5 Stocks Your Kids Would Love to Own

By Damian Davila on 14 April 2017 0 comments

When taking a look at your 401(k) or investment accounts, you may often daydream about how cool it would have been if you started investing earlier. That way, maybe you could have jumped on investments that turned out to be home runs, such as Apple [Nasdaq: APPL] and Berkshire-Hathaway [NYSE: BRK].

If you have children, you're blessed with the opportunity of granting them the greatest gift any investor could want: time. Let's take a look at some companies whose shares would make a great gift for your kids to not only help them learn about investing, but also get them excited about money and business in general.

1. Snap Inc. [NYSE: SNAP]

Do you know what's cooler than a million dollars? $3.4 billion, which is how much money the parent company of Snapchat raised in its March 1, 2017 initial public offering (IPO). Since it has been estimated that 60 percent of Snapchat users are under age 25 and nearly one in four hasn't finished high school, there's a very good chance that your children use this popular social media app.

Leverage their interest in the app to keep them focused on tracking a stock price and keeping abreast of the effects of company announcements, such as Snap's Spectacles, on the valuation of a publicly-traded company. Bonus: You could use Snapchat to send them their monthly allowance, keep a digital record of when you made that money available, and check how long it lasts them. (See also: 7 Modern Ways to Send Money to Your Kid)

2. The Walt Disney Co. [NYSE: DIS]

"Do you want to buy a stock share? Come on let's go and trade!" If you started reading that in Princess Anna's voice, then you're a Disney parent and your kiddos spend a lot of time singing along to similar tunes. Keeping interested in this stock is easy because your kids will read about movie productions, toy developments, theme park construction, and other family entertainment projects.

Disney is a great stock to hold onto for the long run, which is a maxim that you want to instill in any young investor. If you were to have held Disney stock from March 1, 2007 to March 1, 2017, you would have seen the stock price go from $34.39 to $111.04 (a 222.88 percent increase!). Plus, it's a dividend-paying stock, giving you a segue to introduce the concept of fixed income securities. (See also: What Are Income Stocks?)

3. Amazon.com, Inc. [Nasdaq: AMZN]

Parcel-delivering drones, robots that work in warehouses, and voice-activated speakers that can control other home devices. It'll never be dull moment chatting with your kid about recent news from the Seattle-based ecommerce giant.

If you have the budget, Amazon.com is one of those expensive stocks that are totally worth it. Just when you think that the stock can't hit new heights, an uptick during the early November and December holiday season gives the stock price another boost. Time your gift well before the holiday season and provide immediate gratification to your kids from a stock price bump.

4. Foot Locker, Inc. [NYSE: FL]

On the other hand, here's one stock to develop in your children an appreciation for delayed gratification. If your kid is a sneakerhead or sports jock, they'll include a new pair of athletic shoes in their Christmas list. With a current stock price close to $75 per share, one share of Foot Locker goes for about the same as a brand-new, high-quality pair of athletic shoes meant to last at least one year.

Give your child the option of the shoes or one share of Foot Locker, Inc. (Or pick another company that better matches the price of the shoes that they want, including Nike Inc. [NYSE: NKE] or Skechers USA Inc. [NYSE: SKX].) When your child chooses the stock over the shoes, they'll realize that they'll have more available after a one-year period. If they're still unconvinced, ask them to try selling a pair of old, smelly shoes after one year of (ab)use from a tween.

Setting a strong foundation for delayed gratification will boost your child's ability to save for retirement and build an emergency fund. (See also: 10 Investing Lessons You Must Teach Your Kids)

5. Tesla Inc. [Nasdaq: TSLA]

The concept of saving for retirement is completely foreign to most individuals under age 18, maybe even for some under age 25! Getting somebody to plan about 40 to 60 years ahead is a difficult task. One way to get your kid thinking about the future with a fun and optimistic tone is to gift them stock from Tesla, because this company is in the business of electric cars, energy storage batteries, and solar panels.

Plus, Tesla's CEO Elon Musk is so cool as to inspire the way actor Robert Downey Jr. plays Tony Stark in all Marvel films. By following the decisions of a cool and smart CEO, your child could gain further interest in business and entrepreneurship.

How custodial Roth IRAs can help with investing education

If your kid is under age 18 and makes some money on their own, such as through a hobby or during the summer, consider opening a custodial Roth IRA for them. This is a great way to educate your child about investing and providing a "sandbox" in which to make real-life decisions with investments. (See also: Does Your Kid Need an IRA?)

In 2017, your kid could contribute up to $5,500 to a custodial Roth IRA and watch those contributions grow tax-free forever. Many financial institutions require an account minimum of $100 to open a custodial Roth IRA. You could start with some stocks from this list or other stocks that your kid is interested in and eventually move on to index funds and mutual funds. To minimize fees, just keep post-contribution transactions at a minimum.

Gifting your child stocks paired with several years of retirement savings could be one of the best gifts you could ever give them for a brighter financial future.

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