Hello Young Investors,
As I write this letter, I am sitting in the cafe sipping tea. I have a seat facing the window that allows me to look outside and watch a bike race. But it also allowing me to do one of my other favorite things to do…people watch. There is a group of people outside who appear to be grandparents and grandchildren. That got me thinking and inspired me to write this letter.
Today, I am going to share an idea that may be a little early for most of you, but hopefully, it will get all of you thinking about the future.
Today’s topic…
Stocks to Buy My Grandkids
By the time my daughter was born, my husband and I had bought her a vast collection of baby paraphernalia. For her first Christmas and birthday, we bought her lots of gifts. So, did her grandmother. This pattern continued for a lot of years, and guess what…She doesn’t have most of the stuff and doesn’t remember most of it. Worst of all…she didn’t need most of it.
As an erstwhile teacher and parent educator, I can tell that most children love to play with water, dirt, and various household items when they are old enough like pots and tools.) Kids do not need fancy to have fun. Honestly, I am not sure that she used all of the stuff that we bought my daughter. I admit to the fact that we all suffered from “first child/first grandchild exuberance.” But, I have different plans for the next generation. From me, the next generation will receive…stocks.
Stocks
Don’t get me wrong. I will buy my grandchildren some other gifts. But, mostly, I will give my grandchildren stocks because I am into long term investing, and stocks are gifts that can keep on giving over a long period. Stocks have the ability to appreciate in value and some stocks have the ability to pay dividends. Equally important to me, they also have a high likelihood of being remembered by my grandchildren.
So here are five stocks that I plan on giving my grandchildren, using a Robinhood* account. (Of course the list may change based on what is going on in the economy at the time.)
1. Disney:
I don’t hide my love of Disney stock as a long term stock. Disney is an iconic franchise. They have everything! They have the parks, which they are constantly improving. Disney Plus streaming is also constantly adding to their offering. The also own the Marvel franchise, LucasFIlms (Star Wars!), and Pixar (I love Pixar!) Disney has had its problems. But, I think that it will bounce back.
2. Hershey:
Hershey is a company that is popular and known for its chocolate like Hershey Bars, Reeses Cups, and York’s Peppermint patties. But, they have other popular products too, like Cadbury Chocolates, Pirate’s Booty Corn Puffs, Skinny Pop Popcorn, Twizzlers, and Jolly Ranchers. There is also Hersheypark amusement park (in Pennsylvania) that is a fun place. Although I believe that the park is not related to the stock, all of the Hershey food products featured there are!
3. McDonalds:
I think that it was legendary investor Warren Buffett who said to buy the stock of companies that people love. Well, this well known restaurant chain fit that bill. People love their burgers, fries, and shakes. Young children love their happy meals. According to a Reader’s Digest Article*, McDonalds serves 75 hamburgers every second. But, something that some people don’t know is that McDonald’s make a large percentage of their profit off of the real estate that they lease to their franchisees. I like that combination of sources of income, both their food and the real estate.
4. Apple:
This is another company that produces products that many people love. iPhone, IPad, Mac computers, AirPods, and more are adored by people of all ages. This includes many kids! Furthermore, Apple reportedly has lots of cash. That means that they have money to continue to both expand with new products and to pay dividends.
5. Mondelez International:
This company may not sound familiar. But, they are the makers of some of the biggest snack and food brands out there. Some of their brands include: Chips Ahoy, Sour Patch Kids, Philadelphia Brand Cream Cheese, Cadbury Chocolate (Cadbury is sold by Hershey in the U.S. and by Modelez in the rest of the world.), Ritz, Trident, Triscuit, Toblerone, and Wheat Thins, just to name some.
There are other good stocks that I like for long term investing. But these particular stocks are also companies with which children are likely to be familiar. Thus, I will be able to use them to introduce my grandchildren to stock investing.
If you want to start your grandchildren (or children) on the road to financially secure futures, consider buying them stock. Just keep in mind that, usually, children can’t own stocks in their own name. So, you will need to open a custodial account. In order to open an account for your grandchildren (or children), each child will need a separate account. You will also need to have each child’s social security number.
Key Takeaways on…
Buying Stocks for Your Grandchildren
Young children don’t need as much crap as many of us buy them. Stocks make terrific gifts, that much better staying power than toys. Stocks can be gifts that continue to give years into the future. If the companies that you give are familiar to your children/grandchildren, they can be used as a fun way to introduce young children to stocks. Usually children cannot own stock in their own name, so parents/grandparents need to open custodial accounts for them.
Stay cool and remember: Your future is determined by what you do today.
Best,
Rich Mom
You can use any brokerage house to start investing, for yourself or your child.
*I used Robinhood to start my daughter on investing, because it is easy to use and has a youthful interface. I think it would be a good app to buy stocks for your grandchildren. I like it a lot. You can open an account using my link. Not only will it It will not cost you anything extra, at the time that I am writing this,
you will receive free stock from Robinhood.
Please note: If you use my link, I will receive a small payment from Robinhood, at no expense to you.
Do you want to read more? Check out:
Why Should I Invest?
Spilling the Tea on How to Start A Robinhood Investment Account
Ten Secrets to Building Wealth
I am not an investment advisor. Always do your own due diligence and research before investing. Check with your own investment advisor.
Also remember that past performance is not a guarantee of future performance.