Making The Most Of Your Money

Gifting Portfolio Options: What To Know For That Teen In Your Life

10 January 2020 by Glen Robinson

If you have a celebration coming up for someone who is going through a milestone while becoming a young adult, like confirmation, a bar or a bat mitzvah, graduation, or other important celebratory event, there are several gift ideas to consider. You want to give them a gift that is better than cash or an item that they won't remember; instead, you want to give them something that can teach them about money and investing in the future.

Instead of cash, you should add or start their portfolio so that the money you invest has increased when they are ready to use it. Here are some of the gift options that are popular and that should be considered.

Invest in a CD

When you give the gift of a CD, you are giving someone a gift that will have a return on the money that you originally invested so they will get more money than you originally put down. They can see the deposit through the maturity of the investment, and then take that larger sum and invest it. Look at options with financial institutions in your area to see their CD interest rates and to see what amount you want to put into a CD.

Explore Stock Options

Low-risk stock options that will retain their value or that have the potential to increase are a solid addition to any portfolio. Talk with your stock broker or one in your area about the different stocks that have historically held their value or about any new companies that are going public and are worth investing in for the future.

Buy Mutual Funds

If you have a financial institution that you already trust and use, some mutual funds can be a solid investment, and you can gift the young adult the funds. The funds can be cashed out when needed and at a time when the funds have a high value.

If the person is a minor, you may have to work with the parent to get the right accounts set up and to make sure that everything is set to go into their portfolio appropriately. You want to be sure that whatever financial investment you make will be handled responsibly and will be something that they are able to use in the future when they are ready to go to college, start their life, or build on that investment that you gave them.  

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