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[EU] Buying company shares at my job - worth it? (discuss.tchncs.de)

submitted 1 year ago* (last edited 1 year ago) by [email protected] to c/[email protected]

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As the title mentions, the company I work at is offering free shares when buying back some of the company's shares, as well as a discount, depending on the amount of shares purchased.

Could any of you advise me if it would be a good idea to start investing into this? If not, could anyone suggest any other investment avenues to a complete n00b like me?

Thanks in advance!

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[–] tpWinthropeIII 2 points 1 year ago

Take the free ones. Ignore the discounted ones, don't buy them.

There is too much concentration in your livelihood when you invest in your employer. For example, and I know too many examples of this, if your employer starts doing badly, you can not only lose your job, but they might move out of town leaving your home in a state where you may need to sell it in a depressed market. Often the shares you would have invested in the company are worth too little to sell. Your assets, your job, your home, all take a hit at the same crazy time. Not worth it.

Instead, invest in broad-market index funds. Go to Bogleheads where they discuss this and ask there. If you like momentum, arguably the greatest investor that has ever lived, Warren Buffett recommends a split between 90% SPY or IVV (S&P500) and 10% cash. The S&P500 is something like a momentum fund of the top winners of the US economy, and constantly changing.

Your employer is only trying to tie you down and have real skin in the game so that you'll work harder. Ignore the tendency.

Best of luck.