Last week on the blog we shared some fantastic, financially-related Christmas gift ideas for children. One of the ideas was to open a Roth IRA for your child. Good idea for an older child with a bit of income coming in. But not so good for younger kids, or kids without income.
Capital One 360, who owns the online stock broker ShareBuilder has put together a neat little package that might be a better solution to teach your younger AND older children about investing in stocks. It’s called Give the Gift of Stock, and it includes: a $50 ShareBuilder gift card, 5 automatic investment plan credits, and a 5 part video series on how to buy the right stocks for your portfolio from the guys at The Motley Fool.
ShareBuilder has suggested letting your child help you pick stocks based on the instructional video, and based on the companies who own the toys that they want for Christmas (e.g. Mattel, etc.). As you know I’m a fan and occasional user of ShareBuilder. They are my online stock broker of choice when it comes to taxable investing (i.e. outside of the 401(k), Roth IRA, etc.). I don’t do much taxable investing though. But, they sent over a The Gift of Stock kit for me, so I thought I would put it to use. I’ll use the kit to open up a little custodial brokerage account for my daughter. In it, I’m going to invest in:
- LeapFrog Enterprises Inc (LF) – My daughter loves The Letter Factory.
- The Walt Disney Co (DIS) – Disney owns the Little Einstein Company, another video favorite.
- Mattel Inc (MAT) – My daughter is rarely seen without a Little People figurine in her hands. They are made by Fisher-Price, who is owned by Mattel.
This little exercise will be just for fun and future education. One day I’ll show her the account and tell her about the companies that make the toys she loved. I don’t suggest you invest a bunch of money and pick stocks based on the toys your kids play with. Most people should just stick to boring old index funds and mutual funds within tax-advantaged retirement accounts. I do. But if you have extra funds lying around and want to teach your kids a lesson about investing. Nothing would do it quite like showing them how to buy stocks in the companies that make toys they love.
The Give the Gift of Stock Kit is available for purchase at Sharebuilder.com. Orders placed online by December 12, 2010 will arrive before December 25. All online orders using ground shipping will be sent for free. The Gift of Stock, valued at $125, is selling for $45.
Don’t need to give a gift? If you simply want to open a brokerage account with ShareBuilder, they will give you a $50 bonus to get started. Open a ShareBuilder account today and have a no-fee, no-minimum, trusted place to invest your money.