Most kids would rather open a present to find a new iPad than a share of Apple stock. Likewise, receiving shares of Amazon, Microsoft, or Procter & Gamble is hardly the stuff of childhood holiday dreams.
Yet, as dull as such a gift may sound, its impact can last a lot longer than any electronic device, and long after a child has tossed aside that Teddy Ruxpin or forgotten about receiving yet another 3-in-1 Lego set.
Kyle Paterson, a 34-year-old business development director, has vivid memories of his grandfather presenting him with shares of Intel (INTC) two decades ago.
The gift kicked off a tradition for Paterson and his grandfather that involved the two of them sitting together over lunch each day, reading the financial pages of the newspaper to stay abreast of how Intel’s stock was faring.
Not only did the conversations provide prized bonding time, receiving Intel shares also taught Paterson, who was 12 at the time, important lessons about money.
“It taught me you can use money to grow money and it taught me about being responsible and not impulsive,” recalls Paterson. “If I wanted to buy something new – and this is still how my brain works today – I really compare it to what could I earn with that money instead, and I ask myself, ‘Do I really want that new thing more than the money I could earn with this money?’”
Still, presenting such a gift to a child, particularly during the holidays, can be tricky. We all want our gifts to elicit a grin, not a groan. The key is to make it engaging — both when presents are being unwrapped, and throughout the months and years afterwards.
Creative Ways to Give Money Gifts
In Paterson’s case, his grandfather had printed out the Intel stock certificates, and one of them was framed and hung on Paterson’s bedroom wall.
“When he gave them to me, he presented it as if it was a very big deal and these were really important,” said Paterson. “And I became extremely interested in knowing what it was that I had.”
Paterson’s story is not unique. Michael Dinich, a financial advisor and creator of the site Your Money Geek, has given his two young children (now 9 and 11) numerous stocks as gifts over the years.
That effort includes framing and wrapping the stock certificates, which Dinich gives his children as Christmas gifts. But equally important, Dinich doesn’t buy just any stocks. He purchases shares from companies whose certificates are visually appealing or from companies his children are inclined to have an interest in learning about.
“Disney’s stock is a really pretty stock. It has like Snow White and other Disney characters on it. It’s really artistic. The stock itself was so beautiful,” explained Dinich, who also used to purchase Marvel Comics stocks for his children before the company was acquired by Disney (DIS).
More recently, he purchased shares of Caterpillar (CAT) for his son. “My son loves construction equipment. He came out of the womb loving excavators. Every time we drive on the road, he’s like, ‘Daddy, look at that excavator! Look at that dump truck!’” said Dinich. “So, I gave him their stock. He likes knowing he owns a little bit of Caterpillar.”
That real-world familiarity with a company’s business or products can helps bring to life an often intangible concept. “Stock ownership and owning the company is so abstract, so it does help to have the physical certificate because then it’s something in their hand,” he added.
Another way to help connect the abstract value of a financial gift to your child’s everyday life is through a dream board, says retirement advisor Chris Carosa, author of “From Cradle to Retirement: The Child IRA.”
“Gifting a retirement plan to your child is the best gift you could ever give them — however, it’s not the most exciting thing to put under the tree,” Carosa says. “A great way to get your child to make the connection between an intangible retirement account and the tangible value of saving money is to pair the account with a dream board – and explain that if they save money into the fund they will one day be able to afford to buy anything they put on their dream board. The sky is the limit.”
You can also pair a financial gift with an inexpensive but symbolically meaningful toy — for example, wrap that Disney share with a DVD of their favorite Disney movie.
Hannah Shaffer, co-founder of TreatFinancial.com, suggests illustrating a money gift — whether it’s a gift of stock or a high-interest savings account — by giving it in conjunction with a growing creature toy, which are available in various animal forms and expand when placed in water.
“Growing five to 10 times their original size, growing creatures are one of the best toys to pair with a financial gift,” said Shaffer. “Helping your little ones put water and the creature into a container and watching it grow on your kitchen counter gives you a prime opportunity to share how money grows just the same.”
Engaging Ways to Continue the Education
Framing a stock and putting it under a Christmas tree is just one small part of the gift process in the Dinich household.
To make the entire experience more engaging for his two kids, Dinich has the stock dividend checks sent in the mail to each child. (Because what kid doesn’t go bonkers over receiving actual mail?)
“They get the dividend checks in the mail and it makes this abstract thing even more tangible,” continued Dinich. “It’s usually a couple dollars and we will go to the bank and make a big production of depositing it.”
That’s just the beginning of all kinds of money conversations. “When my son got his first Ford dividend check, it was like 30 cents and he said, ‘I’m rich, I’m going to buy you a new truck.’ And we sat down and talked about the value of money and that you can’t buy a truck for 30 cents.”
What’s more, in the case of Caterpillar, stock ownership means his son receives a magazine in the mail from the company periodically that includes pictures of its equipment – another perk for a little boy who loves looking at and learning about construction equipment.
When his kids get just a bit older, Dinich intends to buy them stocks of Procter & Gamble (PG), so he can take the learning up another notch, bringing them to shareholder’s meetings.
“You can go get all kinds of cool swag and check out their factories and more,” he explained.
The Best Stocks for Kids’ Gifts, and Where to Buy Them
The sky is really the limit when it comes to selecting stocks for kids. One of the best approaches is to select a company based on what a child’s interested in or familiar with, from toy and video-game makers to breakfast table staples — companies like Hasbro (HAS), Sony (SNE), Electronic Arts (EA), Apple (AAPL), Kellogg (K), or even Harley Davidson (HOG).
Mike Kawula, creator of the site Dinner Table MBA, purchased his daughter shares in her favorite clothing companies.
“She liked Abercrombie & Fitch (ANF), so we made it a learning experience. I said, ‘Well, let’s look at a group of these stores you like in the mall,’” he explained. “Let’s see who owns them and what’s going on with them. It can be fun for kids when you involve them in it and make it exciting — when they are not talked at, but when they are talked with.”
Kawula recommends using a Robinhood account as a good first step. At 11 years old, his daughter was actively buying and selling via Robinhood, which allows you to make trades for free either online or by smartphone.
“It’s just phenomenal for a kid, I don’t believe there is even a minimum, you can start one with $100 a kid might get. It’s a great account to open up,” said Kawula.
Places to purchase stock certificates that can be wrapped as a gift include GiveaShare.com, which specializes in providing framed shares of Disney and other kid-friendly stocks. UniqueStockGift.com is another option, selling decorative single shares of stocks that come in a frame with a personalized plaque.
One more option, Stockpile, offers the budget-friendly ability to buy fractional shares of stocks, rather than the entire stock — which is pretty helpful when shares of Amazon (AMZN) and Google parent Alphabet (GOOGL) trade for more than $1,000 apiece.
Stockpile places the shares in custodial accounts for kids, and also issues gift cards (similar to a store gift card) that can be redeemed to purchase stocks — so that a child has something physical they can see as a gift. Yet another bonus, the site also allows kids and teens to track their stocks and place trades with a parent’s approval and create a wish list of favorite stocks that can be shared with family and friends.