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As we near the holiday season, you might be stuck on ideas for stocking stuffers to more elaborate gifts.
One thing to consider as a holiday present is something that I like to call an investment gift.
What do I mean by that?
Well, for many years I’ve been the aunt that gives investment items to my niece and nephews.
Today, I’m going to talk to you about three of these items. Perhaps they’ll give you some ideas for similar gifts.
The idea here is not to give money in the form of cash, but to add lasting value by sharing time, as well as the learning process of investing.
Over the years, these sorts of investment gifts can help be the foundation of a lifelong financial education.
And yes, they can even create a little bit of wealth for your family members as well.
1) Gold or Silver Coins
As longtime readers know, I give silver dollar coins to my niece and nephews as birthday gifts. That goes for holidays, too.
I’ve been doing this since they were one year old. Over time, our related conversations and interactions have deepened.
So every year, I buy a particularly interesting silver dollar coin for each of them.
When they were much younger, I’d give them to my siblings for safekeeping. But as they got older, it was more of a direct gift that has evolved over the years.
For instance, my niece decorated her own piggy bank to house these silver coins. My nephew used to put them in various Lego structures he built, but now, he keeps them in his sock drawer.
The point is, as they’ve gotten older, the coins represent more than a gift or their intrinsic value.
For example, they were blown away when I explained that a $1 silver coin is worth more than $1.
Indeed, a Silver American Eagle coin contains 1 troy ounce of fine silver. It is the official bullion coin of the United States. It retails for around $24.
Coins offer a good way to talk about history, too.
A Thomas Jefferson coin invites a discussion about the Declaration of Independence, while a George Washington one can start a conversation about the American Revolution.
I choose coins that I can buy directly from the U.S. Mint. The Mint has catalogs of coins and provides accreditation certificates for them.
Coins arrive in lovely blue boxes that make holiday gifts even more festive. You can check them out for yourself on the U.S. Mint website.
When one of my nephews turned 18, he and I had a sit-down.
He’s a very responsible young man and has been working part-time jobs through high school, just like I did back in the day. (I tutored math for members of the football team.)
He’s shared a bank account with his mom, but would ask her to put money in it on his behalf, since he was 13.
I’m happy to say my nephew has been working steadily through high school, and he’s now in his first year of college. He wants to become a doctor. Makes me so proud.
Recently, I talked him through opening a Block (previously Square) account on his phone. (He already had a Venmo account by that time.)
Now, being 18, he spends most of his time on his phone anyway. But I wanted to get him comfortable with using a financial app for tiny investments, without taking too much risk.
So we sat down together as he created a Block account. And we talked about the pros and cons of Bitcoin (he asked!), as I’ve discussed with you here in these pages.
I transferred a small dollar amount of Bitcoin from my Block account to his. That was part of his gift. The other part was the time we spent together to open this account and use it to accept those funds.
Now, this is not necessarily to get him to become a Bitcoin advocate. The point was to establish a place where he can get used to observing the value of his Bitcoin, whether it goes up or down.
We talked about not investing more money than you can afford to lose or might need right away for any purpose.
I left it to him to decide whether to add to his Bitcoin positions or not in very small amounts, and to call or text me if he ever has any questions.
It’s easy to set up a Block Cash App account that lets you buy and sell Bitcoin, transfer money to other Cash App contacts, or even buy stock.
Which gets me to our final investment gift idea…
3) Fractional Shares
The same said nephew and I had a conversation about the stock market just before he began college this fall.
It actually surprised me how many high schoolers talk about the stock market amongst themselves.
My nephew told me that one of his friends was concerned about the market volatility and his investments.
I told my nephew that the best thing to do during times of market choppiness is to hold onto stock positions.
One exception is if something has fundamentally changed with the company that makes its prospects different than what you originally anticipated. Then, your money might be better spent elsewhere.
We talked about how you should have patience in terms of what you do and how you invest. You should also only make investments that you understand, or for which you can gather knowledge or have a personal connection to.
We also discussed buying a fractional share for a certain amount of dollars of a stock that he was interested in, and we talked about that stock.
He’s an athlete and decided to buy a fractional share of Nike.
Nike shares today trade for about $103. He decided to buy $50 worth, so the equivalent of about one-half of a share.
And the good thing is, he’s adding to it from money he makes working while in school. He’s “legging in” with $5 a week.
Learn by Experience
The best way to learn about financial security is to start by investing a very small amount, and then observe what happens.
These are not lessons taught in our schools. But the gift of this sort of financial education can provide real-life dividends in terms of financial wisdom for decades to come.
So, I hope you consider these three types of investment gifts for the holidays.
Editor, Inside Wall Street with Nomi Prins