’Tis the season when children lose their minds and actually visualize their parents as walking, talking ATMs with direct ties to Santa Claus. Visions of sugar plums and visions of them playing their favorite new video game or running through the neighborhood in their new KD’s not only dance through their heads, but they seem unable to utter a single sentence without somehow getting in ‘an ask.’
In addition to the stock, which comes with a beautiful certificate that you order framed (or frame yourself to save a few dollars), it’s gotten him into the habit of wanting to be an investor and a consumer.
I remember one year, after giving him a share of Nike stock and explaining that he is now a partial owner of the company and shares in the company’s profits, he encouraged several of his friends to buy Nike sneakers… in addition to making a case to me that I should buy even more of the shoes for him to make him ‘financially sound in the future.’
Be sure to do a Google search to find the latest information on the company from reputable financial websites like Morningstar or Marketwatch. TD Ameritrade’s site also provides market research and information on its site.
When you go to TD Ameritrade, you’ll need to select the option allowing you to be the account custodian for a minor. They are called UTMAs (Uniform Transfer to Act) or UGMAs (Uniform Gift to Minor’s Account).
You’ll also need the minor’s Social Security number. Honestly, this process took a matter of minutes.
Again, invest in something your child can relate to and encourage them to add allowances and financial presents to this account. Exchange-traded funds (ETFs) in their area of interest and mutual funds are always a good bet, as they come with professional management. Be sure to check out the fees. The company’s online chat and easily accessed customer service make the process easy.
3. Savings Bonds: While they don’t have the same potential for investment growth, a tried and true financial gift worth more than cash is the savings bond. Click here to go to the U.S. Treasury’s website, Treasury Direct. As the site states, when you buy savings bonds as gifts, you must hold them in your TreasuryDirect account for at least five business days before delivering them to the recipient. You must be 18 or older to create a TreasuryDirect account and to buy gift bonds. A child under 18 can get gift deliveries in a Minor linked account, which is established within the TreasuryDirect account of the parent or guardian.
While there is nothing wrong with giving cold, hard cash, a few minutes of your time can create an investment and experience for the children you love that will literally help them live richer lives.
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Source: Black Enterprise
