Stock Info *Newbie*

[downsouthstunna]

Okay so I signed up for the stock purchase plan at the company I work for(wont mention it). Its an I.T. company thats pretty reputable to say the least but I have no idea how the stock thing works.

Lets go into a scenario so I can kinda figure out what I may be looking at in 6months when im able to touch it.
-Stock is worth $400 when I bought
-I put 5% of my check in the purchase plan. I make 40k a year.( 5% of 40k is 2,000)
-At the end of 6months, the stock is valued at $500

Now all this is just hypothetical based on some round square figures so I could get a clear picture on what I might be looking at.

When the period is over, what would I be looking to make?

 

[franklucas]

If you bought $400 worth of stocks and after 6 months the stocks are now worth $500, you made $100 bruh

 

[downsouthstunna]

If you bought $400 worth of stocks and after 6 months the stocks are now worth $500, you made $100 bruh

So as far as the amt that comes out of my check as increments, they only take that out so it would be "cheaper" for us instead of buying it as a whole right then?

 

[downsouthstunna]

If you bought $400 worth of stocks and after 6 months the stocks are now worth $500, you made $100 bruh

And technically it would be $500 since I would own 5 shares right? I buy @ original price of $400 and if I was to sell at end price of $500

 

[monstar]

this article should help with the explanation on how this works

Buying without the middleman
source: http://www.forbes.com/sites/moneybuilder/2012/06/20/how-to-invest-using-direct-stock-purchase-plans/

Years ago, I began buying shares of Kellogg Company (K). In the beginning, I had only $50 per month to invest. Over time, I increased my monthly investment in Kellogg to $150 per month. That money is debited from my checking account by Kellogg’s transfer agent, Wells Fargo, and used to buy Kellogg stock through their Direct Purchase Plan. According to my 2008 year-end statement, I own 142.212 shares of Kellogg.

Over all of these years, for all of these transactions, I have paid no fees to accumulate these shares. Not a dime. All plan administration costs and share purchase costs are paid by Kellogg. Plus, every quarter, when Kellogg pays a dividend to shareholders, my dividend money is automatically used to buy more shares — at no cost to me. On December 16, 2008, a $46.79 dividend payment was applied to my account and used to buy 1.065 additional shares of Kellogg, at no charge to me!

I also buy shares of Pfizer, Inc. (PFE) every month through their transfer agent, Computershare. Pfizer’s plan also costs me nothing. I’ve slowly acquired almost 160 shares of the company, a little bit every month, without paying a dime in commissions or fees. Zip, nada. Like Kellogg, I get a statement in the mail every month, and I can track and manage my account online.

Of course, not all plans are completely free.

I invest $150 per month in General Electric’s plan through their transfer agent, BNY Mellon Shareowner Services, and they charge $1 per purchase. So, only $149 of my $150 is used to buy GE shares. Of course, that’s a lower cost than any discount broker. And my quarterly GE dividends are reinvested (used to purchase additional shares) at no cost.

Microsoft (MSFT) switched transfer agents in the middle of last year, from BNY Mellon to American Stock Transfer & Trust Co (AST). Unfortunately, in this case, the cost of my $100 monthly investment in Microsoft went from $2 to just under $3. Of all the plans I’ve looked into, the flat $5 fee I pay to invest $200 each month in Toyota (TM), is the highest I have seen. Toyota’s transfer agent is BNY Mellon, and I suspect the cost is higher because it is a foreign company, though traded on the NYSE.

 

[monstar]

A few things you need to keep in mind is does you company pay dividends and also how many shares do you have purchased through this plan to this time

As the price and value goes up so does the cost for new investment, you should talk to HR on a serious note to get this information

the more info you have ,the better the decision you can make