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Forbes: 8 Opportunities in Your Paycheck You May Be Missing

Employee Stock Purchase Plans (ESPP)

Discounts: Your employer may provide the opportunity to purchase company stock at a discount of as much as 15% from typically the lower of the stock price at the beginning and at the end of a given offering period.

Pitfalls to Avoid: Be careful of having too much of your portfolio in any one stock, especially if it’s your employer. No matter how safe your company may seem, you never know what can happen and the last thing you want is to lose a significant portion of your assets at the same time as you lose your job. There are also some tax pitfalls. If it’s a non-qualified plan, you’ll have to pay ordinary income tax on the discount when you purchase the shares. If it’s qualified, you won’t pay the tax when you purchase the shares but you’ll have to hold them an extra year to qualify for the lower capital gains rate on the growth.

(iStock)

More from Forbes:
10 Common Money Management Mistakes That You’re Probably Making
How To Teach Kids About Money: 10 Dos And Don’ts
10 Common Myths That Could Be Hurting Your Retirement Planning



The opinions expressed are solely those of the author and do not necessarily reflect the views of Comcast.

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