Give the Gift of Stock
At least twice a year, most of us are task with the job of finding the perfect gift for a nephew, grandson, cousin, or grandchild. Every Christmas and birthday are a must, but it doesn’t stop there, you have graduations, confirmations, and the list goes on. What do you get year after year for the child that seems to have everything? More importantly, how much do you spend, especially considering the child will only remember what they received from you in their later years. Why not give the gift of stock?
Nearly every discount broker offers a convenient way to buy securities for a minor, usually through a custodial account. Custodial accounts allow the child to be the owner of the account and its assets, but lets you manage the account until the child reaches a certain age, at which point the account would be handed over. Some brokers even print out certificates that are similar to the actual stock certificate. I know the child probably won’t be thrilled, I probably wouldn’t be, but consider spending 80% on the security and another 20% on a toy or more pleasing gift? If you consider the amount of times throughout a child’s life that is associated with gifts, the total amount spent really begins to add up.
Just as an example, if you purchase $100 worth of securities for a child each year, by the time they reach the age of 18, they would get approximately $4,500 from you. Perhaps buying them their first car? Now, they will thank you. Not only will they appreciate the sum your gifts will grow to, but maybe it will get them engaged in their investments and expose them to compound interest at an age we all wished we would have learned it. Do any of you buy the gift of stock? $
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Comments
@ FFB: I actually got a good friend of ours a single share of Johnson & Johnson for his baby’s birthday. You can get tons of different frames and there are lots of options so that you can frame your share as a copy and put the real deal in a lock box in the event that you are worried about it. Be sure to get it early as they are specially printed and you will need time to get it shipped.
Wow… great idea. I’ve never thought of giving stock as a gift; I mean, how many kids are going to give you the status of “favorite uncle” for an investment they can’t touch for years?
They’ll thank you later!
PS Love the blog! Your logo is awesome! 
I think the gift of stock is a wonderful idea. Especially for a younger person who can benefit from that powerful law called coumpounded interest.
Although I am new on My Investment Journey:
http://www.ourstockmarketjourney.blogspot.com/
I hope to learn has much as I can, do well at it, and share what I am learning with any others who will listen.
Be Well.
Great idea! There are companies out there that will frame the certificate as a gift. This can be real exciting for a child receiving Disney stock - yup you own a piece of Hannah Montana!