One of the most memorable gifts I ever received for Christmas was a roll of toilet paper. I think I was probably 9 or 10 and in 4th grade.
We always had two celebrations: Christmas eve with mom and dad and Christmas day with the extended fam, at Grandma and Grandpa’s house in Tillamook, Oregon. Cousins, aunts, uncles, new boyfriends and girlfriends of the aforementioned, random strangers maybe, etc… And the whole crowd fueled by insane amounts of food, dessert, booze and nicotine. As a child it was an exhilarating event. As an adult you either hated it or loved it.
So here’s the thing, everyone opened gifts simultaneously; with 40 or so people taking turns viewing was impractical. But every once in awhile, a fantastic electrifying present would draw the room’s attention.
That was the roll of toilet paper from my grandparents. You see the roll didn’t look quite as tight as a new one…had the look of being re-rolled. The end tissue flapped freely, not glued down. So I started to play with it and unroll it, and low and behold a $1 bill fell out, and as I continued to unroll the paper more dollar bills fell out, in fact dozens fell out and some $5s too, and the bills piled up around me, while the entire room gaped with astonishment and a touch of jealousy.
So here are some financial-minded gift ideas for Christmas and for children:
– Roll of toilet paper (see above).
– Investment account (see below).
– Runner-up: Monopoly.
Possibly the most impactful effective way to teach children about the stock market is to open an investment account on their behalf. This is known as a custodial account. The adult controls the account until the minor reaches the age of 18 (you can extend this to 25). Also, this could be a gifting strategy for other loved ones, like your niece, nephew or grandkids. Now we’re not going to just open the account, you want to fund it with some stock pics.
So think about the technologies, toys or hobbies that touch your children and associate them to their respective public companies (needs to be a publicly traded company). If they’re on Instagram, could be Facebook. Playstation, then buy Sony. They have an iPhone, then buy Apple. Barbie, buy Mattel. Watch Netflix, then Netflix. Etc. Then when you open the account, consider buying one share of each company.
Now have them track their portfolio on an ongoing basis. For their birthday, offer to buy them more stock, but have them assist in the decision of which stocks to purchase. As part of this exercise, have them analyze the performance of each stock/company since Christmas. Ask them and discuss with them why some stocks perform better than others. Finally – and I’d be remiss if I didn’t say this – consider buying an ETF of the US Broad Stock Market (ex SCHB), so they can see how their individual companies/stocks perform against the broader market.
A spin on the above, is opening a 529 College Savings plan and sharing those numbers with your kids; mine are always excited to hear what the balance is.
If these two finance gifts are too much work, then default to Monopoly and enjoy with family.
Have a safe and Happy Holiday Season. Cherish this time with loved ones and family, because in the end they matter most.
Questions relating to this column can be directed to Sean Hathaway, Financial Planning and Investment Advisor; (971) 409-4180; or visit: www.HathawayFinancial.com.