ESPP-Employee Stock Purchase Plan

Majority of companies in Silicon Valley are publicly traded companies, if we work for these companies, we should be offered something call ESP (Employee Stock Purchase) or ESPP (Employee Stock Purchase Plan) every 6 months or a year. It’s a benefit program that allows Employees to buy company’s stocks at a 15% discount from the lowest price of the year or every 6 months periods.

Many people I know never participate in this program because they claim they don’t have enough money to buy many shares of the high stock prices, or they can’t afford to put away money monthly or they don’t want to lose money when the stock goes down. Whatever the case may be, I think it’s a great benefit to make 15% interest on some savings (normally 10% of our salary) even when we sell the stocks as soon as they’re purchased. These days, due to our thriving company, we always get 25%-50% appreciation on our investment to our company.

It doesn’t matter how much the company stock price is, it’s the percentages appreciation that counts. Say our company stock price is $100. and we’re offered $85 price (15% less than market). We contribute $3000 every six months and we can get 35 shares which we can sell right away for $3500. I would put $500 x 2 = $1000 profit for the kids Christmas, home improvements or new tires for the car.


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