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Stock as a Gift for Your Kids? It Will Pay Dividends
Are you searching for a gift for a young person in your life that will last a lot longer than the paper it’s wrapped in? Here’s a solution: stock.
Is this kind of gift too high-concept for a kid? If a child is old enough to covet a sneaker, say experts, he’s probably old enough to begin to appreciate stocks—and how their prices reflect how well a company is doing. (Children can’t trade stocks themselves until they’re 18, so you—and potentially the child’s parents—would have to be involved, anyway.) But such a gift can spark a conversational economics lesson about the importance of saving, and waiting. “It’s a great way to introduce kids to the world of investing in a tangible way,” says Robin Taub, a Toronto-based financial consultant and author of “A Parent’s Guide to Raising Money-Smart Kids” (Chartered Professional Accountants of Canada, 2015). With your gift, you can introduce them to websites such as Morningstar or Yahoo Finance, where they can track their holdings. Here are ways to buy:
Gift cards. At Stockpile, an adult can create a custom e-gift card entitling the recipient to buy stock in Apple, Coca-Cola, or hundreds of other choices. Or buy a Stockpile plastic gift card, which is available at Kmart, Office Depot, and Wegmans, among other outlets. The cards show a particular company’s name, but holders can purchase shares—or fractional shares—of many companies or exchange-traded funds. (An adult must open a custodial account to hold a minor’s stock.)
Direct stock purchase. The Walt Disney Company’s direct stock purchase plan lets you buy stock directly from Disney for an initial cash investment of $175, or monthly deductions of $50 from a qualified bank account (the $50 buys a partial share, which builds into multiple shares with subsequent investments and dividends). Other direct plans with kid appeal that let you purchase stock directly include Harley-Davidson and Nike.
Certificates. GiveAShare can send you real, paper stock certificates from companies kids know, including Facebook and Netflix. The basic $40 fee includes a cardboard frame. You may be required to pay $25 additional to a transfer agent.
As to how to wrap it? Well, we’ll leave it up to you about how creative to get!
More Holiday Gift Ideas for . . .
Editor's Note: This article also appeared in the December 2016 issue of Consumer Reports magazine.
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