Stock Question

[browniehound]

Let's just wait and see if he takes the browniehound "diversify yourself to riches" advice.

Face facts - the only way to build wealth is to put ALL your eggs in one basket and leverage the fire out of it.

No other way.

That's how you have people walking out the door with $10+ million in stock.

Then you diversify.

You diversify at that point because you have built wealth you want to preserve.

Nope, you're never going to be one of the Big Boy$ unless you take on some risk (and in many cases LOTS of it).

I realize that runs contrary to the labor union mindset. They nearly universally don't want to accept any risk - or responsibility, for that matter - but want to be treated and want to benefit as if they had.

Still doesn't work that way though.

Powak, you don't happen to own a casino in Vegas do you?

 

[satellitedriver]

Let's just wait and see if he takes the browniehound "diversify yourself to riches" advice.

Face facts - the only way to build wealth is to put ALL your eggs in one basket and leverage the fire out of it.

No other way.

That's how you have people walking out the door with $10+ million in stock.

Then you diversify.

You diversify at that point because you have built wealth you want to preserve.

Nope, you're never going to be one of the Big Boy$ unless you take on some risk (and in many cases LOTS of it).

I realize that runs contrary to the labor union mindset. They nearly universally don't want to accept any risk - or responsibility, for that matter - but want to be treated and want to benefit as if they had.

Still doesn't work that way though.

Leverage all your assets?
All eggs in one basket?
No other way?
That same mentality of market timing, overloading in a single investment and leverage ruined peoples investments in 1929, not to mention the recent decade and the ripple effect of ENRON.
It is easy to break one stick. Twenty sticks are hard to break.
The truisms of the past still hold true today.
Do not put all your eggs in one basket.
No labor union mindset here, just common sense.

 

[Just another tip]

[Remember you bought at a 10% discount so that was a 4% gain minus the discount. The discount is good and that is why I buy UPS stock, just wish we didn`t have to hold shares for 2 years now!]

Let's not forget that when you go to sell this stock you have to pay ordinary income on the difference between the actual price and your discounted price. I believe they have a special payroll run and this just gets added into your W-2 if you are still an employee. The hard part to remember is that when you do your schedule D, your cost basis is the actual stock price, not the discounted stock price because you are already paying tax on the difference.

 

[Raw]

Let's not forget that when you go to sell this stock you have to pay ordinary income on the difference between the actual price and your discounted price. I believe they have a special payroll run and this just gets added into your W-2 if you are still an employee. The hard part to remember is that when you do your schedule D, your cost basis is the actual stock price, not the discounted stock price because you are already paying tax on the difference.

I have people that do my return!!

 

[LeddySS98]

so given the stock is a 10% gain even if the stock flat lined and never went up again, it's still a 10% gain....

so after the 2 year wait is it still a 10% gain... or do you divide that in 2, one for each year making it a 5% gain???

 

[satellitedriver]

so given the stock is a 10% gain even if the stock flat lined and never went up again, it's still a 10% gain....

so after the 2 year wait is it still a 10% gain... or do you divide that in 2, one for each year making it a 5% gain???

Stocks do not flat line.
You could have bought a 5.5% CD and have gotten better results over time, than you could have with discount UPS stock.
The same money, over the same time frame, has earned me over 300% in yield.
I believe in UPS as a company and an employer.
If you are talking about investments to grow your money into the future, then UPS stock is not, IMHO, the place to put it.

 

[Channahon]

I think it would depend how much stock you have.

I'm not sure about Wyobills calculation, BUT the stocks dividend does go up every year.

If I'm not mistaken, I thought I read the stock dividends have doubled since the stock went public. Not bad, if you want to hold onto a long term investment and the dividends can be a nice way to get additional income.

 

[Channahon]

I have people that do my return!!

If I remeber right, you have to hold onto your discounted UPS stock for 2 years before it is taxed as regular income. So if you sell before the 2 years, whatever your tax bracket is you pay regular taxes. If you hold onto it for over 2 years, the stock is taxed at capital gains at 15%. Hold onto your wallet, that may change when the democrats get in office.

 

[wyobill]

If I'm not mistaken, I thought I read the stock dividends have doubled since the stock went public. Not bad, if you want to hold onto a long term investment and the dividends can be a nice way to get additional income.

UPS stock dividend was .17 in 2000 today it is .42
I think that is more than doubled by my arithmatic.
Check Fex EX dividend out.

 

[ihadit]

Stocks do not flat line.
You could have bought a 5.5% CD and have gotten better results over time, than you could have with discount UPS stock.
The same money, over the same time frame, has earned me over 300% in yield.
I believe in UPS as a company and an employer.
If you are talking about investments to grow your money into the future, then UPS stock is not, IMHO, the place to put it.

Could not agree more. Since I dumped this loser, I've also tripled my money. UPS lost 11% last year, so far this year down over 5%. Yet corporate still thinks they warrant extravagant bonuses!!!!!!

 

[satellitedriver]

UPS stock dividend was .17 in 2000 today it is .42
I think that is more than doubled by my arithmatic.
Check Fex EX dividend out.

Yes, your math is correct, but you forgot to include inflation in your equation.
Jan. 2000, stock price was $70.74.
May 2007 stock price is $70.74.(weird how that one worked out)
The 5 dividends in 2000 equaled .85% return. Inflation rate in 2000 was 2.74%. You only lost 1.89%, due to inflation.
The 5 dividends in 2007 will equal about 2.10%. Inflation rate in 2007 is projected to be 2.78%. You will only lose .68% this year.
So, after 7 years the stock has not grown and the dividends have lost to inflation.
The arithmatic is simple.
If one wants growth and yield, UPS stock is not one to own.
I truly wish it was.
Pax

 

[had_enough]

Roll it into something else. Been gone 3 yrs, the 1st year kept the money in 401k with minimal gain. Rolled it into another retirement fund less than 2 yrs ago when stock was low 80's and have seen just under a 19% return. If I kept it there, I would be in the negative return since stock is at 71.