercise the purchase of a lump sum of the company's stocks at a set price any time you want. That way if the market value of the stocks goes below the set price you don't have to exercise the option.

    If your plan simply purchases stocks with your paychecks at the market value at the given time of the paycheck, I wouldn't go for it. Most good stock options are better deals than that.
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