Buying Stocks For Kids: Surprising Gift For Your Child’s Future

Posted by Fab Style on Apr 2, 2012 in Everything Kids

Buying Stocks For Kids: Secure Their Future

 

 

Stocks And Investing For Kids

We buy all types of things for our children: toys, clothes, shoes, but have you ever thought of buying stocks for your child, nephew, or niece.  Well this could be a gift that could last a lifetime.  In this time of uncertainty and recession, it is important to think about the financial future of children.  This can help lay the foundation for a good financial future for a child.  It has been said that it is best to start as early as you can and the best remedy for making money is time;  the best friend of money is "compounding".

 

If you purchase a stock when a child is younger, by the time the child reaches adulthood, you can have built a nice nest egg for the child to start out with.  If you have never looked into stock for your child, a way to get started is by learning all you can about stock. Find books and video recordings that will teach you and your child about investing and learn together.  Repetition is key to teaching a child about stocks.  Here are a few tips to help you choose companies that offer stock to start your child's pathway to their financial future.  Purchasing a stock can teach a child how to build capital as well.

 

1. A good place to start is to choose companies that are well-known and have staying power.  Think of brands that you use everyday, such as Disney, Coco-Cola, Pepsi, Golden-Flakes and many others.  You want a company that pays a good dividend.  A dividend is a payment paid by a company, which is usually paid regulary each quater, to its  shareholders, who purchased stock in the company.

2.   Purchase as soon as you can.  The best friend of an investment is time.  The sooner you purchase a stock for your child, the more time it has to mature and make interest from its initial investment. It's best to reinvest the money over and over again and not to touch it.

3.  Make investing fun and get the child involved. Find literature that will help them understand but doesn't oversimply stock for the child.  As always, stocks come with risk, but there are ways to introduce the child to stocks in a way they can understand the good and the bad.

One way to get started is by checking out OneShare. You can buy one share of a stock and have it framed.  (There are downsides to this.  It can get more expensive than the purchase of the stock  once you add the price of framing and you may have to pay a high transfer fee.)

You can start a brokerage account in the child's name.  You can pay low commissions and low have no minimum balance.  Your child can add money to the account as well and you could teach the child how to access the account.  

 

These are just a few tips and ways to get you thinking about the value of stocks as long-term gift ideas and creating a finacial future that could have a positive affect on your child's life.  Buying stocks for your kids is not something that you have to do, but it is something to think about doing!

 

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Should You Invest In Stocks Directly?

Posted by Chloe Elizabethlee on Mar 18, 2012 in Uncategorized

Should You Invest In Stocks Directly?

 

 

Investing in stock is not just for the elite, you too can.  You can invest as little as a small amount of money a month in companies like Coco-Cola, Sears Roebuck, or even McDonald's.  It will take time and patience and you will not get rich overnight, so if you are wanting the get rich quickly, this is not for you!  This doesn't involve having a stock broker who you have to pay a commission to, but as the person buying into the stocks, you will be responsible for fees.  

 

Investing in stocks directly is something that many people consider.  Some people stay away from this because they don't understand what to do, but it is not as hard as you may think.  There are two types of direct stock investing: DRIPs and DSPs.  

 

DRIP's , dividend reinvestment plan, gives you the option of reinventing any dividends you earn from a company into buying more shares of that company, eliminating the cost of fees for buying the new shares, however, some companies are charging for reinvestment fees.

 

If you buy shares of a company, they may run a DRIP Program for shareholders and if you get into their DRIP Program any dividends that you earned would be used to purchase additional or fractional shares of the company in the shareholders name.  There are some requirements of the company's as to how many shares of the company you must purchase before participating in their DRIP Program.  Once you meet that minimum then the company will reinvest your dividends and you won't have to pay fees.

 

Many companies offer DRIP Programs and many of them are probably companies you purchase from everyday.

 

There are many great reasons to have DRIP Programs, because these people look for long term investing and use what is called dollar-cost investing.  They generally will stay with the company for the long haul, even if the stock may dip for at times. Dollar cost investors invest equal dollar amounts over time.  For example, a person may choose to invest $50 dollars a month and have it debited from their checking account.

 

DRIP's helps a company to keep capital in the company and helps a company maintain their cash flow.  The best part for you is that you normally don't have to pay a commission.  DSP's allow you to buy stock straight from the company.  This is normally referred to as Direct Stock Purchase.  You can start buying directly from the company and not have to go though a thrid party.  If you want to further explore your options of buying directly into stock, you can go to the companies website and see if they offer a DRIP program and it should give you the details on how to begin your investing journey!  

 

 

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