Stock certificates

Gift Stocks, Not Toys! – A New Holiday Tradition

Give Your Kids or Grandkids Stock in Companies They Can Relate To, and They Will Love You More (Later)

Warning!!! Children of all ages will hate this blog. Yes, this “Santa” is “mean.”

Each Christmas, the tree is full of toys, games, and all the “fun” surprises that parents and especially grandparents love to lavish on the “little ones.” Who doesn’t love watching the kids shriek in delight while tearing away the wrapping paper and discovering the “must have” toy of the year that was on their Christmas list? Plus some that were not on their lists, but still give them moments of genuine joy.

A New Tradition

However, this year, I’m starting a new tradition. I will be giving my grandchildren the “stock of the year” instead. It’s not too early for my granddaughters (ages 10 & 13) to learn how to invest their money. In fact, from this holiday season forward, you too can make a new tradition of giving your loved ones something they may not put on their list, but they will thank you for in the future. Here are some Invest Better Spend Smarter suggestions:

  • You can choose to use a service like, which will sell you only one share of stock and then place it in a nice pretty frame. In addition to the cost of the stock, they will charge you $80 – $700 for the certificate and framing. Easy and convenient, but it’s a bit steep if you ask me…

Do this instead:

  • Open a brokerage account in your child or grandchild’s name (you will need the child’s social security number). Use a discount broker (Fidelity, Schwab, Scottrade, E*TRADE, Sharebuilder, etc.). Then consider buying shares of stocks in the companies who sell the products your children and grandchildren know and like. Look at who makes the movies they watch over and over again, the dolls or action figures or games they play with all the time. Do your due diligence and buy stocks that mean something to the kids, but only if they are good investments!!
    • By using a discount broker, you will save lots of cash you can then use to buy more stocks. Each trade will cost from $4.95 to $8.95 depending on the broker you use.
    • Create your own make-believe stock certificate (just for fun) to give your child. Use your imagination and creativity!
    • You can save on taxes by establishing a Uniform Gift to Minors Act (UGMA) or Roth IRA account for children under age 18. When the child begins to work part-time, encourage him or her to save some income in this account. Incentivize the child with your matching dollars.
    • Give them cash as a part of their birthday and holiday presents, and ask them to put a portion of that money into their account. In fact, let them help you choose where to invest it!
    • Set up the account so that any dividends are re-invested into additional shares (fractional shares are ok). The broker should have easy directions for this option to help avoid trading costs.
    • From time to time give the child a copy of the account statement to show the stock(s) that he or she owns. OR get on the smart phone, pull out the tablet or laptop, and look up the account together.
    • Add to this account periodically, and review the statements together so the children can see the increases in account values as their stocks rise in price.
    • Ask your child or grandchild which companies they would like to own, and work with them to research these companies before buying any new stock(s).
    • Whenever you and your children are shopping (say, at Amazon), having a hot chocolate (at Starbucks maybe), or eating lunch (for example, at Panera), remind them that they own stock in the company. Discuss briefly how the money you are spending will benefit them because they own that stock. Kids really get a kick out of that. They are pretty smart, and sometimes they will even tell you how they will benefit from the company profits.

Note: Contact your potential brokerage choice(s) to see if they have an incentive program that pays a cash reward when you transfer funds from another brokerage or your IRA rollover. These rewards range from $100 to $600 depending on the amount you transfer. Ask the firm to deposit this cash reward into your child’s account. Your child will love seeing that extra money he or she can use to buy more stocks.

Which Stocks to Buy?

There are lots of choices, but stick with a few that your child or grandchild can identify with, for example, Comcast, Disney, Netflix, and so forth. Check out the stocks in our updated Fun Stocks Watchlist™ and IBSS Stock Picks™ for some ideas. For more suggestions, ask your kids what products they like. For example, when my granddaughters asked for iPads, iPods, and iPhones, we bought them Apple stock (AAPL) instead. Now we can pay for their Apple products with the profits we made from owning Apple stock years ago when they were younger. They were too young to understand then, but now they can really relate to this idea.

Alternatives to Stocks

If you don’t want to buy individual stocks, you can buy Exchange-Traded Funds (ETFs) or mutual funds. However, mutual funds usually have initial investment minimums of $1,000 to $2,500. ETFs, on the other hand, do not have these minimums and like a stock, you can purchase just 1 share. The advantage of mutual funds or ETFs is that the child owns a diversified portfolio of many stocks rather than stocks from only a few companies. We suggest you consider PEJ, an ETF that focuses on restaurants, hotels, and entertainment companies (including Chipotle, Starbucks, and Discovery Channel).


OK, now that you know my plans, I confess that my grandkids will get their Christmas toys and gadgets too…not just stocks. We grandparents are just a bunch of “softies,” aren’t we? I mean, can we really disappoint the children if they were hoping for that “special” gift? Maybe the stock thing is the extra love we can give to our kids and grandkids, teaching them about some values and skills that will help them as they get older and wiser. After all, isn’t your role now to share some of your hard-earned wisdom?

Remember“Sharing your wisdom may be your greatest gift of all.”

Happy Holidays,

Jim Tso

Was This Post Helpful:

0 votes, 0 avg. rating



Jim Tso wants to “give back” and share his 35+ years of successful personal money management experience to help others to achieve their financial goals. Jim created this InvestBetterSpendSmarter blog (IBSS) to provide you with free investing, planning, savings, retirement, and inspirational tips derived from his unique, innovative, and proven approaches to money management. He welcomes and appreciates your feedback.

Jim would also appreciate it if you would kindly share our IBSS website and blogs with your family, friends, and business associates. Thank you!


  1. John Schutt November 25, 2013 at 12:25 pm -

    I wish I had grown up with grandparents or parents with Jim’s good ideas. i would have more money for retirement. these ideas are a great resource no matter your age or current financial condition.

Subscribe Now For Free