So my company has an Employee Stock Purchase Plan where I can buy shares at a 5% discount, but I can’t sell them for three whole years.
Is this even worth considering? That seems like a long time to be stuck with a stock for such a small discount. Would you do it? How do you decide if an ESPP is worth it?
Not worth it unless you’re working at a rock-solid company with a proven track record. If it were a 20% discount, maybe it’d be worth thinking about, but 5% is nothing when you’re locked in for three years.
@Jess
Even at 20% I’d think twice. A basic 60/40 portfolio has averaged around 8% annually over time, and that comes with way less risk than betting on a single stock. Over three years, that’s about 25% total growth (not guaranteed, but still).
@Lin
From what I understand, it’s a lockup period, not a vesting thing. Even if you quit, the shares are yours—you just can’t sell them for three years.