Stocks for Kids

I’ve been wondering when I should introduce my son to stocks. He’s been asking me what I’m doing when I’m researching special situation stocks. He really thinks its neat that I have a website and he loves looking at the numbers. I’ve explained to him how I’m working to find ways to make money from home easily. I think he understands the basic concept of money now, because he has been collecting change to save up for some Hot Wheels toy he saw on TV. However, I don’t think he really knows what a business is yet.

Given that he’s not yet in elementary school, I have plenty of time to figure this out. I think when the time comes to introduce him to stocks, I think it would be best to get him a physical stock certificate to make it more real and tangible. A dividend paying stock would also probably be preferable because the quarterly dividend checks would likely keep my son more interested in the stock. Finally, I think the stock certificate should be attractive looking so I can hang it up in his room.

Disney stockAt this moment, a Disney stock certificate sounds like a good choice for my son’s first stock certificate. It’s an attractive looking certificate that is illustrated with Disney characters. The colors match the color of my son’s room, which is an important feature for my wife. The Walt Disney company currently pays a $0.35 annual dividend that currently yields 1.1%. While that dividend is modest, it will still be exciting for my young son to receive an annual check addressed to him. The wide economic moat of the Disney brands should keep the dividend safe for quite a while.

A framed stock certificate makes a great gift for child in your family. When considering purchasing such a gift, it might be worth buying the stock though one of the specialists that deal with framed stock certificates. This will likely save on brokerage fees and also provide an attractive frame, which also usually allows for a personalized engraved message. It might be a few more years before I get a stock certificate for my sone, but it is a gift defenitely worth considering for older children.

Disclosure: I do not currently own shares in The Walt Disney Company. This is a sponsored post.

3 thoughts on “Stocks for Kids

  • March 24, 2008 at 10:25 am

    Just a question, and after some years how could i sell then the stock certificate?

  • March 24, 2008 at 3:39 pm

    I got a chuckle out of this. What are you going to do next week when he wants to know where babies come from?

    While you have the right idea, you are making a huge project out of something the kid probably doesn’t remember he asked about. Just take the learning opportunities as they come.

  • April 3, 2008 at 12:16 pm

    Here is a cool tip for helping your children to invest. This is something that I have done with all 3 of my children – It really gets them involved.

    1. As they watch tv, go to the mall etc. They will find products they like (dolls, shoes, etc.) Once they find a product they like take them home and research who produces it (if that is not obvious).

    2. Buy them at least 1 share of the stock in their name and have the certificate sent to you (getting the certificate is important that is what makes this work)

    3. Once you have the certificate in hand get a color copy made and put the original certificate in a safe deposit box.

    4. Have the copy framed and hang it on the wall in their room.

    5. Imagine what it is like when their friends come over and play in their rooms. Their friends will ask what are these things hanging on your wall? To which your child will reply “These are all the companies I own”!

    6. Doing this will get them involved, it will help them understand ownership, give them a sense of pride and make their investments personal becuase they helped choose them.

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