Is it worth participating in ESPP (employee stock purchase plan, 15% discount) if you plan on immediately selling? Do they usually let you do that? Is it even worth it after short term capital gains tax? It sounds like depending on how the market does before the purchase you could do better then your percentage discount (there's a 14 day look-back)?
Do you want an automatic ~15% return on your money?
WTF kind of logic is this? You only pay tax on the gains not the principal. So even if your capital gains tax rate is 20%, you are making a 12% GUARANTEED return if you sell immediately. “It sounds like depending on the market you could do better”? You may experience gains, you may experience losses. If you really had some mythical investment where you only gain > 12% return, why not reinvest your ESPP gains into this magical opportunity
Or just let everyone know which stocks are going to yield 15% in less than 3 months.
From what I understand the 15% is guaranteed (of stock goes down before purchase they give you 15%off fair market value). I know you only pay taxes on the gains, more wondering if it's worth the headache after taxes since there's a 24k cap.
It’s free money why not? Sell immediately and if the stock price drops a little before you can sell do a stop limit order and wait for the price to come back up. That’s worked out well for me so far. Don’t count on it making you any money over the 15% though unless your company’s stock is constantly growing and you can hold on to it for a year and if that was the case they’d prob be offering RSUs as part of your comp package
The moment you buy any stock on the exchange, you have a 0% gain at that moment. The moment you buy stock through your ESPP, you have over 15% gain immediately. That's an instant advantage. I said "over" because normally it's structured as a discount. A 15% discount translates to about 18% gain with your money. Really, the only question is why companies bother to offer an ESPP, because the rational thing to do is sell immediately for a guaranteed gain. That defeats the purpose of getting employee ownership of the company.
Yes, yes, yes, and yes.
Where else are you getting 15% basically guaranteed return on investment...?
The sad thing is that ESPP contributions are capped at something like $20k which means you can't make anything more than $2400 by selling immediately. Still better than nothing
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That’s the point, selling immediately