I am new to the world of finance and could use some guidance from those of you who understand the game much better than I. Is contributing toward's the ESPP worthwhile, and if so- what percentage of your paycheck is good to invest? Any insight is greatly appreciated.
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Just put a trailing stop loss order into your ESPP plan and forget about it. You’ll probably make at least some money.
@7uzw,
you may have done some math but you didn't do all the right math. By the time you factor in the contribution limits, taxes and increased costs for your accountant, you could easily lose by contributing to the ESPP.
You're probably one of those people who uses a gallon of gas to drive across town to save 3¢ a gallon at the pump.
@7uzw is 100% correct.
If you actually work here you should be looking elsewhere for an opportunity in a field that is unrelated to finance, accounting or general business
@4tjz it's a beta stock. You would get it at a 5% discount every month and then it resets. BK stock could sell off 60% y/y and you'd still breakeven (i.e. it would have to be down 5% in every single 3 day settle period each month). Do some math bud.
That’s very good advice. Never turn down free money. Quite sure that none of those carping about their raise being a pay cut will bother to pursue it because it involves paperwork and basis tracking.
Hard times indeed… not.
@4ckj,
Barely moves??? It's currently down more than 25% the last 12 months!
@3pvn,
They changed it so you don't get the match if you leave before it's paid at the end of the year.
I should have also pointed out that there is a federal match for lower income earners but it's capped somewhere around $1,000. But that still probably wouldn't make it worth it for them to tie up their money in a 401(k) with stringent rules, higher fees and higher tax rates.
BNY allows you to buy BK stock at a 5% discount (capped at a % of your salary). It occurs once a month, and you can immediately sell it. While I would never advise owning BK stock, owning it for a few days is low risk and it is a way to give yourself a small raise. Very little market risk as BK stock barely moves. It's essentially dollar cost averaging at a 5% discount.
Don't buy BNY stock. I signed up for the free (for six months) Voya 401(k) management plan, and the only change they made to my investments was to sell the small amount of BNY stock I had.
I like to max out my HSA account every year. That money has triple tax savings, and I can invest all but $1000 into VTSAX, which I do. I pay medical expenses out of pocket and leave the money in the HSA account. After that, I put as much as possible in my 401(k), but no BNY stock.
BK stock is at an all time high in dollars per share. This reflects the administration’s complete erosion of the dollar due to inflation, not any business plan by the company. So it’s easy for Robin to give feel good BK shares to all employees. Cash out as soon as possible.
“Put enough into the index funds of your 401(k) to meet the full company match if you think you'll still be here long enough to get it.”
What does this mean? Your contribution and the match are yours. even if you leave you can roll the 401K over. With the delayed match you may have to wait a bit to move it. Most people have the opposite problem… not getting around to roll it over.
Here is some basic passive investment advice. It is very difficult to beat the S&P 500 over time. Stick all of your 401k contributions into the Large Cap fund, and put the matching funds in there also. Once you have some skin in the game you’ll be more interested in investing so read the business news and get interested.
Ordinarily I would advise to take the match in company stock as tax laws give favorable tax relief when cashing out company stock. However BK stock is such a horrible investment that this advantage completely disappears.
Do NOT put any money into BK stock and do NOT listen to blanket statements about maxing out your 401(k).
Put enough into the index funds of your 401(k) to meet the full company match if you think you'll still be here long enough to get it. Maybe even split your contributions between the roth and traditional 401(k) to limit your risks.
Then max out your HSA which is 100% tax free if spent on medical.
Then, if you're income is lower, you're better off in a taxable account where you'll pay 0% on dividends and capital gains and not have severe restrictions on your money. Once you reach the limit where your returns are taxed, consider the Roth 401(k) and/or traditional 401(k) to limit the taxes on your investments.
If it was worth anything, I wonder would Robin be offering every employee 10 shares each?
0% would be ny reccommendation
It is not wise to invest in any one individual company stock when you have a variety of funds to choose from. If that company runs into serious trouble, your investment will take a hit.
ETF's often have so many different securities, they can be somewhat naturally hedged.
I treat it as an old school Christmas club. I don't expect to make any profit, but it sets aside some funds that are relatively easy to get at. Car needs some repairs...found an old motorcycle on Craigslist that you want.....whatever.
Cash in what you need instead of using a credit card.
Banks are extremely top heavy. Less than 5% of employees have RSUs.
But still… avoid BK stock. You work here, do you feel that we are well run or that we even have a strategy?
That would be a really bad financial move. throw your money into the large cap fund in the 401K, make sure that you don’t take the match in company stock and start reading about investing. Take your time while you learn.
From a risk perspective, it’s not a great idea to load up on the stock of your employer.
After all, if something happens to the company, it could cause you to lose your income and, after you’ve been there a while and assuming you are bonus-eligible, you will have a portion of your bonus tied up in RSUs of company stock.
Better not to concentrate your risk like that.
Please do not purchase any BNY stock. Take any extra money available and put into your 401k plan, or invest separately on your own - and stay away from BNY stock.
If you look at BNY's stock price over decades - it has gone nowhere. This is not a company you would want to invest your hard-earned money.