Comments on: Benefits http://www.consumerismcommentary.com/2005/06/16/benefits/ A premiere personal finance blog, established 2003. Within, Flexo discusses his own experiences with money, and he and other authors comment on a wide range of personal finance topics. Fri, 19 Mar 2010 22:12:35 +0000 http://wordpress.org/?v=2.9.1 hourly 1 By: Ramithttp://www.consumerismcommentary.com/2005/06/16/benefits/#comment-535 Ramit Sun, 19 Jun 2005 06:02:00 +0000 http://wp.consumerismcommentary.com/?p=350#comment-535 Oops!The correct URL is here: <a href="http://tinyurl.com/8u9ub" rel="nofollow">http://tinyurl.com/8u9ub</a> Oops!

The correct URL is here: http://tinyurl.com/8u9ub

]]> By: Ramithttp://www.consumerismcommentary.com/2005/06/16/benefits/#comment-534 Ramit Sun, 19 Jun 2005 05:59:43 +0000 http://wp.consumerismcommentary.com/?p=350#comment-534 I disagree with PFBlog's comments about flipping it. If it's a bad stock, then sure--get rid of it.But if you flip it in less than a year, you'll pay income-tax rates (~ 35%, basically wiping out any gains). On the other hand, if you hold it at least a year, you'll only pay 5 or 15% in taxes.I'm a big fan of long-term investing, so I'd strongly recommend against selling it just because you'll make a quick buck. If there's still upside in the stock (and if it's a good company, there is, even if it's gone up a little now), you'll be losing out on all those potential gains and incurring trading fees and taxes. Sure, I get your point about not wanting to be overweighted and not wanting to buy at the top; they're all good points. But if you can, try to think long-term, like a 10+ year outlook. Counting all the fees associated with selling, is it a good place to keep your money for the long term?I wrote more about this exact topic here: <a href="http://www.iwillteachyoutoberich.com/archives/2005/05/email_what_to_d.html" rel="nofollow">http://www.iwillteachyoutoberich.com/archives/2005/05/email_what_to_d.html</a> I disagree with PFBlog’s comments about flipping it. If it’s a bad stock, then sure–get rid of it.

But if you flip it in less than a year, you’ll pay income-tax rates (~ 35%, basically wiping out any gains). On the other hand, if you hold it at least a year, you’ll only pay 5 or 15% in taxes.

I’m a big fan of long-term investing, so I’d strongly recommend against selling it just because you’ll make a quick buck. If there’s still upside in the stock (and if it’s a good company, there is, even if it’s gone up a little now), you’ll be losing out on all those potential gains and incurring trading fees and taxes. Sure, I get your point about not wanting to be overweighted and not wanting to buy at the top; they’re all good points. But if you can, try to think long-term, like a 10+ year outlook. Counting all the fees associated with selling, is it a good place to keep your money for the long term?

I wrote more about this exact topic here: http://www.iwillteachyoutoberich.com/archives/2005/05/email_what_to_d.html

]]> By: Personal Finance Bloghttp://www.consumerismcommentary.com/2005/06/16/benefits/#comment-533 Personal Finance Blog Fri, 17 Jun 2005 20:32:25 +0000 http://wp.consumerismcommentary.com/?p=350#comment-533 Yes, it's free money. Don't hold on to the stock, just flip it and pocket the 15% gain. Yes, it’s free money. Don’t hold on to the stock, just flip it and pocket the 15% gain.

]]> By: Steve Mertzhttp://www.consumerismcommentary.com/2005/06/16/benefits/#comment-532 Steve Mertz Fri, 17 Jun 2005 20:21:39 +0000 http://wp.consumerismcommentary.com/?p=350#comment-532 Flexo-fairly common benefit and a good one if the stock isn't a dog. As you mentioned, one of the keys is the hold period-it's usually very short but the second concern is how much comission you get charged when you sell. Flexo-fairly common benefit and a good one if the stock isn’t a dog. As you mentioned, one of the keys is the hold period-it’s usually very short but the second concern is how much comission you get charged when you sell.

]]> By: Jonhttp://www.consumerismcommentary.com/2005/06/16/benefits/#comment-531 Jon Fri, 17 Jun 2005 18:34:03 +0000 http://wp.consumerismcommentary.com/?p=350#comment-531 It's a fairly common option for US companies, and is typically referred to as ESPP (employee stock purchase plan). If the company meets certain IRS tests, it allows employees to purchase stock through payroll deduction at a 15% discount. Most programs chop the period into 6-month intervals, and you buy at 15% below market price on either the first day of the 6 month period, or the last day, whichever is lower. The better plans let you lock that price in for 2 years - meaning if your stock is going up, you're buying at 15% below market price from 2 years back. You can do very well off this. There are typically no holding requirements, but there are special IRS rules on the gains you make - they are usually taxed as regular income instead of capital gains, unless you hold for 2 years. My advice.. invest in it all you can. It's a guaranteed 15% return. It’s a fairly common option for US companies, and is typically referred to as ESPP (employee stock purchase plan). If the company meets certain IRS tests, it allows employees to purchase stock through payroll deduction at a 15% discount. Most programs chop the period into 6-month intervals, and you buy at 15% below market price on either the first day of the 6 month period, or the last day, whichever is lower. The better plans let you lock that price in for 2 years – meaning if your stock is going up, you’re buying at 15% below market price from 2 years back. You can do very well off this. There are typically no holding requirements, but there are special IRS rules on the gains you make – they are usually taxed as regular income instead of capital gains, unless you hold for 2 years. My advice.. invest in it all you can. It’s a guaranteed 15% return.

]]>