<p>Have a question that reveals obvious financial naivete. Seven year old has b-day money, and I wanted her to buy a little stock to have a better understanding of the market, investing, etc. (realize this is a difficult market time!). Don’t want her to be as financially unskilled as I think I am. Would like her to do something w/$$ instead of blowing it all on stuffed animals (some is going to savings).</p>
<p>Assuming you don’t have a ‘financial broker’ (or whatever) with whom you consult on a day to day basis—is there an easy, economical ‘best’ way to buy stock in a company (say, Toys R Us, lol)?</p>
<p>Thanks, LongPrime, Wondered if I might ask: what’s a TIN?</p>
<p>So I could just walk into a discount broker’s office & say I wanted to buy just a few itty-bitty shares of stock as an educational endeavor for my 7 year old & they’d be okay w/that? Just thought you had to have a reasonable bunch of $$ for someone to want to work w/you in that way…</p>
<p>TIN is taxpayer identification number. I do my trading all online, you could check into some discount brokers and see who would give you the best deal on small trades. I don’t know if there are account maintenance fees, etc, for smaller accounts.</p>
<p>TIN=SSN
A number of companies, such as Walt Disney, offer direct stock purchase plans. These plans allow investors to buy shares of stock directly from the company. Most have a minimum initial deposit. If the company doesn’t offer a direct stock purchase plan, find out if it has a dividend reinvestment plan (DRIP). DRIPs are a great tool for growing your portfolio but they also have a hidden feature that most people don’t know about; the cash investments option. Most plans allow you to send a check in any amount over $10 or $25 to the program administrator and they will purchase additional shares for you. The big benefit here is the fact that the investor is allowed to purchase fractional shares, allowing all of his or her money to begin building wealth. The catch? You have to own one share of the company before you can enroll.
[Fool.com:</a> Drip Portfolio](<a href=“http://www.fool.com/dripport/whataredrips.htm]Fool.com:”>http://www.fool.com/dripport/whataredrips.htm)</p>
<p>You might also check out oneshare.com and shareinaframe.com
Another thing to consider for stocks that pay dividends is whether to automatically reinvest the dividends or not. The nice thing about Disney is the dividend checks have cartoon characters on them that kids can relate to.</p>
<p>UGTMA was how D’s college money started. Our 9-year old Barbie fan became the proud owner of Mattel stock, and shocked our friends when she correctly answered the question what stock exchange it traded on. We satrted with a local discount broker which got absorbed into another brokerage, then, after several mergers, her account is now at E-Trade.</p>
<p>We have some experience with other online brokerages. Ameritrade so far has not charged us a penny for an old accound that has may be 20 bucks in it. I think they are hopeful H will be back with his trading. E-Trade does not charge us fees other than $10 per trade (up to a certain $$ amount or share number). But beware, it costs $20 bucks to get your money in the form of a check (I do not know how much they would cahrge for a direct transfer to an outside bank account). I would avoid Schwab - if your buy or sell order is not filled on the same day, they will charge you several fees. A friend recommended Sharebuilder, but we have not tried them.</p>
<p>Fidelity is another good option for the above stock buying (they have offices, perhaps not in your city, but you can meet and talk to actual people to develop a relationship and ask questions of by phone later). You can easily transfer your accounts from one brokerage firm to another (although some charge more fees to transfer your stocks than others- check on all fees when you open an account). When son turned 18 I found out he did not gain control of the money invested- H’s name is still on it and H still controls it. Therefore no worries about son spending the money foolishly just because he’s a legal adult. You can buy stocks directly from corporations and later let a company such as Fidelity manage the portfolio- getting one monthly statement with all sorts of data your child can analyze (nice to have one annual statement for tax time, also). Our son has never been interested in his investments- we had made them in his name to save on taxes before they made the rule about taxing at parents’ rate up to a certain age (and just after he reached the age where he would be taxed on only his income they upped the age).</p>
<p>I’m going to print out this entire page & use it! </p>
<p>Love the idea re: cartoon characters on the checks. Only thing: daughter is not a Disney fan (princesses are for ‘babies’) and neither does she like Barbie (Mattel). She loves stuffed animals, but I couldn’t find any direct buy options from Toys R Us. Saw oneshare.com, but didn’t want to spend $122 for a share, a frame & a matte! (trying to get into the investment/not purchasing aspect of stocks…). </p>
<p>I’ll keep looking and very much appreciate the advice! Heck, if we walk into Fidelity, I could actually ask some questions about our own finances, as well. :-)</p>
<p>When I was ten years old, my parents bought me one share of General Motors stock. I still have it (because today the cost of selling it is more than the stock is worth!). I didn’t “enjoy” having it in the slightest.</p>
<p>That said, my sister bought both of my children stock for their Bar Mitzvah. (They haven’t enjoyed it either.)</p>
<p>Thanks for those additional thoughts! We’re not members of Costco, though, unfortunately. Good to know that I should buy a stock that daughter can connect with (vs. Gen Motors or whatever!). I’d like to buy a few shares, though, so maybe she can actually make some $$.</p>
<p>Jolynne, google sharebuilder. You don’t need to be a Costco member. I’d looked in to buying some shares of stock for my DS a few years ago and as I remember there was one site where you could buy single shares of stock based on a person’s interest so you could buy stock in a toy company, a video game company, etc. I don’t remember the name now, but I think you could find it by googling “buying stocks for minors”.</p>
<p>Wrigley use to send shareholders samples of new products at the holidays or annual report time. That company has been sold, I don’t know if that perq will continue. Maybe other companies do something similar that would be fun for a child.</p>
Would like her to do something w/$$ instead of blowing it all on stuffed animals (some is going to savings).</p>