Taking Advantage Of Your Company's Stock Purchase Plan And Retirement Fund
- Date: 2010-05-11 - Word Count: 363
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Everyone wants to make money. Unfortunately, there are few ways to go from $50 to one million (though many web site scams will try and tell you different). However, there are a number of great ways to see constant steady growth with minimal risk. Stock purchase plans and retirement funds are two great ways to do this.
The first is the 401K offers. Most companies offer you some kind of percentage of your salary for which they'll match your investments in your 401K. This amount will be anywhere from 2-8% of your income.
The second option is the stock purchase plans offered by companies. These plans will give you discounts on the companies stock, offered usually about once a quarter, at a 10-20% discount. Once again, you'll be allowed to do this with a percentage of your salary, between say 5 and 15%.
So it's pretty obvious these are important, but it's not as obvious JUST how important these are. What's so great about them? You're basically guaranteed a GREAT interest rate on your money, and an easy way to save it.
Think about it... if you put 5% of your income into your 401K as matched by your employer, it's the equivalent to putting in 10%. Without doing any sort of clever research on investments or anything, you've just doubled your investment in minutes. While extended over it's lifetime, the earned interest rate will taper off, you'll always get some growth on this money which will be a solid percentage in the long term.
Likewise, you're buying stock at a 10% discount. Again, now when you buy that stock, you're getting a solid asset with an immediate 10% growth on your investment. And where your 401k money is stuck in there until you retire, your stock becomes available for sale after a few months from your purchase, meaning you can cash out and just take your growth on your investment if you really don't want that stock (given a relatively stable market of course...).
Again, these plans aren't going to immediately bless you with millions of dollars. However, with relatively no work involved, both opportunities allow you to see a significant growth on your holdings. So do it.
The first is the 401K offers. Most companies offer you some kind of percentage of your salary for which they'll match your investments in your 401K. This amount will be anywhere from 2-8% of your income.
The second option is the stock purchase plans offered by companies. These plans will give you discounts on the companies stock, offered usually about once a quarter, at a 10-20% discount. Once again, you'll be allowed to do this with a percentage of your salary, between say 5 and 15%.
So it's pretty obvious these are important, but it's not as obvious JUST how important these are. What's so great about them? You're basically guaranteed a GREAT interest rate on your money, and an easy way to save it.
Think about it... if you put 5% of your income into your 401K as matched by your employer, it's the equivalent to putting in 10%. Without doing any sort of clever research on investments or anything, you've just doubled your investment in minutes. While extended over it's lifetime, the earned interest rate will taper off, you'll always get some growth on this money which will be a solid percentage in the long term.
Likewise, you're buying stock at a 10% discount. Again, now when you buy that stock, you're getting a solid asset with an immediate 10% growth on your investment. And where your 401k money is stuck in there until you retire, your stock becomes available for sale after a few months from your purchase, meaning you can cash out and just take your growth on your investment if you really don't want that stock (given a relatively stable market of course...).
Again, these plans aren't going to immediately bless you with millions of dollars. However, with relatively no work involved, both opportunities allow you to see a significant growth on your holdings. So do it.
Related Tags: stock, companies, employment purchase plan
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