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#216 Gifts for Kids That Keep on Giving
Episode 21619th December 2023 • Money Boss Parent • Anna Sergunina
00:00:00 00:19:25

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As parents, we're always looking for ways to provide not just for today but to set the stage for our children's tomorrows.

As we are wrapping holiday gifts, I would like to share with you in this episode a few ideas about gifts that will keep on giving for many years to come.

One impactful way to do this is by gifting an investment such as a stock or bond to your child. It's not merely about offering a financial asset; it's about inviting them into the thrilling world of investing.

Anna's Takeaways:

-Gif ideas: of actual stock shares

-Apps to get the whole family involved: Stockpile and Greenlight offer accessibility, even with smaller amounts of money

-Custodial investment accounts for kids UTMA/UGMA

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Money Boss Parents! Welcome to Anna's Money Boss Parent podcast, your go-to resource for mastering money management while raising a family.

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Introduction and Episode Overview

Hey money bosses, welcome back to another insightful episode of the money boss parent podcast. I am your host Anna Sergunina and today we are unwrapping some gifts that go beyond the glittering and shiny paper. Gifts that power you to think about the future and not only that but also teach and open an avenue and platform for you to teach these ideas to your kids.

I know I'm throwing this episode at you kind of late in the game, but I was thinking about it in context that you can introduce this now and it's not a gift that you can just add to the stack that you already have. And second thought was you can always add these gifts to any other holidays, whether it's birthdays, baptisms,

The Concept of Financial Education for Kids

So I want to talk to you about an idea that kind of keeps coming back to mind about how do we purposely start educating our kids about finances, investing, and them becoming really smart with money. So what the gift idea that I have for you today to consider would be in the realm of investing. And I guess it depends on how old your kids are.

Sergunina, and how comfortable you are with technology, Sergunina, it would dictate how you would actually deliver this gift. But I've got some ideas where you can, Sergunina, actually print these out and have them be sent to your house so you can totally rely on technology.

Introducing Investing to Kids

So my idea for you today is to introduce the concept of investing to your kids.

When I think of someone like my son, who's just about to turn five, that is going to be taken really small baby steps right now because these concepts are complex and I can't quite throw at him. What I can talk to you about, right, if you were to come in to see me in the office. But, for example, what I am thinking would be really awesome, and two, like, I've been getting so many requests from grandparents to come up with ideas, you know, what should we give Liam for, for Christmas and, and holidays and so forth.

Investing in Stocks and Bonds for Kids

So I am suggesting to purchase a stock or a bond in a company that your child has interest in. In and one option would be when you are not interested in getting into the technology piece of it, which will I'll share in a minute, but would be to buy the actual certificate. and frame it. Platforms such as give a share actually allow you to do that.

And it's a really, so check out giveashare. com. Sergunina, and you can find any stocks that you actually are interested. I was looking at a Disney stock and funny because I mentioned this. previously on the podcast a couple of years ago when i opened an account for liam at vanguard and it's a custodial account and one of the few stocks that i bought was actually a disney stock but i, i kind of regret of not doing that because i wanted to Sergunina, to to have something fun, right?

Because this is this is that teaching moment that you can have with your child is that not only it looks great because if you buy the actual shares, you can print the certificate and put it in a frame. But it also, you know, starts to introduce those concepts. So I didn't do that. I went straight directly.

I opened a custodial account, UTMA at Vanguard, and I bought some shares of You know, stocks that I really was excited about it was, Sergunina, I have to look, I forget now I have to look back into the account, but I know I bought Disney because that's a classic one to have Coca Cola was another one for sure.

Sergunina, so if you're not ready for that, and we can talk a little bit about how do you set up a custodial account, I think buying a share of any stock that your kid is particularly interested in, or you think is going to be an awesome, awesome. Gift will go a long way Now, how do you? Present this and kind of get the kids involved.

I think again will depend on how old they are, but I I can't Imagine that you can't rub the the actual a frame and put it under the Christmas tree. I think the older kids would be more interested and excited about it, but you can always include a story. That's, I think what will work the best is if you're introduced to story or if there's, if there is something that you can share that you have done in your life, where you've given this, Sergunina, this gift to you, Sergunina, to your child.

So if you want to.

Exploring Investment Platforms for Kids

Take a step back and not the actual, do the actual frame or you're interested in buying more than just one stock you can check out a couple of alternatives. And these are actual applications or programs that you have to, Sergunina, sign up for. And so I, too, that I am kind of interested in exploring, I do not have accounts with these companies, but I like their ideas and I like how they set up.

Their interface and, and their concept. One is called stockpile.com and second one is called greenlight.com. Both of these platforms operate they have the investing section but then I also have other features that you can also start to introduce to your kids in, in a realm of personal finances.

One is that they offer like a debit card that you can control over, and s. Start teaching allowance concepts, budgeting concepts, and then from there kind of, you know, streamline their spending and then help them kind of see that, okay, aside from, from, from spending, you can start to, Sergunina, set aside money.

And then this is where the investing part comes in. So here I'm talking about the actual investing part. Sergunina, so I've, I was thinking about Liam because, Sergunina, I'd like to have, cause he's been lately asking, like when we go to the store, he grabs a credit card out of my wallet and he's seen me a million times.

I was thinking about setting up a card like that for him so that he can, you know, I mean, probably putting some nominal amount on it, but he can start to get the concepts under his belt. And, Sergunina.

Fractional Shares and Gift Cards

As you kind of, you know, grow with what the kids can do and depending on what they're interested in buying fractional shares.

A fractional share means you own a percentage of one share. So let's go back to the example of a Disney stock. A Disney stock right now, Sergunina, is worth about, let me just check one more time before I confirm this for you, but I just saw it this morning. So Disney stock price, I'm doing this live as I'm recording.

Okay. So right now it's worth 90 and 70, 79 cents. And let's say you didn't want to spend that much on one particular stock, or maybe you wanted to buy like five different stocks. This is where. This kind of platform stockpile or green light will allow you to buy a fractional shares. So maybe you wanted to spend a whole like 50 was your limit and you wanted to buy five stocks.

You can actually do that with these platforms. Now, what I also love about this is that if you're Family, just like mine, are asking what to give kids for holidays. Both of these platforms allow you to purchase gift cards. So just like you get a gift card, Sergunina, for 50 at a grocery store or. It's an Amazon gift card for whatever nominal amount.

You can do the same thing here. And then the kids later on can allocate which stocks they want to buy and so forth. So for little kids like my son who are still very in the very early stages of understanding these things, I think you're probably better off with going with the actual Certificate in the frame that he can look at or she can look at and be excited about kids that are a little bit older and started allowance.

Sergunina, could start to explore those those ideas. Now, I also like that because grandparents can put some money on on those gift cards and then give them to kids to try, you know, try again to introduce this concept. So it doesn't have to be Disney stock. It could be all kinds of things. But these platforms are all kind of like So I'm going to in the next year or so, Sergunina, I am going to explore both of them, Sergunina, just to kind of understand because I am interested in, in this, this whole concept, not just investing, but incorporating the technology.

I love technology. So I think it also depends what your personality is and tolerance for, for learning these new things. But, Sergunina, it's a complete different world out there when it comes. to introducing these concepts to kids. Now, something to mention that I know I noticed on both of these websites, the Stockpile and Greenlight, they charge a nominal fee, like I think 5 a month or something.

So, Sergunina, just kind of be aware of that.

Custodial Savings Account for Kids

And then my next kind of thought for you was, all right, maybe you're, you have very little kids. that aren't thinking about these, Sergunina, you know, financial concepts, or you're not quite ready to have a discussion with, with them. And that was me when, you know, like a three, a few years ago when Liam was like two or three, Sergunina, I was, I was ready to start investing because I better, I better practice what I preach.

And so what I did is I opened a custodial savings account. And so it's a formal name. It's called custodial savings account. So it's an account. for your child that when they turn 18 is going to become their own. So once they become legal adults and age of majority, which is 18, then they gave, they are going to be the owners of those, of that account or those accounts.

There are different types. Sergunina, two actually, one is called UTMA. There's four letters. And second one is UGMA. Sergunina, I think, let me just make sure I can tell you what that says. So it's uniform two minors. Act, Uniform Gift Minors Act. It really, the difference between the two, and I don't want you to feel overwhelmed.

If you remember custodial accounts, it's a good start. Most of you probably will just open a UTMA. It really depends what you want to invest. So these accounts allow you to invest in all kinds of securities, stocks, bonds. Real estate, some of them even had crypto precious metals and stuff like that.

So it gets really complicated, but for the most of you listeners out there right now, when we're really talking about investing, let's just kind of get the basics down. Stocks and bonds and maybe a savings account. Those would be like. So you're really looking at a custodial account that is UTMA type and platforms such as Vanguard.

I have Liam's at Vanguard or Schwab can let you set these up. Sergunina, and there it's really treated like a regular investment account that you can. Monitor yourself. You can pick your own stocks. It doesn't have to be stocks. It can be an index fund. It could be S& P 500 index fund and there you get 500 different stocks and you can add more money, trade it.

It's really, it treated just like your own investment account except that The structure of it dictates that when your child turns 18, it becomes their own. So my goal with this when I did it, and why, you know, I frequently still contribute money to that, is that when Liam is a little bit older, and we are starting to actually get hands on experience with it, then I'm going to start to get him involved.

I'll show him what's What's in that account? I'll explain to him why like I'll give the stories. We'll talk about why there's Disney stock Why there's coca cola right because he loves those things right now And then I'll start to give him like practical experience. You pick a stock, right? Obviously, this is 10 years from now but When he's looking at that, it's been there for him.

It doesn't have to be, you don't have to spend a ton of money on this. This could be, with a few hundred dollars, you can set something up like that to begin this whole journey. I feel like it's a journey because it's not something that you just do once and forget. And hopefully, over time, It does well for you, but it gives you this hands on experience.

I've had a podcast episode on this exact topic a little while ago, so if you want to go back and check out episode 117, it specifically talks about custodial accounts and five stocks to begin teaching your kids investing. And if you're on Instagram and I'm

at moneybotsparent, you can DM me. 117. And I'm happy to send you a link, Sergunina, to this podcast episode that I just mentioned.

Conclusion and Final Thoughts

So there you have it, my friends. Not too complicated. It's not going to dilute you from your, your plans you've already made. And this, this would be a really surprising addition to what you had already came up with for, for your kids, Sergunina, for this holiday season and beyond. But I, I am a true believer that this piece where we start talking about money and we start talking about how the money, how to grow the money is going to go a long way.

I hope you're having a great holiday season. Let me know if you have any questions and until next time, remember you are the bosses of your own money.

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