Yahoo Finance 3 financial gifts that are better than cash
‘Tis officially the season for lackluster gift-giving. Every year, we face the same predicament. What’s the hottest gadget or thoughtful gesture to give my loved one? For kids, maybe it’s the bizarrely popular Hatchimal or the Nerf Drone Blaster.
But let’s be real: They’ll be history in a few weeks, accumulating dust in a closet. How about a lovely body butter for a good friend? She’ll just regift it. Perhaps a fancy bottle of wine? Great idea, but you can’t remember if he likes a Cab Sav or Pinot Noir.
So maybe you should forget the material stuff this year. Here are a few alternative investing gift ideas for your loved ones. They can help people grow their money so they can buy what they really need. After all, smart is sexy.
Save, donate or splurge
Sow is a platform that strives to help kids spend, donate and save money wisely. Essentially, it’s an interactive online savings account that gives people the chance to dictate the kinds of presents they want to receive. Kids can “sow” their money in three ways: save for college or an investment account; donate to a specific cause or charity; or spend it on something on their wishlist. Though founder Tanya Van Court said she is targeting children and young adults, “sowers” range in age from 14 months to 42 years old.
Help your kids set up Sow accounts and give them a seed funding of $20 or $50 dollars that they can allocate for something they really want — a new bike, for instance. In a sense it’s crowdfunding for big-ticket items that will last a while.
Buy a share of their favorite public company
How about giving someone a piece of their favorite company? You know that your daughter loves to play Elsa in “Frozen,” her favorite food is a Shake Shack burger and her favorite toy is an iPad. SparkGift is a company that lets you gift stock — Disney (DIS), Shake Shack (SHAK), and Apple (AAPL) are a few suggestions — to anyone within a matter of minutes. The company creates a gift certificate and sends it to the recipient, who will have to set up an account on the site.
Accounts are opened with Folio Institutional, an online brokerage firm that handles all of the trades conducted through SparkGift. Unfortunately, as the gift giver, you’ll be charged $2.95 and a 3% fee, but recipients don’t need to pay anything to redeem the gift. You can give between $20 and $2,000 per gift, and they never expire so can invest at any point in time. Most traditional brokers won’t allow you to do this, so this is a fun, exciting alternative to teach someone about investing and help him/her take part in the growth of his favorite brands. SparkGift makes investing fun and simple so young investors (or any first-time investor for that matter) can learn about the stock market.
Get into real estate
For the riskier (and wealthier) folks, you can always consider real estate. Fundrise is a crowdfunding platform that’s attempting to get rid of barriers to entry for those who want to invest in real estate but don’t have the know-how or capital to do it on their own. The minimum investment is $1,000 and you can work with your friend or loved one to help him or her set up an account. The company focuses on midsize assets, which they claim provide opportunities and better risk-adjusted returns (and is less competitive than large institutional properties). Last year, the company launched the first-ever online real estate investment trusts (eREITs) — one focused on debt assets and the other on equity.
This year, it launched three new eREITS, which are broken up geographically — East Coast, Midwest and the West Coast. A REIT is modeled after a mutual fund, which means the company is actively managing the properties, while you can lean back and take a passive role as investor. And so far, it’s paid off: The debt REIT has a return of 11% and equity has an 8% payout, according to Fundrise COO Brandon Jenkins.
The huge upside? You don’t need to be an accredited investor to get in on the action, thanks to the US Securities and Exchange Commission (SEC)’s Regulation A+, which allows small companies to offer and sell up to $50 million of securities over a year to non-accredited investors. FundRise is on track to raise $250 million from individual investors in a little over a year.
Sow, SparkGift and Fundrise may not offer you a tangible item to hand to your spouse, child or friend, but you’ll bestow them with the best gift of all — opportunities for wealth creation.
Melody Hahm is a writer at Yahoo Finance, covering entrepreneurship, technology and real estate. Read more from Melody here & follow her on Twitter @melodyhahm.
