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How to Give Kids the Gift of Stock - YouTube
Channel: The College Investor
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as a millennial first-time mom to be
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i really just cringe at the idea of
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getting
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a whole bunch of toys for my kid as
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gifts
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and just letting it just overflow my
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house it just makes my minimalistic
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brain
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insane so what's a better idea
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than giving a child plastic toys and
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junk they're just going to forget
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stocks in this video i'm going to share
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four ideas
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on how you can give the gift of stocks
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to kids
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hey guys justine with the college
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investor here investing
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and personal finance for millennials so
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if you're interested
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in giving stocks as a gift for a
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child then you've got to start with a
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529 plan
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so 529 plan is a type of investing
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account
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where you can use the money for
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qualified
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educational expenses this is a great way
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to build
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up a child's college savings fund by
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going online and contributing to a 529
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plan
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or opening up a 529 plan for that
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specific child and naming them as the
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beneficiary
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i've done this for my own future child
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and i've opened one for my niece
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and nephew named them beneficiaries and
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then
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once they're ready to use those funds
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you can withdraw the money
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tax-free and use it for qualified
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education expenses
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if you want to know more details we have
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all the details
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in our complete 529 plan guide
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on our blog it has every single state
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specific details you would want to know
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about opening up a 529 plan
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and the different variables that go
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within those plans
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the second idea i have for you is to buy
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a fractional stock so instead of buying
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a whole stock which can get really
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pricey
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if you want to buy stock in amazon
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facebook or microsoft
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you can actually buy just a fraction of
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an amazon stock
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using a great app called stockpile
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now when i went onto stockpiles website
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what's really cool about their platform
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is that it only cost 99 cents to
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buy a fractional stock and you can set
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up
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a custodial account for a kid
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so on their homepage it says you can
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open up a custodial account
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for kids so that kid or that minor is
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going to own the stock
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while the custodian has legal
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responsibility over the account
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now once that kid becomes of legal age
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then the stockpile will go through the
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motions of
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transferring that custodial account into
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their own personal account
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and continue the investing process i
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thought it was a really great way
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of blending digital custodial accounts
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and then doing it on the cheap all in
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one platform
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the third idea that i have for you is to
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open up a drip plan
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for a kid so a drip plan is a dividend
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reinvestment plan in which you're going
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to buy stock directly from
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a company instead of going through a
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broker
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so that means in most cases you're going
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to
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avoid brokerage fees broker fees
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so that you're getting this at more of a
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discount if you want to call it that and
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they make it really easy
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for you to track no fee
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stocks for kids from companies like
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hasbro or hershey's and you're going to
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be able to do that
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through a platform called firstshare.com
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so if you want to check out drip plans
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head over to firstyear.com
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they're going to walk you through that
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process
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now stocks are a great gift to give a
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kid
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but if they don't know how stocks or
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investing really works
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then your gift really isn't realizing
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its full potential
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and so that's why your fourth idea is to
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give a financial book
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to encourage financial literacy
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throughout that child's life
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we have a complete list of finance books
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that we really love
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including money a to z which is great
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for
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kids when they're toddlers when they're
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young
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the second one is a chair for my mother
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for ages five through eight then ages
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nine through eleven
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the secret millionaires club ages 12-14
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look for the young entrepreneur's guide
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to starting and running a business
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and then ages 15 through 17 look for
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the money savvy student and then when
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that kid
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is a senior getting ready to graduate
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stick this in their graduation gift
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i will teach you to be rich by ramit
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sethi i personally have this book
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love the book super easy to read
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and take bits and pieces from and apply
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it to your personal finance
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life so those are some books to get you
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going and that's something that you can
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include
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each year for that kid's birthday or a
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christmas gift or
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with a stock it all comes together
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so if you're tired of getting the latest
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toy that's just gonna be
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broken lost or forgotten i highly
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recommend
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looking into giving the gift of stocks
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for your kid or for a special kid in
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your life
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and it's a really great way to just
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encourage financial literacy
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to help them get the best financial
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future
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if you want more resources on setting up
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kids
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for better finances and better financial
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health
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be sure to check out all of our
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resources at thecollegeinvestor.com
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