One share of stock ideas!

[tutusue]

I've decided to give my grandsons, for birthdays and Christmas, a share of stock in a company that represents their interests. They just don't need any more "stuff"! I want them to have input based on their interests and to be able to track that stock but I'm not quite sure how best to go about buying one share at a time!

I'm aware of oneshare.com but I don't want the overly inflated frame, mat, engraving and transfer fee. One share of Nike at $63. becomes a $151. purchase. At that price I'd rather buy 2 shares of stock! Any suggestions on where I can purchase just...one...share...at a somewhat reasonable price?!

The 11 year old is into Baseball. He's also into skate boarding while playing baseball! YIKES!!! The almost 9 year old and 4 1/2 year old are into construction. Now seems like a good time to buy!

TIA...

[Adri]

Re: One share of stock ideas!

Heh. If you were going to buy just one share, I'm sure they'd appreciate a share of Berkshire Hathaway and if they wouldn't, I would

I don't know where you could buy just one share without an inflated price specifically although there are discount brokerages. Do you need them to have an actual stock certificate (as opposed having the stock in a brokerage account).

[tutusue]

Re: One share of stock ideas!

Heh. If you were going to buy just one share, I'm sure they'd appreciate a share of Berkshire Hathaway and if they wouldn't, I would

I don't know where you could buy just one share without an inflated price specifically although there are discount brokerages. Do you need them to have an actual stock certificate (as opposed having the stock in a brokerage account).

Hmmm...you've given me an idea, Adri. Maybe I'll give them a stock of their choice for their birthdays and one of my choice for Christmas!

I expect to pay an inflated price but I don't want to be forced into buying the extraneous stuff at oneshare.com.

I'd like the certificate as a tangible piece of ownership that they can hang on to. I'd probably give them a photocopy and keep the originals in a safe deposit box. That said, I'm open to ideas from others.

I'm terribly naive when it comes to stocks. I'm a mutual fund kinda gal! I initially wanted to open a custodial account for each boy and add to it for each gift giving occasion but the minimum initial investment is not what I had in mind!

ETA: I just found out why oneshare.com doesn't offer Berkshire Hathaway! I'll take one share, too...as soon as I find a sugar daddy!

[cyleet99]

Re: One share of stock ideas!

My brother used to do this routinely for his kids; he told me he would call the corporate office of the specific company and they would forward him to the investors office that would sell him one share and provide the certificate.

That would be fun to find the companies individually--good idea for the DS and upcoming birthday!

[Creative-1]

Re: One share of stock ideas!

Hi Sue,

A couple of companies are made for this:

http://www.oneshare.com/

About.com talks about how to do this:

http://beginnersinvest.about.com/c/h...0994115582.htm

I like your idea because it could teach them about investing. Compound interest is a concept all young people should know about.

For instance, at the average rate of return for US stocks (of 10%), $1.00 invested over 60 years becomes $400.

If they could each save and invest $5 a month, for a year, that $60 would become over $20,000 when they retired.

Almost every kid could save $5 a month. Saving should become part of every child's lifestyle. Aunts and uncles could probably "match" savings, if asked.

Use examples from your own life to teach them about being successful at money. In my case, $11,000 we saved and didn't need right away turned into $45,000 in 3 years (in a semiconductor mutual fund).

That was the down payment for our home and we now have $400,000 in equity. But if we hadn't saved it in the first place, we'd still be poor and renting.

God bless the child that's got his own...

[tutusue]

Re: One share of stock ideas!

[...]A couple of companies are made for this:

http://www.oneshare.com/

Yep...per my initial post this company doesn't work for what I'm trying to accomplish.

About.com talks about how to do this:

http://beginnersinvest.about.com/c/h...0994115582.htm

I like your idea because it could teach them about investing. Compound interest is a concept all young people should know about.

This is exactly what I'm trying to do...plus make saving/investing fun for them. I'll check that link. Thanks.

[...]Almost every kid could save $5 a month. Saving should become part of every child's lifestyle. Aunts and uncles could probably "match" savings, if asked.[...]

Ooooh...I like this matching idea. I'm gonna offer that to the boys!

Thanks, Bob. And thanks, Cyleet, for your suggestion. I'll look into it!

[Adri]

Re: One share of stock ideas!

Tutusue: I sorry, I totally blew past your mention that your grandkids are 11 and 9. Even if it's one share of stock each, please consider giving it to them pursuant to a custodianship or the Uniform Transfers to Minors Act. If they are underage, they can receive gifts but cannot enter into contracts or agreements so if something happens and they want to sell the stock before they're 18 (like, if the company starts to fail or the value of the stock starts to dive. Which, sadly, is not unimaginable in this market), they would have to go through a lot of humbug (which would probably make it not worth it to sell the one share) if you give it to them outright before they're 18. Otherwise, they'd probably just have to hold the share(s) until they hit 18.

http://www.capitol.hawaii.gov/hrscur...0553A-0009.HTM

[tutusue]

Re: One share of stock ideas!

Thanks, Adri. What little research I've done so far has turned up a large (for me) minimum investment ($2000 to $3000 each) to open 3 custodial accounts, one for each boy. At that time I was looking into opening a mutual or index fund account for each of them. Thanks for the link. Once I blow thru my current project I'll need to do more research. I initially checked Vanguard and AIM. Maybe I can accomplish my goal thru Charles Schwab or another discount brokerage.

What I initially thought would be an easy, fun and educational gift has turned into a major learning experience for me!

[Nords]

Re: One share of stock ideas!

I've decided to give my grandsons, for birthdays and Christmas, a share of stock in a company that represents their interests. They just don't need any more "stuff"! I want them to have input based on their interests and to be able to track that stock but I'm not quite sure how best to go about buying one share at a time!

The issue is that paper stock certificates have become so second millenium. Even savings bonds are going electronic and discouraging paper... not necessarily a bad thing for expense ratios. It's a great way to give all three grandkids a gift that they'll share & appreciate at all ages, but it's killing off the whole concept of certificates.

There are a few less-expensive sites (http://www.frameastock.com/shares/31/ , http://www.shareinaframe.com/view.asp?view=DIS) but you're getting killed on the fees to register & mail out one share. Ford and Washington Mutual are certainly "bargain priced" (for good reasons, too). Although I notice Playboy is pretty cheap at $5/share "plus transfer fees", the parents might not appreciate your sentiments...

Another option might be to contact the company directly-- Disney has one of the better reputations. But again they will soak you on the transfer fees.

Kid finances are a big personal interest, so here's some other ideas. David Owen's "First National Bank of Dad" (at the library) says that kids know parents are psychotic-- they "give" their kids a savings account but then take it away from them and tell them that they can't really use it until college. Kids quickly learn to spend whatever money they get their hands on before their parents make them "save" it and they never see it again.

While that book might be a great present for parents, Owen lured his kids into saving & investing with "Bank of Dad CDs" and "Dad's Brokerage". Dad's CDs paid one penny per dollar per month, which is about what a five-year-old can handle. That made the compounding math pretty compelling and it has the additional advantage of being easy to figure out what happens if you leave it alone for a few more months. (The older two may be fine with "percentages" instead of "pennies per dollar".) The kids could withdraw the money at any time, and for the first few months that's exactly what they did. After a few months, once they trusted their parents' fiduciary liquidity, they also realized the value of saving for an even bigger purchase.

When they were older, IIRC ages 10 or 11, "Dad's Brokerage" consisted of a Quicken account worth "$25,000". His kids could buy stocks and track their performance. The way he made this affordable was to tell them up front that the actual cash amount was $250, so the cash value of a share in his brokerage was priced in pennies, not dollars-- the quoted price divided by 100. (I don't think they paid trading commissions or taxes.) From talking with his kids and running this for a while, he learned that his son was a testosterone-poisoned day-trader who chased hot stock tips while his daughter preferred low-cost index funds. You could use Quicken or an online portfolio-tracking system like Yahoo! Finance. But running that for your grandkids would require monthly discussions, perhaps an occasional printout, and other research that they may lose interest in. Pretty tough unless you have a grandkid hardwired like Warren Buffett, who started selling Cokes at age five.

Here's another idea-- your local credit union (and there's a lot of them) may offer checking accounts for minors. Navy Federal Credit Union agreed to open one for our kid at the age of nine. No fees or charges. It was a real-world reason to write neatly, to do math correctly, and to be responsible for your ATM card. (She lost it once. Just once.) She brought a grandparent $25 birthday check down to the CU, opened the account, and even got to pick her check design. She eventually realized it was a really big deal when she went to a school book fair and whipped out her checkbook to pay for her purchases-- the teachers freaked out even more than her classmates. At that point she became highly motivated to keep up with it because of the peer envy and because it made her feel grown-up. One of the few times that peer pressure worked for us.

The nice thing is that it's electronically linked to my account so I can transfer money to her for school lunches, bus passes, annual fees, taekwondo tuition, whatever. I haven't written a check for her activities in over six years. She's learned to check her balance before she writes a check.

Of course other life lessons came later-- she bounced a check just once. And she learned a lot about interest rates and minimum fees. She started really paying attention to TV "special offers" and to credit-card ads. Your grandkid's parents may not appreciate the questions & discussions you'll subject them to.

We had some tears the first few months of reconciling & balancing, but that motivated her to start using Quicken and today (age 15) she's totally online with a credit card and a Roth IRA. She saves compulsively and bargain-shops hard. She appreciates how many hours of her life she'll have to work for her desired possessions. A couple months ago she decided that she was ready for a cell phone, so she went out and bought one and then brought it home to educate us. (She's absolutely right, too, and she got a bargain.) She played around with Dad's Brokerage for a year (did better than me) but decided that she also prefers low-cost stock index funds. Just like Peter Lynch's daughters, though, she'll occasionally wonder out loud if a certain product or service comes from a publicly-traded company. A few years back that question at the release of the first Pokémon movie paid for a nice family vacation.

Maybe a book would work better. Your 11-year-old is almost ready for Marshall Brain's "A Teenager's Guide to the Real World" and "The Motley Fool Investment Guide for Teens". They're written in an irreverent style for young rebels but they get the message across. (MF has a ton of their own problems but the book is well worth the price.) For the youngest I'd recommend "If You Made A Million".