Just about everyone has pride in their company, to one extent or another. Corporate picnics and holiday parties are one way of thanking hardworking employees for their time and energy. Stock options are another. But are you willing to take gamble with your hard-earned cash when it comes to investing into the future of your company?
Long before the days of Enron, corporate executives would “sell and duck” from their employees, sometimes getting off completely free from charges or a tiny slap on the wrist, leaving the working folks down and out without a penny to their name. But how is anyone supposed to know what’s going to happen down the road? Unless you have a crystal ball, it’s pretty tough to tell. But there are a few signs that should send up a red flag in the back (or front) of your mind-
- No company should mandate that you purchase their stocks. Promotions and other forms of merit should not be given to those who choose to purchase company stocks.
- Not being offered a discount on stock purchases. I’m not inferring that you need to be offered a discount, but it’s a nice way for a big corporation to show its appreciation. Its basically saying, “Hey- Thanks! And here’s a deal for you to invest in our future, and you’ve already made money!” Another way to look at it is like this: why should you have to pay the same price as some woman who walks in off of the street?
- Being asked to pay in advance or to buy a specific minimum amount of stocks. They just doesn’t make any sense, but they are out there. Don’t be pressured into something you just don’t feel right about.
One of the best employee stock purchase programs out there lets an employee have a predetermined amount of cash taken out of each paycheck for a specific period of time (usually about 6 months) and put into a sort of holding account. At the end of the period, the holding account is used to purchase the stocks at a discount. To take it up a notch, the employee gets the best price of either the period end or beginning, whichever is lower, minus the discount., so it’s a guarantee to make money.
A bit of honest advice? If your heart isn’t 100% into investing in your company’s stock, don’t do it. A simple savings account, 401K, or even investing a bit into index funds will help to take at least some of the worry out of your personal finances.
