Buy Stock for Children
Children receive the same gifts each year, toys, colors, books, candies; name it, they have it. What else can you give your children then? If children already have their basic necessities then it is better to give them something that they can use sometime down the line.
Why not buy stock for children and give it to them as gifts for their birthdays? You could start with companies that they are aware of, like maybe Toys R Us, or a brand of chocolate that your child loves. If you buy stock for children at an early age, by the time they even fully understand what stocks are, their investment will have grown and hopefully multiplied. Investing in stocks earns more than saving the money in the bank.
You can buy stock for children with online stock traders who sell stocks directly. In addition, this method costs less than having to go through a stock trader. Dividend Reinvestment Plans or DRIPs are also popular options in buying additional shares and investing your earnings.
You may start by giving your children or grandchildren money to buy their first stocks. Then for their birthdays or during Christmas you could buy them some more. Each year, as their earnings increase and as they grow, you could begin explaining to your children or your grandchildren about stocks by showing them how to buy more shares. This way they will have the real life opportunity to learn the value of money and investing which will benefit them greatly in the future.
Another idea is to use pictures and colored markers to explain to the child how the trading system works. Online trading is actually a fun way to introduce this to children because they can easily see the numbers from the screen. Older children are able to distinguish how much earnings they have received from their stocks. You could set up a small game where you put all the companies' names in a box and ask your children to buy and sell stocks among themselves. Do not forget to teach them the rules like how much stocks are allowed to be purchased at a certain price level. Do not underestimate your children's ability to learn these financial details. When you make it into a game more children can easily understand all of the rules of buying and selling stocks.
As they grow older, you may give them the freedom to choose stocks for themselves or maybe to rationalize with you when making choices. Of course you have to keep everything simple and easy to understand so that your children will not be overwhelmed. The important thing is to show them the value of investing while having fun as well.
As parents it is important to provide your children with their basic necessities. However, it is also a good idea to help them become independent and savvy about their money. The best gift to achieve this end is to buy stocks for your children.