If you were shopping in 1984, you remember that Cabbage Patch Kids were the hottest toy that nobody other than the most savvy shopper could find. The 2011 version of the Cabbage Patch kid is the LeapPad. If you're not one of the 14% who say they plan to buy one this holiday season, you may not know that it's the children's version of a tablet device. (To learn more, check out The Hottest Toys This Christmas.)
TUTORIAL: Investing 101
The LeapPad may be one of the few hot items this year that is made to be educational, but it's not geared towards the older child, the one that may want a new wardrobe or the latest blow-everything-up video game.
If you don't want all of your child's gifts to hold no lasting value, and are interested in teaching your kids lessons about money management, it's time to purchase some stock.
How Does It Work?
For adults, purchasing stock is about as ceremonial as direct deposit. It all happens on your computer screen and the only certificate you get is a receipt for the order that you print out yourself. They don't even send you a certificate any more, but there are ways to put some ceremony in this gift.
First, what are your child's interests? Do they like Disney characters? Do they beg for an ice cold can of Coke with dinner? Think about those interests in terms of a company they would find interesting. During the holiday season of 2011, the top six most popular gifted stocks are: Disney (NYSE:DIS), Harley Davidson (NYSEA:HOG), Starbucks (NYSE:SBUX), Ford (NYSE:F), Coca Cola (NYSE:KO), and Under Armour (NYSE:UA). Other ideas include Microsoft (Nasdaq:MSFT), Heinz (NYSE:HNZ), Hasbro (Nasdaq:HAS), Hershey (NYSE:HSY) and GameStop (NYSE:GME). (For more, see The Evolution Of Ticker Symbols.)
Where to Get It
Once you make your decision, you have two choices. You can use an existing account with a discount broker and ask them to help you get an actual stock certificate, or the better option is to purchase from one of the online companies that specialize in gifts like this.
Oneshare, one of the most popular of these companies, offers a share of stock that comes with a colorful certificate framed and ready for display. This company also sends child-friendly information about what it means to be a shareholder and allows further purchases of shares making the gift into an investment. Purchasing from this company or others will cost about twice the price of the actual share, but those costs cover the frame, mat and certificate.
Why is this the perfect gift to teach your child about money? One parent said that after they purchased their child shares of Coca Cola, they would go to the grocery store and have discussions about how the 12-pack of Coke they just purchased was adding value to the shares of stock that she now owned.
The Bottom Line
Giving children a real, tangible way to learn about money and how to manage it is far more valuable than the year's hottest gifts. That may be why the gift of just one share of stock has been an idea that has withstood the test of time, unlike those Cabbage Patch Kids. (To further teach your kids, read What Kids Should Know About Money.)