Giving a share of a stock as a gift is a fantastic minimalist birthday present for a child.
For our baby’s first birthday, we didn’t have a huge birthday party with 32 gifts from his baby friends (we really don’t have very many baby friends). We didn’t have a huge birthday party because we aspire to have a somewhat baby minimalism lifestyle. Besides, they say the first birthday party is mainly for the parents anyways. We will wait out the birthday party thing for as long as we can.
We like to give minimalist gifts that won’t be thrown away (since we will be the ones doing the throwing away for a few years).
We got him a free birthday cake from Thrifty’s Foods, though! Here are the birthday freebies for kids in Canada that you can get.
Didn’t forget about you though, here are some birthday freebies in Vancouver or birthday freebies in Canada for grown ups.
We didn’t buy him a massive magnetic wooden organic building block set that cost $144.00 (though one of our generous friends gave that to him as a gift just because! Don’t worry, it wasn’t really organic, I’m being facetious).
What we did do, was buy him one physical share of Berkshire Hathaway (BRK.B shares, because we are not that baller for BRK.A shares which $284,000 USD as of writing) in his name so that we can frame it on his bedroom wall.
We went through the financial checklist for new parents in Canada and decided to go above and beyond preparing our child for an interest in investing by getting them a share of stock as a gift to frame on their bedroom wall.
We did the same thing for our daughter’s 1st birthday as well. Obviously a few years later, our daughter’s BRK.B was more expensive than our older child’s.
Might as well do something with that Canada Child Benefit money from those Child Tax Benefit payment dates.
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Benefits of Giving a Share of Stock as a Gift
There are lots of benefits to giving a share of stock as a gift.
It is a great way to teach a money lesson to your children.
Many people start becoming interested in investing from a physical share certificate that was gifted to them. It makes investing in businesses more ‘real’ to children. In fact, the owner of Give A Share created Give A Share because of a physical certificate of Topps chewing gum that was given to him by his parents when he was a teenager (well this is according to a comment).
Also, it’s a great form of memorabilia. My husband and I are huge Warren Buffett and Charlie Munger fans and what’s better than having a physical copy of a Berkshire Hathaway B stock? Well, the answer to that is having a BRK.A stock but I digress.
If you select a dividend paying stock you’ll even get dividend cheques mailed to you! Pretty cool eh?
Drawbacks of Giving a Share of Stock as a Gift
There are some drawbacks to giving a share of stock as a gift.
Depending on the stock you ‘pick’ for your child, you might be encouraging speculation or just buying stocks in companies that they use (whether or not it is well managed, has a good book value, has a good margin of safety are not reviewed) and like.
But if you are buying one share, I don’t see this as a big deal at all.
You also have to have one of the parent’s names on the certificate since the child is a minor. It can also get a bit annoying tax-wise to keep track especially if you have a stock certificate paying dividends (if you are buying it outside a brokerage).
Also, if you want to submit your paper certificate to a brokerage in the future, you may need to pay fees.
Questrade has high fees, about $300 whereas the bigger brokerages (e.g. TD Waterhouse, etc.) are cheaper, about $50. DRIPprimer.ca has a list of the fees to deposit stock certificates.
give physical share Certificate as a gift
There are a few companies that can issue you a physical share certificate as a gift.
These are for US-listed companies but you can buy them and have it shipped to Canada.
This is what we did.
Unique Stock Gift or Frame A Stock or DisneyStock.com
The website Unique Stock Gift looks a little sketchy and it definitely could use a makeover, but it is definitely legit because that’s who we ordered the certificate from. They have a few website names but they are the same company. They ship your certificate with First Class Mail from the US Postal Service.
We paid about $220 for one share and added another $49 for the transfer fee. At the time of purchase, one B share of Berkshire Hathaway (BRK.B) was about $195 so we paid about a 14% premium just on the stock alone.
The price of the physical share was more than the market price for the share. You can also get a keepsake folder for $4.95 and a plaque for $6.00 (you can personalize the plaque). It takes at least 6 weeks to deliver to you. We ordered it and it came about 8 weeks later. It probably took longer since we were ordering it from Canada.
The great thing is that you get the actual physical share. Each company has different designs, they are beautiful! They even have MO (Altria) physical shares for $66 USD (at the time of writing).
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Give a Share
The bigger company is Give a Share.
They have over 110 stocks that you can choose from and share the top 10 stock gifts.
Some of the more popular ones are Disney, Nike, and Apple stock. They can even custom frame your physical share for you for an added fee (though I found this more expensive than the other company). I found the individual stock prices to be higher than Unique Stock Gift but their website is a better design and they seem more legit.
Give A Share states their prices are much more economical than if you were to go through a brokerage for the physical stock certificate. Brokerages charge a $500 fee because the U.S. Depository Trust Company (DTC) charges this fee to brokerages. This is to discourage the use of paper stocks and to transition everything to electronic format.
They have a collectible Disney Share Certificate and it’s an extra $50 just for the collectible item. It’s so pretty!
Give the Gift of Compounding and Growth
If you would rather not give a physical stock certificate, there are ways to give the gift of investing without having to worry about if a certificate gets stolen or wrinkled or damaged.
Stockpile
Stockpile– This is a US based brokerage that lets you buy FRACTIONAL shares of stock and also only charges $0.99 a trade (this makes Questrade look very expensive at $4.95 a trade). They claim to be the only brokerage that allows you to give the gift of stock and you don’t need to have an account to give a gift. They have easy denominations, like $25 worth or $50 worth of stock. There are over 1000 companies to choose from and you can give up to $2000 worth. Stockpile acquired another similar company, called SparkGift.
Wealthsimple
Wealthsimple, a robo-advisor that is available in both Canada and the United States, announced in Fall 2017 that you can start buying gift cards. In Canada, you can buy Wealthsimple gift cards and your loved ones can redeem it in their RRSP, RESP, and non-registered portfolios. Just not in the TFSA portfolio.
In the US, it seems like their gift card section is on hold but if you have received one you can still redeem it.
I think this is a great idea if you know someone with a Wealthsimple account, what way to encourage investing than providing capital for your loved one? This is a great gift idea for grandparents to help with their grandchildren’s RESP accounts (or of course can just gift cash to make it easier). I say this because if you over-contribute the maximum of $50,000 in the RESP (for example, both the parents and grandparents are contributing to the RESP and then they lose track of how much has been contributed) then you can get in trouble.
Alternately you could just contribute to your child’s RESP in the form of a contribution.
Getting a Physical Stock Certificate from your Brokerage
You can also get a physical stock certificate from your brokerage to give a share of stock as a gift. There are fees for this, with US stocks having a $500 fee to obtain a stock certificate.
It seems to obtain a physical stock certificate for Canadian stocks, it is more reasonable, somewhere around the ballpark of $50.
The company has to NOT be DRS (Direct Registration System) registered. You can check out this TD investing FAQ here.
There we go, this is how to give the gift of stock! A fantastic gift, might I add, because it usually appreciates instead of depreciates in value.
You may also be interested in:
- RESP contribution limit
- Justwealth vs Wealthsimple RESP
- Baby Samples for New Moms
- Birthday Freebies for Kids
- Canada Child Benefit Amount
Readers, have you ever given the gift of stock?
As a stocking stuffer? (pun intended!)
GYM is a 30 something millennial interested in achieving financial freedom through disciplined saving, dividend and ETF investing, and living a minimalist lifestyle. Before you go, check out my recommendations page of financial tools I use to save and invest money. Don’t forget to subscribe for blog updates, a free dividend yield spreadsheet, and the free Young Money Bootcamp eCourse.
When our dad died my brother and I each inherited paper certificates for 400 shares of Walmart stock. He had spent $1,000 years before to buy the 800 shares that were now worth $80,000. I sold mine right away, because I don’t hold individual stocks and my brother kept his for sentimental reasons. It was the only time I’ve actually seen paper stock certificates.
@Steveeark- Sorry about your dad dying. What a great gift from your dad. My eyes went very wide when I read that you had 400 paper certificates of Walmart that were bought for $100 and now worth $80K. Amazing. I would be terrified of losing the paper certificates and would want them kept in a safety deposit box lol. This is the first time we saw a paper certificate too- they are so pretty!
Giving stocks to your kids to encourage them to invest early is a great idea. For now, I am a bit lazy, I just open a brokerage account and contribute the $2,500/child to get the maximum RESP grant. When they are old enough, I will show them what they own.
In the mean time, I just gave my kids a piggy bank and give them actual money to put in. Whenever they want me to buy something, I will ask them how much they have in their piggy bank. It gets them to think before they spend their money.
@Leo- Awe so cute! Do they regularly count what they have in their piggy bank? That’s a good idea. My baby can’t talk yet but I will make sure to ask him/them that question if they want something.
They don’t count it very often, but every time I give them my change, I tell them the value of the coins and the animals on the coin. My son knows his coins now and the bills. Now I just have to find new ways to further brainwash him lol.
@Leo-That’s cute! The polar bear is worth more than the beaver!
It is a great idea GYM. I see little downside to it and that share can be worth a lot some day! Tom
@Tom- Yes, like in Stevark’s experience!! Or the company could go down, depending on the company purchased (e.g. Netflix was a physical share option I believe). Like, I don’t know if Netflix will be here still in 50 years.
Hi GYM, I think that’s a great idea buying one physical share of Berkshire Hathaway (BRK.B) for your kid’s 1st birthday. So, from early on, your kid will have the ideas about stocks, and who Warren Buffett and Charlie Munger are.
@Helen- We hope so! Right now, he points to Warren Buffett on a t-shirt we have and says “Dada” lol.
That’s really a cool story, GYM.
Hey this is a great idea!! I have heard of giving a stock as a gift for a child but never knew about the a certificate, what a cool concept from Berkshire Hathaway.
One idea I wanted to do for a future birthday party for BwC is have all the guests to contribute to his college fund rather than providing physical gifts. It would taking away the clutter from all the gifts and plus it adds to his 529(college) account.
@Kris- That’s a good idea 🙂 I heard from another mom friend that the trend (well in Canada anyway) is a “Toonie party” where everyone who comes brings a $2 coin instead of a gift. I am totally doing this for baby GYM once he has a bday party!
This is such an ideal gift and very practical. Rather than giving material gifts, this will be much appreciated being a long term thing.
@Jamie Cordon- Definitely!
Thank you for this! We wanted to give our niece some stock for her birthday to start laying some financial literacy foundation. She already has plenty of toys, and I reasoned with the Mrs. that our niece wouldn’t miss one less toy. I couldn’t find a good way to do this though.
I had checked out Stockpile, but at the time they charged a fee for the gift card and a fee for the trade, which felt steep for a relatively small denomination. I don’t know if they still do this, but will check them out Abdullah as well as these other options!
@Jay- Great, glad you enjoyed this post! That’s what we thought too, don’t need toys, but a nice framed stock would be nice.
Hi,
I am the founder of http://www.GiveAshare.com , thanks for mentioning us. Yes it is true, my mom bought me a few shares of Topps Chewing Gum Inc. when I was a teenager, a looooooong time ago. She framed the stock certificate and gave it to me. I was not the most studious kid so she had to figure out a clever way to get my attention. She did and it changed my life! My wife and I had been giving stock gifts to friends and family for years but it was a huge hassle so in 2002, we founded GiveAshare.com to make it really easy for parents and grandparents to replicate my experience for their kids. The response has been overwhelming. The paper stock certificate is an essential attention-getter and can ultimately become a collectible as more companies move to electronic ownership. Anyway, each mailing from THEIR company becomes a learning opportunity. The most important aspect is to choose a company the child loves – this is more important than whether it is a good investment. If you don’t get their attention, no learning can take place. Thank you for letting people know about us.
Sincerely
Rick
@Rick- Thanks for visiting and creating Give a Share, I am a big fan. We having a second one coming soon and for our 2nd’s first birthday we will do the same. A perfect minimalist gift.
Second to this, and Wow!
Thank you GYM for putting this together and Thank you Rick for for making this possible ?
My baby is turning 1 soon and I am following your lead. I am also spreading the word around! I came to Canada as an immigrant with zero financial literacy on Canadian banking system. I had dreamt to own a physical share when I was a little kid, and I am hoping to influence my kids and our community on financial pathways.
@Charm0021- Thank you for sharing, and happy birthday to your baby! Your baby is very lucky to have a financially educated parent like you.