Stocks for Kids - Teaching Children Financial Finesse

Stocks for Kids - Teaching Children Financial Finesse

One of the best ways that grandparents can bond with their grandkids is in playing the investment game together, the older generation, giving the new generation a little financial initiation. It isn't just woodworking, barbecue or fixing the car that can be a great family activity.

The prized quality in shared activity that draws families closer lies is in the way the older generation makes the mysterious world appear clearer to the younger one. A shared adventure among uncharted financial waters could be just the trick. You don't have to go through a broker or worry about commissions for the small levels of activity you have in mind buying stocks for kids.

Children usually have nothing more than a couple of hundred dollars set aside; buying a few shares of stock here and there, perhaps in a company that interests them, like Krispy Kreme's or something, could be especially thrilling - sort of a Monopoly for the real world. As a first step, you could go out to a website like ING's ShareBuilder, that lets you buy their stocks for kids in very small quantities, at practically no commission for each trade.

If you are helping a child invest $100, and this doesn't divide evenly with a stock that is, say, $15 apiece, sites such as this let you buy fractions of a share for the remaining. And if you go to a website like MyStockDirect, you can even directly buy from the company, and cut out the middleman. If your child happens to love McDonald's for example, he could buy their shares directly from them.

So once they make that first purchase, you can show them all the benefits of being a stockholder. You can show your grandchild how to enroll for the dividend reinvestment plan: each time the company announces a dividend, they will just apply it to buy even more shares for the kid. If the one or two shares that your kid has, are not quite enough to meet the company's standard for enrolling in a dividend reinvestment plan, the company could help him make the cut.

Investing today for a child's college education is a well recommended option. Some of the best long-term choices you can make in picking stocks for kids to make their college plans easier, can be unearthed with only little research. For instance, did you notice that no matter what you try to buy online these days, you always end up on Amazon? Amazon's earnings are growing at a faster pace each year; and the stocks are quite affordable now, what is more.

A great tech stock to invest in would be Apple Computer. One wonders why they haven't come up with something like the Wii to take the gaming world by storm but there is hope yet. Or how about the perennial favorite, an oil company? Stocks for kids, to teach them now and to secure their future later on, is a rich field of possible research. For the caring grandparent, a little wise guidance can reap rich returns in a better relationship.

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