Why not give shares for Christmas or birthday presents?
They don’t clutter or take up space, and it’s the type of gift that keeps on giving.
If you select shares in some good companies, they’ll hopefully increase in value over time.
But more importantly than that, you are gifting interest, knowledge, and experience with the stock market.
Hooked? So how do you actually give shares to someone?
Here are some ways you can do it.
1. Create the Trading Account and Buy the Stocks for the Person
If it’s your own child or grandchild under 18, it should be pretty easy to set up the trading account and just buy the shares for them.
Grandparents might need a photocopy of the children’s ID from the parents, but once they have that, they can open a savings and investment account in their own bank and buy shares for the children.
This is the easiest way to gift shares.
2. Buy the Shares and Transfer Them Electronically
This method is a little more complicated.
You’ll encounter a bit of bureaucracy at the banking level and some high fees, but it’s doable.
There are options other than old-school transfer today though. There are some apps that make it easier to buy shares as a gift.
You can look up SparkGift, Stockpile, and Public. They even make it possible to buy fractional shares and give them through the apps.
3. Open an Account and Buy the Stock Together
An alternative is doing it together. You can coach the person through the process of opening a trading account and buying a share.
If the person is a newbie on the stock market, this is like a double gift: You offer the stock and some basic knowledge about how the stock market works.
Many newbies freeze when they see an online platform because they don’t understand the language. What’s limit? What’s market? They become afraid of doing something wrong, and some people never get past that level.
You can get them over that hurdle by investing an hour of your time.
4. Give an Investing Course Instead
What about gifting some investing knowledge either along with the stock or instead of giving shares?
The best investment you can make is investing in your knowledge. The master investor Warren Buffett said something to that effect (the exact quote: “Ultimately, the best investment you can make is in yourself.”).
A stock can fall in price, but knowledge never depreciates in value. After all, it’s knowledge of the stock market that makes you able to make good investment decisions.
Have you considered giving an investing course as a present?
I’m hosting a webinar about stock market investing between Christmas and New Year’s.
What about inviting your loved ones to that? It’s free and you can sign them up right here.
5. Gift the Stock Together with the Physical Product
It might be a little boring to receive an envelope with information about a stock – especially for children.
In that case, what about giving the stock in combination with the product?
Gift Nike shares with a pair of Nike shoes, Apple shares with the new iPad, or Disney shares with an Elsa (Frozen) outfit?
Tell the child, “You own the McGuffin/the gadget/the iPad/the game station, but even better than that, you now own the company that makes it.”
That’ll wake them up. Believe me. I’ve tried it.
They’ll go, “What?”
Then you can say. “Well. Part of it.”
You’ve got their attention now. Then you give them the envelope.
If I had bought a share or two for myself and my nieces and nephews for every item they put on their wish list, we would all be very rich by now.
Looking back, I can see now that my teenage nieces and nephew had very good antennas for wonderful investments.
If I had invested in Apple when my nephew was aching to get the first iPod on the market, I would have had a wonderful return (Apple was trading at less than 40 cents a share in 2001). Or if I had invested in Nike when the sneakers were on my niece’s wish list (around 5 USD per share then). Or if I had invested in Amazon when I gave my first Amazon gift card at Christmas in 2001 (around 10 USD per share).
No use crying over spilt milk, but we can do it differently going forward.
Look at the items on the wish list. Do you spot any companies that are public? Could they be good investments?
How Much Can You Give?
We usually don’t give taxes much thought when we’re wrapping Christmas and birthday presents, but when you give stocks, you have to be mindful of the tax laws in your local country.
Gifting stocks is like giving money, and the rules are different from country to country. You might incur some taxes, so look up the tax regulations.
In the US, you can give 15,000 USD without triggering the gift tax (2021).
In the UK, everyone can get a cash or stock gift of 3,000 pounds without triggering taxes (2021).
Before you get a headache about taxes, just remember, the stock is just part of the gift.
You’re also giving interest and experience in the stock market.
Don’t forget to sign up for the free, life Webinar that I host on December 27 and 28th. You can sign up right here.