How to Buy Stocks for Your Kids

Joseph Meyer
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Buying Stocks for Your Kids

If you want to buy stocks for your kids, there are definitely ways to go about it correctly. One of the top ways is to start out buying a company stock like the Google stock.

You want to start out with companies like Google that you feel comfortable being around. Google is a great stock because you know the CEOs are doing everything right.

A company you buy stock from should be a company you want to succeed because the more successful the company is, the more successful your stock is going to be, too.

A great way to decide on the next company to buy stock from is to look at a chart of their stock price over the last 10 years. If they’ve had steady runs up and down, that helps. You want to buy a stock from a company that seems to be operating well as opposed to a company that is doing something differently.

You want to buy stocks from companies that are doing things that you like and companies are doing things that serve you. For example, when Apple was first started, they began to sell personal computers. What they were doing was important to you, so you wanted to be a part of that. It doesn’t necessarily have to be something that you would do, but it should be something that you do like.

Helping Your Child Choose Stocks

Investing in the stock market sounds like a fairly complex task to teach kids and one that’s best left to experts. But what if your child has a chance to participate in the stock market as a buyer? Is there a way for you to teach your kids in real life the lesson about the future value of your investment as you help them make their very own stock purchase? Yes! It’s called Children’s Investment Foundation (CIF).

CIF is a popular initiative in the UK to teach kids about the stock market. Children can help choose a stock for a company and see how the stock market works through this fully regulated share dealing service.

Your kids who are over 8 years old (must be 12 years or older for unsupervised accounts) can buy a real-life stock that’s listed on a stock market. For this, they’ll need some money – although you can help them open an account with a deposit.

Buy Stock Through the Company

Once your kids get older, it only takes a minute to change the names on your joint brokerage accounts. Some of the larger companies also allow you to buy stock shares directly without the need for a broker. My preference is for companies like Wal-Mart and Disney to buy stock in those companies. They have a decent dividend and their stock history suggests that the dividend rate will keep increasing. Buying stocks through Wal-Mart or Disney directly lets you buy the shares at very low levels.

I’m willing to pay a little more to buy Disney stock since Freddie Mac corporation owns stake in Disney just like they do in Wal-Mart. When I was in high school, I remember going to the Disney World in Orlando with my high school class. It sure would be neat to own a piece of Disney stock now that I’m much older than when I attended high school.