Stocks are a perfect wedding present for a daughter or son. Gifting your children with stocks will help in securing their financial future. Owning stocks in different companies secure your savings from inflation and taxes.
1. Stock Dividends
Dividend stocks earn an income that gets distributed among the shareholders on a pre-agreed schedule. When you gift your children with this type of stock, you ensure that they can get a steady income source. The dividends get used to reinvest in the stock market. The advantage of having a dividend stock is that you still own the shares that you have in the company.
When you are planning to gift your children with shares, you need to know if the company offers dividends, and this to help you know how frequently the dividends will reach your children. The point of this is that not all companies offer their shareholders dividends.
2. Liquid Assets
When you gift your children shares for their wedding, you give them a form of a liquid asset. These liquid assets show that the investment you have given them will not be tied down, and they can access them at any time if there is an emergency. The advantage of the liquidity is that the stocks can be sold on the same day they have been acquired.
3. Limited Liability
When you are gifting your son or daughter a present for their wedding, stocks are the best option. Even if the wedding is Feng Shui, the stocks present will stand out and be the best gift. When you gift a stock option, you are helping your children to be part of a company and, at the same time, stay away from the daily running of the business. This reduces their liability. If the stock option goes down or the company becomes liable in one way or another, the investors get protected from harm.
4. Price Increase
When you have stock in a good company, you rest assured that your stock value will increase. The advantage of the stock price increasing is that you have the option to sell your stock and make a substantial profit that you may opt to reinvest. The stock price increase will help build your portfolio and ensure that the shares you own are many.
Stock appreciates if the economy is stable and the economy is growing. If the economy is growing, company revenues will increase, which will increase the value of the shares. The more money the company makes, the more money the shareholders get.
When you have stocks in a company that is doing well and the stock price is attractive, you will find that other companies would prefer to buy out the stocks, which will help the stock price. During a buyout, the acquiring company will put a premium on the stock’s total value, which will increase the price of the share. This increase in the share value will make the wedding gift appreciate in time and be the best gift for your children.
6. Making Money Both Ways
When you gift your children with shares as a wedding gift, you have given them the option to make money in more than one front. When you have shares, you may opt to trade in them regularly. When trading in shares, you buy low and sell high, depending on the stock pricing trend. When trading with stock, you have to ensure that you understand the market’s flow, and this is to avoid losses. The other way that the shares make money is through dividends or selling at a profit.
Before you gift your son and daughter the shares as a wedding gift, you need to know if they are conversant with the stock market. It is paramount to find time before the wedding and train your child on how the stock market operates to ensure that the investment you have gifted them is well managed. It is very sad to gift the shares to your son or daughter, then they misuse them or dispose of them with no regard to the shares’ future potential. When you train them, you need to instruct them to get the necessary market information from magazines and publications. Another factor that you need to consider is that you can employ a manager to handle the shares.
Article Submitted By Community Writer