Here’s a Cyber Monday lesson that will stick with you kids all their lives: In addition to giving gifts of toys, games and clothing, give them small gifts of stocks and bonds.
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High-wealth individuals do this routinely and know that teaching money lessons starts from an early age and lasts into adulthood. Although these gifts may seem foreign to some people, the well-to-do know and see it as an educational tool and a wealth-builder that keeps giving to their kids and their grandkids.
BREAKING DOWN THE LOGIC
You have the opportunity to have a teaching moment with your kids. Explain to them that the stock you are giving makes them a part-owner in a company which they are familiar with and gives them a say in how the firm is run, along with other ownership privileges.
Further explain to your kids that they are entitled to dividends paid every three months, which they can spend, or better, reinvest in more stocks.
In addition to dividends, tell the kids that stocks can go up in value. Some stocks over the years have quadrupled or quintupled in price over the lifetime of their investor owners.
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On the adult side of the equation, you can give stocks or bonds you already own to your kids and grandkids. Well-meaning people want to leave a legacy to their loved ones, and this can be an opportunity to benefit from the tax breaks and altruism.
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So, what holdings are popular for this strategy? Although it’s important to give some thought to the names – and I’ll get to that part – I will caution you: This is not a set it and never-look-at-it-again situation.
I know what you are thinking. I was going to say something different, wasn’t I? You will need a good adviser and a tax professional to properly execute some of these strategies.
Okay, you’ve waited long enough. Here are some of the stocks to teach your kids a lesson with and names they know:
| Ticker | Security | Last | Change | %Chg |
|---|---|---|---|---|
| NKE | NIKE INC. | 71.49 | -0.88 | -1.22% |
| DIS | WALT DISNEY COMPANY | 112.08 | -0.95 | -0.84% |
| GOOGL | ALPHABET INC. | 1,030.10 | -13.33 | -1.28% |
| T | AT&T INC. | 29.36 | -0.41 | -1.38% |
| UA | UNDER ARMOUR INC | 20.08 | +0.05 | +0.25% |
| NFLX | NETFLIX INC. | 258.82 | -3.31 | -1.26% |
| FB | FACEBOOK INC. | 131.73 | -3.09 | -2.29% |
Now, I know some of these names are controversial, however, let’s save that for another day and another article. You’re definitely going to need to do your own due diligence on these names, but it could be a catalyst to give the gift that gives way beyond this and many holiday seasons.
Aquiles Larrea is the CEO Larrea Wealth Management and acts as the personal CFO to help get Executives, and Entrepreneurs out of the office and enjoy the time with loved ones on their own terms. Aquiles has appeared on FOX Business, Spanish television and national radio programs. Together with his elite partners, he helps clients create their own “Empanada of Success.” He is author of “Your Money and You: Ultimate Wealth Guide for Latino Entrepreneurs and Executive. Helping you to create your ‘Empanada of Success.'”
