Company share scheme, dividend shares.
Discussion
I have been in a company share scheme for nearly 5 years now. Up to now i have 'reinvested' the dividend (currently the divi has been frozen), this infact ties these dividend shares up for a further 3 years before I own them, and they themselves qualify for a dividend payment.
Now would I be better to get the dividend cash payout and reinvest this in a S&S ISA (currently VLS 60). This clearly de-risks some of the capital, however reduces the overall compound growth of the number of shares in the scheme.
We aren't talking mega sums here, currently circa around £5k of shares in the company, at the current dismal price - I am just breaking even, including 40% tax incentive haha. The divi payout maybe £3-400 annually, at the current share holding.
Thoughts would be appreciated!
Now would I be better to get the dividend cash payout and reinvest this in a S&S ISA (currently VLS 60). This clearly de-risks some of the capital, however reduces the overall compound growth of the number of shares in the scheme.
We aren't talking mega sums here, currently circa around £5k of shares in the company, at the current dismal price - I am just breaking even, including 40% tax incentive haha. The divi payout maybe £3-400 annually, at the current share holding.
Thoughts would be appreciated!
I always find that people seem to invest with a different set of rules when it is shares in the company they work for and I never quite understand this logic.
I always try and separate the logic out : i.e If I had the money and not the shares - would I choose to buy shares in this company and why. 9 times out of ten, the answer would be no yet most people continue to hold the shares regardless.
Also with your job, salary, any bonus, etc - in fact your whole livelihood tied up in this one company - doesn't it actually make sense to diversify your investments away from it. It might actually make sense to buy the competitor or a different segment entirely for diversification purposes.
I always try and separate the logic out : i.e If I had the money and not the shares - would I choose to buy shares in this company and why. 9 times out of ten, the answer would be no yet most people continue to hold the shares regardless.
Also with your job, salary, any bonus, etc - in fact your whole livelihood tied up in this one company - doesn't it actually make sense to diversify your investments away from it. It might actually make sense to buy the competitor or a different segment entirely for diversification purposes.
fat80b said:
I always find that people seem to invest with a different set of rules when it is shares in the company they work for and I never quite understand this logic.
I always try and separate the logic out : i.e If I had the money and not the shares - would I choose to buy shares in this company and why. 9 times out of ten, the answer would be no yet most people continue to hold the shares regardless.
Also with your job, salary, any bonus, etc - in fact your whole livelihood tied up in this one company - doesn't it actually make sense to diversify your investments away from it. It might actually make sense to buy the competitor or a different segment entirely for diversification purposes.
Yeah I tend to agree! It's only £150 a month, on which I recieved 1 in 10 shares free, save 40% tax, and receive a dividend. But maybe that answers the fact that I should grab as much out of them as possible, than tieing up them up in the firm.I always try and separate the logic out : i.e If I had the money and not the shares - would I choose to buy shares in this company and why. 9 times out of ten, the answer would be no yet most people continue to hold the shares regardless.
Also with your job, salary, any bonus, etc - in fact your whole livelihood tied up in this one company - doesn't it actually make sense to diversify your investments away from it. It might actually make sense to buy the competitor or a different segment entirely for diversification purposes.
Cheers
Rob, to be honest if that was me and I was concerned about diversification I'd just reduce the monthly contribution, using the difference for that something else. Seems simpler than faffing about waiting for a dividend payment to come in, then shifting it over to a fund. If that's lazy of me, fair enough.
If you didn't want to do that because you are wanting to maximise on the tax savings and the matching shares, then sounds like your priority is the benefits the share plan brings over diversification, so why not just leave it as it is anyway.
If you didn't want to do that because you are wanting to maximise on the tax savings and the matching shares, then sounds like your priority is the benefits the share plan brings over diversification, so why not just leave it as it is anyway.
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