Imagine how unique a gift it will be if you purchase your child stock in their favorite company for their upcoming birthday, Christmas, or whatever occasion may be approaching. We adults think of stock as a vague intangible object. But kids think of stock as this “cool” thing that adults have. So when they get to have stock too, and none of their friends have stock, that makes them feel unique.
What if you purchased your child shares in Apple? Do you think they would find that cool? How about Amazon, or McDonalds, or Coca-Cola? Every time they purchase products from these companies, they are reminded of their ownership!
Here are five reasons why you really need to buy your kids stock in companies for their upcoming birthdays. In the article, you will find it is quite simple to purchase stock for your children; you can purchase stock in companies like Apple and Amazon, for as little as $25!
Let’s go over the 5 reasons I think you need to purchase your children stock this upcoming birthday.
1. Compound Interest
“The most powerful force in the universe is compound interest”
– Albert Einstein
Compound interest is a miraculous wonder. The younger you start compounding interest on money, the more exponential growth your money can earn down the road.
If my mother had purchased $100 worth of stock in Coca-Cola for me when I was five years old (about 27 years ago), today that $100 would be worth over $1,000! [i] If she had purchased it the day I was born, it would be worth over $3,400. Those five years not having the stock would have lost a large amount of exponential growth.
Imagine how much your child is losing each year you do not purchase them stock in companies. Compound interest is one of the wonders of the world, and it is something you should remember when you purchase your children’s next birthday present.
2. They can learn the hard way
The counter point to our example of compound interest is the ability to learn from loss. The fact is, not all stocks will grow over time. And guess what – that’s ok. If you purchase your child stock and that stock does not grow, they will learn a valuable lesson from it.
It is a great thing for a child to learn the value of money when they are young. If they watch their stock depreciate, they will learn a valuable lesson about investing. One of the best parts about this, is that they will likely pay attention to the company they are invested in. They will watch and learn what happens to the business over time, and this will help them view the world in a whole different way.
It will also allow you to teach them important concepts; like diversification. They can learn that you should not put all your eggs in one basket. This is invaluable knowledge for them for the future!
3. They will be excited about investing at a young age
If you expose your children to this idea of participating in the profits of a company when they are young, you are giving them a whole new way of viewing the world. Instead of going to the store and purchasing a random product, they can think of money benefiting the very stock they own.
For example : maybe you purchase your child stock in Chipotle. Every time you take your child to Chipotle, they think of the money being spent for their burrito as money going towards a company they own.
It is a completely different mindset for your kids to think of the products they use. Instead of blindly consuming products, they will think of the actual company producing the product they are invested in.
4. Warren Buffett Started When he was a child
There really is no better example than this! Warren Buffett purchased his first stock with his sister, Doris, when he was 11 years old. He and Doris went in together on Cities Service (modern day Citgo). He learned a tremendous lesson through investing early when his stock decreased in value by 30%! Funny enough, he didn’t sell after the decline. He waited patiently until it recovered and sold it for a tiny profit. Unfortunately for Warren, that stock gained over 300% after he sold!
Imagine the wisdom a kid can take away from an experience like this. While all the other kids are playing with baseball cards, Warren was learning the ins and outs of investing.
Obviously, those experiences investing in his youth paid off!
5. You can buy your children stock in under 5 minutes
I would wager that the number one reason parents don’t purchase stock for their children is because they have no idea how. If you are a parent, you likely have this preconceived notion that purchasing a stock for a child is a long, drawn-out process. One where you have to create custodial accounts with notaries and high fees.
I have some great news for you, it is simple to purchase your children stock in companies for their birthday. Stockpile is a company set up just for this reason. All you have to do is head over to Stockpile, find the stock you wish to purchase for your child, create an account, and you can purchase stock for them in less than 5 minutes.
Not only does Stockpile allow you to purchase stock for someone else, it also allows you to purchase fractional shares. This means if you don’t want to purchase a full share of Apple for over $100 per share; you can purchase a portion of a share. You can purchase a gift for your child worth $25 of Apple stock if you want to!
As you can see, Stockpile is setup both to purchase stock for someone else, as well as the ability to purchase smaller amounts of stock. The whole process takes less than 5 minutes; it really is that easy.
I also have a sweetener for you. I have a relationship with Stockpile, and if you purchase a stock for your child using my link, you will receive $5 to add towards a stock!
Here is my link: $5 Stockpile purchase bonus
Here is a humorous video from Stockpile:
I really hope this article motivated you to purchase stock for your children. If you have any additional questions about how to do this, feel free to leave your questions in the comment section below.
Thanks for reading!
Has anyone purchased stock for their children? Does anyone have any personal examples investing when they were kids?
[i] Assuming reinvested dividends https://dqydj.com/stock-return-calculator-dividend-reinvestment-drip/
Disclaimer: These are the ideas and opinions of the author. The author is not responsible for the actions of those who read the posts on this blog. Each individual reader has a unique situation and unique needs. This blog is not intended to solve those unique situations of the readers. This blog is not liable for decisions made by the readers of this blog.
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