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Buy Stock as a Gift for Your Kids – It Could 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 possible solution: Buy stock as a gift.

Any kid who’s old enough to covet sneakers is, experts says, 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’ll have to be involved in their investments, anyway.)

One benefit to stock as a gift is that it can spark a basic 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).

Along with your gift of stocks, you can introduce your son or daughter to websites such as Morningstar and 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 an actual Stockpile gift card, available at Amazon, Target, and other retailers.

The Stockpile cards display a particular company’s name (shown above), 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. Other direct plans with kid appeal 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 might also have to pay an additional amount, typically $25, to cover any transfer agent fee.

As to how to wrap stock as a gift? Well, we’ll leave it up to you about how creative to get!

The above was first reported by Consumer Reports.

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