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Ask Dave

Stock Options

Jake's company has a stock option, but Dave doesn't think he would make much off of it and shouldn't take it anyways since he's still in debt.

QUESTION: Jake works for a good company that has stock options. He has done a budget and is trying to get out of debt. He can take a little bit away and have $200 a month to put into the stock options. The company buys the stock once a quarter and buys it at 85% of its market value. Should he do that?

ANSWER: All companies purchase at 85% of the value. It’s a bonus assuming the stock price is steady. In a year’s time, it has more than a 15% move up or down. I wouldn’t do it. Honestly, how much would you make off of it?