Kids First

Is Oneshare.com a good way to start educating my children about investing?
– C. Newsom-Broughton, Via the Internet
The good news:
“You can avoid almost all of that, or minimize it, with very simple strategies,” says Pritchett. For instance, if an account holder names her individual children as beneficiaries, those children can use a “stretch IRA” arrangement. This allows them to withdraw funds over the course of their lives. The type of IRA one chooses can also help limit taxes, Pritchett adds. For example, the assets of Roth IRAs can be passed on to the next generation tax-free.

Oneshare.com, which sells framed stock certificates, may be a good way to introduce the concept of stocks to a young child; however this approach falls short for an older child or teenager. Consider the site a way to begin a dialogue with your kids, but be sure to go further and use other resources to explain investing more fully.

The site allows you to buy a framed stock certificate of select publicly traded companies as a gift. The idea of a plaque to add a visual, personal connection to a company your child likes is great, but at $39, plus the cost of the stock as listed on the stock exchange, it may be a rather expensive way to get your point across.

Around the country there are programs that aim to introduce children to money and investing. As kids get older, and parents want to concretely demonstrate how investing pays off, it might help to set up an account on ShareBuilder.com, a Website that caters to both beginning and experienced investors.

This site doesn’t require a minimum account balance and has an automatic investment strategy that allows users to buy partial shares of stock. Consider using a custodial account — which you manage on behalf of your child — to become active with your children in learning about investing.

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