The most important gift you can give a child is always the gift that supports his growth and security as an individual. Buying stocks as gifts for children is not about taking out the fun of buying the gifts that he likes but buying something that will benefit him in the long run. If you find yourself in a position to give more, then the next wise move is to create a foundation that would set in place a world in which financial stability and discipline can grow alongside the child as he matures.
- Contact your broker. This officially means that you are authorizing the transfer of stocks from your name to the child's name. Therefore knowing how this move significantly seals the first real adult responsibility that the child can ever experience. Transferring stocks is like transferring cash, so better to make sure that this is clearly communicated at the onset.
- Invest on what you know. This means that the parent or the provider for the child should check out the list of companies that are relevant and may create importance in such a way that it impacts the child in the long run. In a way, it has to be a company whose services are something that you believe in. Because the time it takes to let this investment grow will also leave its impression on the child as well.
- Explore your options together. It does not have to be that the interest to buy shares is from your end only. Sometimes, going on a leisurely trip down to your favorite toy store or even a trip to the supermarket and discussing about the things that the child is interested in may give you an idea about the possibility of investing capital for the things that a child potentially sees as a good opportunity for investment. List these companies down and check out the viability.
- Make it official.In order that the child can truly understand the value of the gift presented, you can order an official certificate for it. You can check out Oneshare.com, which helps you to easily buy one stock at a time, request for the certificate to be framed and even put a good will note if you wish. The service cost for this might turn out to be much pricey than the actual stock purchase, so in which case, you must decide if you need to do this eventually.
- Open an account. You can set up an account with a brokerage that has low balance requirements and much lower commissions. You can also enjoy teaching the child how to use this account, giving him advice & tips on how to manage investments, and the value of investing in this early. The broker is in charge of making sure that the share certificates are secured. The child will most likely look forward to being treated as an adult and will appreciate the responsibility that this move entails, making him either look forward to the world of investing, or just the opposite. The important thing is that you offered to provide him that opportunity.
Each child is very unique in the way they respond to the different challenges of the future. One way to provide anchorage to the uncertainties of the future is to secure them with a reliably good investment that challenges their young minds to get started.