Author Topic: Investment gift for a young child?  (Read 6279 times)

rawsted

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Investment gift for a young child?
« on: November 24, 2014, 01:28:47 PM »
I wasn't sure where to post this (Ask A Mustachian, Investor Alley, Mini Money Mustaches), so to the mods: feel free to move as you see fit...

The holidays are coming up and, although I've somehow convinced my family of the value of the mutual gift of non-giving, we all agreed that the children be excluded from this arrangement, which I think is entirely reasonable. I had the thought of purchasing treasury bonds for the newest member of the family, my nephew, who is just shy of 2 but, aside from possibly being a novel gift, I'm not optimistic that the growth of the thing will put a smile on his face whenever he decides to cash it in as an adult.

What are some other options? Preferably something that can be represented by certificate, so that I actually have a "present" to put under the tree that he (or his parents) can open.

Thanks!

Joel

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Re: Investment gift for a young child?
« Reply #1 on: November 24, 2014, 07:35:45 PM »
I setup 529 college funds for my nephews and nieces. I make contributions for the various gift giving holidays, and manage the funds. You can print a certificate for them to unwrap.

mozar

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Re: Investment gift for a young child?
« Reply #2 on: November 24, 2014, 08:31:01 PM »
All my great aunts bought bonds for me when I was born. Pretty great to cash it out when I was 21. I think it was 400 or so.

mak1277

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Re: Investment gift for a young child?
« Reply #3 on: November 25, 2014, 06:22:15 AM »
Whatever you do, can I suggest making an actual toy, or even (gasp!) spending a dollar at the dollar store to buy something the kid will play with? :-)

Hannah

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Re: Investment gift for a young child?
« Reply #4 on: November 25, 2014, 06:47:04 AM »
Maybe you could give a piggy bank or something like that.

One of my co workers puts $50 bucks in an UTMA or a college savings plan for each of his 5 nieces/nephews for their birthdays and for Christmas. It seems boring, but the oldest (age 10) has close to $1600 in his account. That is easily a semesters worth of rent or four years of books for most college students. When he is physically present he also takes them out for a special treat (like ice cream).

He's pretty bad at guessing what kids are like, so its probably best that he doesn't attempt to give them toys or clothes or other gifts.

rawsted

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Re: Investment gift for a young child?
« Reply #5 on: November 25, 2014, 07:17:57 AM »
I setup 529 college funds for my nephews and nieces. I make contributions for the various gift giving holidays, and manage the funds. You can print a certificate for them to unwrap.
Thanks for the suggestion, sounds a little too advanced for me at the moment however -- still trying to get my own funds set up and learning how to manage them.

All my great aunts bought bonds for me when I was born. Pretty great to cash it out when I was 21. I think it was 400 or so.
My father's coworkers did this when I was born. I cashed them out to pay for college and they were $900 or so. Not bad.
Interesting, so I guess this is still a viable option after all, seeing as you both appreciated it when you finally used them.

Whatever you do, can I suggest making an actual toy, or even (gasp!) spending a dollar at the dollar store to buy something the kid will play with? :-)
I'm not crafty, and I'd rather not add to the pile of stuff that's going to wind up in the garbage. And he'll already be receiving lots of items to play with from the rest of the family ;)

Maybe you could give a piggy bank or something like that.

One of my co workers puts $50 bucks in an UTMA or a college savings plan for each of his 5 nieces/nephews for their birthdays and for Christmas. It seems boring, but the oldest (age 10) has close to $1600 in his account. That is easily a semesters worth of rent or four years of books for most college students. When he is physically present he also takes them out for a special treat (like ice cream).

He's pretty bad at guessing what kids are like, so its probably best that he doesn't attempt to give them toys or clothes or other gifts.
Piggy bank, while not a bad idea, is really not my style. I doubt he'll be coming into contact with much coinage anyhow, surely not as much as older generations did as children. I'll look into a UTMA or college savings plan, although again, I'm not quite all set up myself, so perhaps the best option for now is just good old fashioned treasury bonds...

In any case, thanks everybody!

MrsPete

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Re: Investment gift for a young child?
« Reply #6 on: November 25, 2014, 07:25:28 AM »
Both sets of grandparents bought into this idea when my kids were young.  At Christmas /birthdays they'd give my kids a $100 savings bond PLUS a book or a small toy.  I thought it was brilliant, and I intend to copy this idea when I'm a grandparent. 

On a slightly related note, my nieces and nephews seem to get so many toys, I've decided to be "the book aunt".  I put some effort into choosing "just right" for each child, and they're always well received. 

Worsted Skeins

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Re: Investment gift for a young child?
« Reply #7 on: November 25, 2014, 09:04:11 AM »
The problem with giving a gift of savings bonds now is that both the giver and the recipient (or recipient's parents) need to have a treasury account.  Paper bonds no longer exist.

When my grandnephew was born, I asked his parents if they wanted to go the bond route or would they prefer to open a savings account at the credit union?  They opted for the latter.

Yeah, I am an exciting aunt (not) giving hand knitted mittens and money for the future.


Frankies Girl

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Re: Investment gift for a young child?
« Reply #8 on: November 25, 2014, 09:50:03 AM »
What about buying them shares in a company like Disney... and then getting the stock certificate framed and then wrap it up with a small Mickey Mouse plush? Darn, they just stopped issuing their awesome paper stock certificates... so getting them now might be more difficult (but collectable as well - the certificates could be worth more than the stock itself depending)

http://www.usatoday.com/story/money/business/2013/10/09/disney-stock-certificates-head-to-never-never-land/2956765/

So a few other backup ideas:

Dreamworks Animation is still offering a paper stock certificate and that would be cute to give with a Shrek plush
http://www.giveashare.com/stock.asp?buy=dreamworks-stock
https://www.oneshare.com/stock/dreamworks
^no idea if these are trusted sites, but gives you a general idea of what it could look like. Would be cool to hang an actual stock certificate on the kid's wall.


Other option: Buy whatever stock seems fun and profitable for a child (Disney, Build-A-Bear, CocaCola) and just give them a plush toy with a note about the stock certificate they now own. I'm sure you could print out the details to give to the parents, and the kid can have the toy.

Worsted Skeins

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Re: Investment gift for a young child?
« Reply #9 on: November 25, 2014, 09:57:36 AM »
What about buying them shares in a company like Disney... and then getting the stock certificate framed and then wrap it up with a small Mickey Mouse plush? Darn, they just stopped issuing their awesome paper stock certificates... so getting them now might be more difficult (but collectable as well - the certificates could be worth more than the stock itself depending)

http://www.usatoday.com/story/money/business/2013/10/09/disney-stock-certificates-head-to-never-never-land/2956765/

So a few other backup ideas:

Dreamworks Animation is still offering a paper stock certificate and that would be cute to give with a Shrek plush
http://www.giveashare.com/stock.asp?buy=dreamworks-stock
https://www.oneshare.com/stock/dreamworks
^no idea if these are trusted sites, but gives you a general idea of what it could look like. Would be cool to hang an actual stock certificate on the kid's wall.


Other option: Buy whatever stock seems fun and profitable for a child (Disney, Build-A-Bear, CocaCola) and just give them a plush toy with a note about the stock certificate they now own. I'm sure you could print out the details to give to the parents, and the kid can have the toy.

When my now young adult son turned five, I bought him 100 shares of Hasbro. Initially, he deposited the dividend check into his savings account.  As a college guy, it became his pizza money. While it might have been smarter to have reinvested the dividend in Hasbro, I wanted him to see the value of a tangible income stream. 

redfreddie3

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Re: Investment gift for a young child?
« Reply #10 on: November 25, 2014, 10:03:54 AM »
Do the parents have an account set up somewhere?  If so I would say just ask them to add the Christmas cash and stick with the mittens.  When they are that young they already get so much at the holidays a physical gift won't likely be missed, but money later on will be able to do more for them. 

Bob W

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Re: Investment gift for a young child?
« Reply #11 on: November 25, 2014, 10:10:43 AM »
Cash is king.  Give the little kids 10 bucks/quarters and then the parents another 100 bucks and tell them to use it for the little tyke or start an account of their choosing.

rawsted

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Re: Investment gift for a young child?
« Reply #12 on: November 25, 2014, 04:39:45 PM »
The problem with giving a gift of savings bonds now is that both the giver and the recipient (or recipient's parents) need to have a treasury account.  Paper bonds no longer exist.

When my grandnephew was born, I asked his parents if they wanted to go the bond route or would they prefer to open a savings account at the credit union?  They opted for the latter.

Yeah, I am an exciting aunt (not) giving hand knitted mittens and money for the future.
Yeah, after further investigation I began to realize this as well, bummer.

What about buying them shares in a company like Disney... and then getting the stock certificate framed and then wrap it up with a small Mickey Mouse plush? Darn, they just stopped issuing their awesome paper stock certificates... so getting them now might be more difficult (but collectable as well - the certificates could be worth more than the stock itself depending)

http://www.usatoday.com/story/money/business/2013/10/09/disney-stock-certificates-head-to-never-never-land/2956765/
I see some on eBay still. Reckon these would still be redeemable?

So a few other backup ideas:

Dreamworks Animation is still offering a paper stock certificate and that would be cute to give with a Shrek plush
http://www.giveashare.com/stock.asp?buy=dreamworks-stock
https://www.oneshare.com/stock/dreamworks
^no idea if these are trusted sites, but gives you a general idea of what it could look like. Would be cool to hang an actual stock certificate on the kid's wall.


Other option: Buy whatever stock seems fun and profitable for a child (Disney, Build-A-Bear, CocaCola) and just give them a plush toy with a note about the stock certificate they now own. I'm sure you could print out the details to give to the parents, and the kid can have the toy.
Thanks for the backup tips! I will look into them.

Do the parents have an account set up somewhere?  If so I would say just ask them to add the Christmas cash and stick with the mittens.  When they are that young they already get so much at the holidays a physical gift won't likely be missed, but money later on will be able to do more for them.
I'm not sure, but I sort of doubt it at this point. I love them, but they're not very Mustachian. I agree with your point however, which is why I'm looking into these kinds of options to begin with.

Cash is king.  Give the little kids 10 bucks/quarters and then the parents another 100 bucks and tell them to use it for the little tyke or start an account of their choosing.
I always liked cash/coin too, but this guy is still too young to trust with a bunch of quarters heh. Maybe next year.

mozar

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Re: Investment gift for a young child?
« Reply #13 on: November 25, 2014, 06:24:26 PM »
I had dividend income from my Israeli bonds most of my life, about $21 a year. I tried to buy my friend falafel with the proceeds once, turns out he was pro-Palestinian. Also caused some tension with my pro-Palestinian ex. So be careful which bonds you buy.

Joel

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Re: Investment gift for a young child?
« Reply #14 on: November 25, 2014, 06:35:54 PM »
I setup 529 college funds for my nephews and nieces. I make contributions for the various gift giving holidays, and manage the funds. You can print a certificate for them to unwrap.
Thanks for the suggestion, sounds a little too advanced for me at the moment however -- still trying to get my own funds set up and learning how to manage them.

I don't think so. They have funds available that are like Target Retirement funds. You note the kid's age, and let the fund worry about the rebalancing.

ThatGuy

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Re: Investment gift for a young child?
« Reply #15 on: December 11, 2014, 05:14:23 PM »
When my nephew was born I told his parents I wasn't going to buy him things for his birthday or Christmas.  What I did instead was open a mutual fund account in his name with his mom as the guardian and deposited $50 each gift giving time.  I found one that didn't require a big opening deposit and allowed small investments.  He is now 19 and working so we put the money into a Roth IRA and will be investing the money in Berkshire Hathaway class B stock.  I did take him to a local go-cart/mini-golf/batting cage park each spring for several years but I think the money will last longer than the fun did.

TerriM

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Re: Investment gift for a young child?
« Reply #16 on: December 11, 2014, 05:19:21 PM »
Buy them stock that pays dividends.  :)  My grandmother did that for me, and I got to keep the dividends as spending money.  I still have some of the stock she bought 40 years ago. :)
« Last Edit: December 11, 2014, 05:22:21 PM by TerriM »