The Gift That Doesn’t Need Batteries, Never Breaks and Can Change a Kid’s Life

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You can give toys they’ll play with and then forget. Or you can give stocks, a college fund or some other present that has lifelong impact.

Some years back, a woman I know worked on the fringes of the film industry. She was invited to a bar mitzvah, one she knew would be packed with wealthy people. Because her budget wouldn’t allow for a super-expensive gift, she got creative.

Knowing the young guest of honor liked music, she bought a Hard Rock Café jacket and a few shares of Hard Rock stock. The boy loved the gift and started reading the business pages of the paper every day to see how his stock was faring.

I don’t know if it turned him into a captain of industry. I do know that at 13 he was starting to think about money management. That’s huge.

Money Talks News founder Stacy Johnson also believes that buying stock from companies that make a child’s “favorite things” is a great way to teach finance. Check out his video for more information, then read on for additional how-tos.

Start by explaining what stock investment means to wealth building. Not sure you can? “How to Get Into the Stock Market Safely” should help.

So can reading Jean Chatzky’s “Not Your Parents’ Money Book: Making, Saving and Spending Your Own Money” along with your kid. The financial editor for the “Today” show, Chatzky offers all sorts of financial basics, including her explanation of why the stock market is not gambling with your money:

A gamble – in most cases – is placing a bet where you can do nothing to affect the outcome. What you want to take is a calculated risk. That’s where you have done enough homework to believe that the company you’re buying will do well in the future.

If there’s one thing with which kids can identify, it’s homework.

Which stocks to buy?

As Stacy notes, it’s probably possible to buy stock in your child’s favorite stuff: toys, clothing, restaurants, entertainment. While not everybody is able to buy Apple stock for their kids, perhaps there’s another tech company that’s more affordable.

(My partner’s mom bought Apple stock for her two grandkids way back when it was cheap. When the younger boy got to high school, he’d look at his classmates’ latest iWhatever and say, “Thank you for making me rich.”)

Some kids do better with a visual versus an abstract representation of money. Consider buying a “stock starter package” from a site like, which offers single shares of many stocks as framed certificates. Put it on the wall of your son or daughter’s bedroom as a constant, subtle reminder that wealth building is something that can be achieved.

Starting on a shoestring? Check out online brokerages such as ShareBuilder or TradeKing; see “4 Ways to Invest Without Much Money” for specifics.

Or take a contrarian approach by investing in companies you hate. Explain to Junior or Sister that this way the businesses that take so much of your money each month (e.g., mortgages or cable) will be returning some of that dough.

And if your kid doesn’t automatically start reading the business news, either on paper or online? Help him out! For example, if his stock has a big gain, you could say something like, “I see you got quite a bit richer today.” That should get his attention.

But suppose the stock takes a dive? This is also a teachable moment, i.e., your chance to explain the “stay the course” mentality. Selling in a panic is not the way to build long-term wealth.

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