Thread regarding Cisco Systems Inc. layoffs

What to do with your $ while at Cisco...

Just making the rounds to those in it for the long haul...do these and your net worth will be north of $1M, easily, if you are going to ride it out...until your LR card is drawn:

  1. Max out your 401k.

  2. Max out your ESPP.

  3. Sell ESPP original cost (your cost), and sell the amount that was your salary contribution, when the ESPP amount is fully qualified. Don’t sell the percentage the company percentage as discount; that’s free money.

  4. Get a 15 year mortgage on a realistic property. Smaller newer house. Don’t buy a mansion.

  5. Each time you cash in your ESPP, buy a Roth IRA. If your spouse works, watch the contribution allowance. Most folks reading this will be Roth eligible even with the above ESPP cycle. You want to do this as a cycle, you will never be taxed again on the Roth’s.

  6. Make one extra mortgage payment a year. You will be able to pay off the house in ten years.

  7. Don’t buy Tesla or BMW. Nice cars but get a commuter car.

  8. Get a good financial planner and a good accountant to do your taxes.

  9. Live frugally while at your time at Cisco.

I was LR’d at the 18 year mark, salary was just barely north of $100k at end.

Doing the above, was able to pay off a now $350k home, get 401k, ESPP, and Roth IRAs up to $1.5M. Hired on with $30k savings in 2000.

Cisco was great company for me, I know it can be a political pain to work there but it does have perks. If you remember where you are going long term, and most likely someday your LR paperwork will arrive.

Don’t waste your money, do the above, and you’ll easily be a millionaire when you leave...and on to the next part of your technology career.

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Post ID: @OP+Y0jvsL6

9 replies (most recent on top)

you have to pay taxes (short-term/payroll level) on the gain from the discount on shares. My CPA helped me with my last sale of ESPP. The taxes on the 15% discount was almost as much as the long-term taxed stock. the .gov gets you coming and going

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Post ID: @8waf+Y0jvsL6

The Roth part is key. Ask any old timer around for the 2000 run. Nice to see the stock rise...but diversify.

RSUs...don't sell..that's Cisco's money

Your ESPN contribution? Yeah it's nice to see it increase...but it represents your money and your time.

Diversify your original sunk cost once it is sellable via a long term capital gain.

You will be glad you did.

Think about building a big giant ESPN and RSU decade long stock horde and then (God Forbid)...a Nortel or Enron occurs...anything can happen...just spread your risk...

The $ represents your hard spent time

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Post ID: @2pyu+Y0jvsL6

Nice autocorrect...ESPN? E S P P

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Post ID: @2eni+Y0jvsL6

@Y0jvsL6-2thf

Exactly.

Track the actual cost of your salary contribution. Say it's $5000 every six months.

The company is nicely going to offer the 15% discount on shares.

When your original $5000 contribution, for that six month period, is later fully qualified as a long term investment, take your original $5000 out.

Think about it...with time, you are going to be able to take out your original every-six-month dollar contribution, out of older lots, as the value goes up. Key is track your sunk cost.

Why Roth? Diversification. Yes stock is climbing, but you don't want all eggs in one basket. Thanks for the ESPN match, that extra %15 is yours to keep. You would be surprised how much even retaining that small amount will add up over a decade or more.

The Roth IRA is important, because you will never, ever, be taxed again on that money. Do it now. Fidelity has an extremely easy to use Roth IRA setup, and you can have it auto-invest your original ESPP cost.

Get an assembly line going. You will be glad you did. Cisco is a cool company in that everyone should be able to set this up, if you are ESPN eligible. You will be glad you did at the end of your hopefully long and prosperous stay. Plus it will make you feel good about your efforts...just takes discipline...and no Tesla or BMW...

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Post ID: @2mfw+Y0jvsL6

Sell ESPP original cost (your cost), and sell the amount that was your salary contribution, when the ESPP amount is fully qualified. Don’t sell the percentage the company percentage as discount; that’s free money.

This makes no sense. Please clarify. You contribute to ESPP and buy at a 15% discount every 6 month. Do you just mean sell that and then take the money with the 15% gain and put into a roth ira every 6 months?

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Post ID: @2thf+Y0jvsL6

Rtp

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Post ID: @1rzg+Y0jvsL6

Where can you buy a house that cheap where there are Cisco jobs?

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Post ID: @1gda+Y0jvsL6

Good advice

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Post ID: @1zzj+Y0jvsL6

Solid advice. It takes some serious discipline but you will be ever thankful when the day comes.

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Post ID: @1rrg+Y0jvsL6

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