Investing In Your Employer?

One of the topics we had mentioned in our posts from earlier this year was an employee stock purchase plan offered by Robin’s employer. We have never participated in any stock purchase plans before through our employers but being a bit more vigilant as part of Project Money, we decided to give the program further consideration.

The program itself seemed straightforward – post tax payroll deductions that would be invested monthly at a discounted rate. We would be able to select any amount ($5 per week minimum) and that money would be invested in whole and fractional shares of company stock on the last trading day of each month at a 10% discount. We could also manage the account via an online portal, which would allow us to adjust the contribution amount – but the change would not take effect until the following month. What was most intriguing thing to us was that the even through the purchase of the stock from that month’s contributions all occur on the last trading day of the month, the 10% discount is applied to the lower of the closing market price on the first or last trading day of the month.

While we are still doing bit more digging on the holding period associated with the program, and what impact that might have on taxes, we are planning to give the program a try. As part of Project Money we took a wholistic look at our finances, and as part of our research and discussions with our coach and a Summit Financial Advisor, determined that we may not have our Edvest contributions (college savings) maximized. We are planning to offset a portion of our current Edvest contributions and utilize those funds for the employee stock purchase plan. This goal is to bring us both closer to alignment with our intent for the Edvest account, while maximizing the upside and flexibility of our invested funds.