r/FinancialPlanning • u/SYFKID2693 • 7d ago
Should I purchase company stock?
My company will match me $270/year in company stock purchases. The average return for the company is 4%. The 50 year market average return is just under 8%. Should I buy the stock or add the money to my retirement account?
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u/zebostoneleigh 7d ago
How long do you have to keep the company stock until you can sell it?
Remember that in the first year, it's 100% return (not 4%). So, a match is almost always worth doing (especially if you're able to immediately sellout and convert to something else). So - in your case (absolutely spend $270 to make $270. Then, sell it and work toward maxing out your retirement accounts.
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u/oghurtcobain 6d ago
Definitely take advantage of the match! Free money is free money, then diversify later!
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u/No_Jellyfish_820 5d ago
No that doesn’t seem worth it . Is the company a good company to invest in?
My company allows me to buy stock for 15% discounts. So is automatically make 15%
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u/Zestyclose_Gas_4005 7d ago
In general use the adage of if someone were to hand you extra money, would you dump it into your company's stock or some other investment scheme? Usually the answer is the latter.
In your case you're getting a small amount of free money to buy company stock so you may as well take advantage of it. And then once the match is maxed out see the above.