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An Update on My ESPP Flip

Six months ago I shared that my company ESPP had become my property tax escrow.

ESPP Information

A quick refresher…an employee stock purchase plan (ESPP) is a benefit offered by some publicly traded corporations.  It's basically an account you stash money into for a specified period of time (6 months for me), and at the end of the term, your funds are automatically used to buy company stock.  Where's the benefit, you say?  Well, you get to buy the stock at a discount (for me, 85% of the price).  That's a 15% return.  Nice!

Flipping an ESPP

“Flipping” the ESPP is when you immediately sell your company shares upon purchase.  I plan on flipping my ESPP for a couple of reasons.  One, I have too much of my portfolio and livelihood invested in my company already (i.e. too many eggs in one basket).  Two, I need this money to pay my property taxes, due in January 2009.

Are ESPP Flips Ethical?

Some have questioned flipping as unethical.  I challenged that idea initially, and have been validated by my company's recent move.  The brokerage firm that handles our ESPP process allows you to sign up for ESPP Quicksale.  The Quicksale is what it sounds like: by activating Quicksale, the broker will immediately sell my shares of stock in the company upon purchase.  They are essentially doing the flip for me.  Hardly unethical I'd say.

The ESPP Flip Proceeds

The cash proceeds from the Quicksale will be deposited into my account or sent to me as soon as the transaction settles.  We've signed up for the next round of ESPP as well.  I see this as another great short-term savings vehicle we're likely going to use every time it's offered.

Do you have a ESPP like me?  Do you flip it?  If not, why?  Do you see it as unethical?

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Last Edited: July 24, 2017 @ 1:58 pm
About Philip Taylor

Philip Taylor, aka "PT", is a former practicing CPA, blogger, podcaster, husband, and father of three. PT is also the founder and CEO of FinCon, the conference and community dedicated to helping other financial influencers and brands. He created this website back in 2007 to share his thoughts on money, hold himself accountable, and to meet others passionate about moving toward financial independence.

PT uses Personal Capital to keep track of his financial life. This free software allows him to review his net worth regularly, analyze his investments, and make decisions about his financial future.

PT keeps a portion of his emergency fund in Betterment, the automatic investing tool that makes investing super simple. Betterment focuses on what matters most: savings rate, time in the market, investing costs, and taxes. PT recommends this service to anyone looking to get started investing for themselves.

All the content on this blog is original and created or edited by PT.

Comments

  1. ChristianPF says:

    I don’t see an ethical issue with that. I understand that the company is trying to increase the employees ownership of the company, but they are still your shares and you have the right to do what you would like with them. Right?

  2. No Debt Plan says:

    How would it ever be unethical?

    If they didn’t have an ESPP, would people argue you should buy company stock with your paycheck? I doubt it. The company could just as easily give you the cash value of the stock. You are free to do with it as you please.

    People are odd, sometimes…