How to Start Buying Stock For Your Kid

The holiday season has begun and parents are asking how to start buying stocks for the children in their lives. Here are a few options from simple and easy to a bit more complicated.

If there’s a child, or children, in your life that you’d like to purchase shares of stock for, here are a few options to make it happen:

Gift a Share

The easiest way to gift a single share of stock to a child, or anyone, is to visit a site like or and purchase a share of stock just like you would purchase anything else online.


There are only a few choices so you won’t be overwhelmed with options.

You check out just like any other purchase so it’s quick.

After you pay, the website will mail a physical paper to the recipient. You can make it as nice or as plain as you’d like.

The company you purchased stock in will contact the recipient to get their tax payer information so you don’t have to be involved with social security numbers.


It’s expensive. The company is a middle person. A stock that’s trading for $7 may still have a “transfer fee” of$40 to $70.

The recipient will not receive an actual stock certificate. Most companies don’t offer them anymore.

Open an UGMA Account

Uniform Gift to Minors Act and Uniform Transfer to Minors Act (UGMA/UTMA) are investment accounts that require an adult open the account with the child. It will be technically be the adult’s account until the child comes of age. That age can range anywhere between 18 and 25 depending on your state. You can buy and sell stocks in these accounts at whatever amount the stock is trading at and you’ll pay minimal account fees (compared to gifting a share directly) however you’ll also have to manage an account.


It’s cheaper to purchase stock. So investments can gain value quicker.

You’ll be able to purchase more shares with the same amount of money since there will be fewer fees.

The child isn’t in control of the account (as long as you don’t give them the log in information) so you don’t have to worry about them making mistakes.


Someone will have to co-own the account with the child. That means someone will have to open the account with the child and adult’s social security numbers. If you aren’t the parent, asking for the child’s social may be a huge ask.

Whoever is on the account with the child is going to pay taxes on gains and must file taxes appropriately every year.

Open a Brokerage Account

Some investment firms will let teens open an investment account alone. These accounts have a few restrictions but generally function like any other investment account. If the child you want to gift stock to is at least 13 years old, this may be a good option. Check out Feidelity’s Youth Account.


The accounts often have financial education tools built right in so students can learn investing principles.

Some accounts allow fractional investing so you can provide a specific amount of money and the young person can choose how they’d like to purchase shares.

Since the account needs no co-owner, little personal information has to be shared.


Since there is no adult co-owner it may be difficult to monitor the young person’s choices.


If you are a parent, opening up a UGMA or UTMA account for a young child makes the most sense. If you’re a parent but your child is a teenager, opening up a youth brokerage account might make more sense.

If you are an auntie, cousin, padrino, etc. then gifting a share of stock is easier and requires fewer entanglements.

Regardless of how you choose to introduce stocks to the young people in your life, there’s no time like now to get started. The one thing that young people have in their favor is time. Even if you can only provide $20 per month (or $240 a year), that $20 could grow to $97,000 assuming you provide $20 per month for ten years and got a 7% annual return and then NEVER PUT ANOTHER DOLLAR IN. Imagine if you started with $20 per month when they were ten years old and then your young person added $50 once they began working … and then they increased that contribution to $100 once they got a full-time job … and then … well, you get the picture.

In case you want to play with the numbers, check out this compound interest calculator.

Happy buying assets instead of liabilities this holiday season!

Shay Olivarria is the most dynamic financial education speaker working today. Previous clients include: Gateway Technical & Community College, SCE Credit Union, American Airlines Credit Union, and San Diego City Community College, among others. She has written three books on personal finance, including Amazon Best Seller “Money Matters: The Get It Done in 1 Minute Workbook”. Shay has been quoted on,, NBC Latino and The Credit Union Times.The 2nd edition of “10 Things College Students Need to Know About Money” is available now.

Too Many Middle Class are Working Poor


The American Dream.

If you asked most Americans, I think they would say that they aren’t poor. I think they would say that they are part of the middle class. Many were surprised to find out how much money one has to earn to actually be considered middle class. Take a look at this chart and see where you land. If you want to be more specific, use this calculator from the Pew Research Center to find out how you compare to other families.

Since so many want to believe that they aren’t poor, they are just broke (hello, Dick Gregory) many also have trouble admitting that money struggles are an issue. According to The Atlantic, every year the Federal Reserve Board does a survey about personal finance. This year, this data point stood out:

The Fed asked respondents how they would pay for a $400 emergency. The answer: 47 percent of respondents said that either they would cover the expense by borrowing or selling something, or they would not be able to come up with the $400 at all.


It might surprise some, but it doesn’t surprise me. For years I have been suggesting that having $500 in an emergency account (read Money Matters: The Get It Done in 1 Minute Workbook or 10 Things College Students Need to Know About Money) could be the difference between someone making it and someone going under. Many of the people that think they are middle class could actually be considered the working poor (I wrote about the concept of the working poor here, here and here).


If you are not sure what you would do if you needed to come up with $400 here are some ideas to help you build your emergency fund:

Idea #1 Open a money market account with the goal of having $500 in it within six months. If you deposit $21 per week you’ll reach your goal in no time.

Idea #2 Put $50 per check in an envelope and add another $50 each paycheck. You’ll have $500 saved up in 5 checks (that’s 2.5 months). The challenge with this method is that if your home is broken into or catches on your fire, your money goes with it.

Idea #3 Open a secured credit card. When this happens, sometimes people turn to a payday loan. Instead of that open a secured card with a $500 limit. Once you have your $500, if you don’t trust yourself, send that $500 to a credit card company that will hold it for you and do two things 1) provide you with a credit card with a $500 limit to use in emergencies and 2) hold that $500 cash deposit so you don’t spend it and return it when you close your account.

Obviously, I think the best option is idea #1 but I understand if there are circumstances that make this difficult. Whichever option you choose, start creating a financial cushion now.

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