I'm just finishing up paying off my student loans (woohoo!) and am starting to look at places I can put my money to make it work for me. I've read Kobliner's Get a Financial Life and am interested in starting with ETF's, but I have a slight dilemma.
I work for a medium-sized company that is publicly traded on the NYSE1. They offer a program where I can allocate up to 15% of my paycheck (after tax) to buy their stock at 85% of the price. The only stipulation being that I have to hold it for 180 days (~6 months).
To me this seems like free money. The second that stock is bought, I've already made 100/85 => 17.6% on my money!
I'm very tempted to allocate the full 15% of my paychecks to this, but I know that it's important to diversify my investments.
I was planning to use 20% of each paycheck to play with for investments--would 15% company stock/5% ETF be diversified enough? Should I drop to 10%/10% or lower? Is there some reason I'm missing to not go all in on this?
I don't think this is a duplicate. The marked duplicate is asking (very broadly) how often "is good" to invest in an ESPP. I know I'm already going to be investing every chance that I get. My concern is one of diversification, which the duplicate makes no mention of. I've made it clear that I'm comparing between ESPP and ETF, while the duplicate seems to simply ask "what are your experiences with ESPP?"
1. It's worth noting that this company's stock has done incredibly well in the last 10 years. While I'm not expecting it to keep the same growth it has, this company is definitely not going anywhere anytime soon. An investment with them would definitely be safe. I have the utmost confidence in this company.