@Call Me What You Want Even Cheap – Amen, brother. That’s what makes budgeting so important – to help ensure you can take advantage of these types of investments.

@Lance@MoneyLife&More – Yeah, in this fluctuating market you want to make sure that you can sell right away.

@Joe@Retire By 40 – I agree it’s not a good idea to put all your eggs in one basket. As an employee, I already have my wages coming from the company. It would be too risky to carry a significant portion of my investments in the stock of the same company.

@bobbi – Luckily for me, my company still offers the %15 discount. They have reduced the % of my pay I can put into the program from each paycheck though.
I ran some quick numbers. At a 5% discount to market, the annualized return would be comparable to a 19% interest rate. Depending on how much they let you put into the program maybe it’s not worth it. But 19% still smokes most other investments with comparable risk.

@Edward Antrobus III – That’s why I sell my stock right away. This minimizes your risk. Were I required to hold onto the stock for a significant amount of time I would have to give it a lot more thought. But if you are allowed to sell immediately (3 days per stock sale settlement rules) this risk is minimal.

@Supadad33 – Wow, that 2-year look back thing sounds great when the stock price is going up. And without the 3 day waiting period there is exactly ZERO risk.

@Marvin @ San Jose Options – I disagree. If you’ll re-read the article I don’t advocate holding onto ESPP stock. Your wages are already tied to your job and if your investments are tied their as well you are doubly at risk should the company go south. Executive malfeasance aside, your risk of losing 18% in a 3 day period is minimal.

@Jenna, Adaptu Community Manager – I applaud you for saving for your future. However, I would be cautious about carrying a significant portion of your investments in the stock of your employer. For longer term goals you might consider selling the stock and putting the money into a mutual fund to lower your risk.

@matt – That’s awesome! I’m glad that I could help you make your decision.

@Big Dion – Yup, it’s always a good idea to keep an eye on your nest egg.

@ Emily – But that was because he held onto the stock. If you sell it right away, you should be good.

I’m a big fan of ESPPs in general, but just make sure that you are watching your company’s stock and the market, in general. You could lose all that money and your bosses will NOT be looking out for you.

That said, if I had the chance to get some ESPP stock, I would be all over that. As the late poet laureate Russell Jones once pondered, “Why would you not want some free money?”

So definitely YMMV. As an ESPP participant, you owe it to yourself to take the time to at least understand a few basics of stock market investing. Because in the end, that’s exactly what you are doing, playing the markets at a 15% discount.