This holiday season, consider a gift that doesn’t require batteries or end up in a donation bin by next June. Gifting stock —ownership in a real business — is a “stock-ing stuffer” for kids and teens that can spark a lifelong interest in financial literacy and investing.
- NFLX stock is moving. See the chart and price action here.
The Vehicle: Custodial Brokerage Accounts
A custodial account (UTMA/UGMA) is the standard vehicle for purchasing shares on behalf of a minor. An adult (the custodian) manages the account, but the assets legally belong to the minor.
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Once the child reaches adulthood (usually 18 or 21, depending on the state), control of the account — and all its growth — is turned over to them fully.
It could be a gift that benefits the recipient for a lifetime.
The Portfolio: Invest in Kids' Favorite Brands
The best way to engage a child is to buy companies they interact with daily. This makes the abstract concept of the stock market tangible.
- Roblox Corp. (NYSE:RBLX) and Netflix, Inc. (NASDAQ:NFLX): If they spend their weekends gaming or streaming, owning these shares helps them understand that they are part of the business ecosystem.
- Walt Disney Co. (NYSE:DIS): Disney could be the perfect “first stock” because its movies, characters and theme parks provide a clear connection for the child.
- Nike, Inc. (NYSE:NKE): Next time they lace up their sneakers, remind them they own a piece of the brand that they love to wear.
- McDonald's Corp. (NYSE:MCD): A classic pick that bridges the gap between buying a Happy Meal and owning the restaurant.
The Lessons: Dividends, Fractions and Patience
The gift is about more than money; it’s about learning the basics of market mechanics.
- Fractional Shares: One share of Netflix is nearly $100, but many brokerages allow purchases of “fractional shares” for as little as $5. Using fractional shares, a child can own a slice of almost any company and learn that regular investing, even in small amounts, adds up over time.
- Dividends: Stocks like McDonald's pay dividends, a portion of profits paid out to shareholders. Showing a child that they earned a few cents just for holding the stock can be a powerful introduction to passive income and compounding.
- Long-Term Investing: Selecting stocks with solid fundamentals and a belief in their long-term growth can teach a child that daily ups and downs fade away and long-term investing pays off over time.
The stocks are the holiday present, but financial literacy is the legacy. Early exposure to investing builds a mindset of wealth that is worth far more than the initial cash gift.
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