Giving stock as a gift - Calgarypuck Forums - The Unofficial Calgary Flames Fan Community

ken0042 · 10-05-2011, 12:31 PM

Just wondering if anybody has done this before? I will be my nefew's godfather this weekend, and I am thinking an appropriate gift would be something that will be useful to him in the future. He is a little too young to appreciate the standard "hookers & blow."

I was looking at Onestock - but the markup is HUGE and makes me wonder if I should just get him some land on the moon if this is really a gag gift.

The stock I was thinking of was Disney; and Disney does have a purchase plan for $250. I was planning on spending closer to $100; but if buying direct is better I would rather do that.

What do you guys think?

VladtheImpaler · 10-05-2011, 12:35 PM

Buy him a share of Berkshire. Don't be cheap.

Hockeyguy15 · 10-05-2011, 12:57 PM

Socks are for sure an appropriate gift, I always get some at Christmas and it's great since I never have to buy my own.

Madman · 10-05-2011, 01:20 PM

Do they have a big enough yard? A cow is a pretty big investment.

Komskies · 10-05-2011, 01:22 PM

Quote:

Originally Posted by ken0042

Just wondering if anybody has done this before? I will be my nefew's godfather this weekend, and I am thinking an appropriate gift would be something that will be useful to him in the future. He is a little too young to appreciate the standard "hookers & blow."

I was looking at Onestock - but the markup is HUGE and makes me wonder if I should just get him some land on the moon if this is really a gag gift.

The stock I was thinking of was Disney; and Disney does have a purchase plan for $250. I was planning on spending closer to $100; but if buying direct is better I would rather do that.

What do you guys think?

I think it's a fantastic idea. Back when my brother and I were little guys our Uncle bought us some Telus stock. I don't remember the occasion but it was a really cool gift.

ken0042 · 10-05-2011, 01:36 PM

Sorry, I guess I should clarify what I am asking for.

How would you go about buying this stock? Or for those of you who received it as a gift; how did you receive it? Was it from a site like onestock.com, was it direct from the company (like how Disney does it), or was it from a bank or brokerage?

Lobotroth · 10-05-2011, 01:38 PM

Chicken stock is best.

bizaro86 · 10-05-2011, 01:43 PM

Quote:

Originally Posted by ken0042

Sorry, I guess I should clarify what I am asking for.

How would you go about buying this stock? Or for those of you who received it as a gift; how did you receive it? Was it from a site like onestock.com, was it direct from the company (like how Disney does it), or was it from a bank or brokerage?

You can withdraw stock certificates from a brokerage account (mine charges $50). This isn't a great deal if you only want to do it once. If one share of Disney is the new regular "uncle ken0042 gift" it might be worth it, as you should be able to buy a bunch of shares, and have one certificate sent to you. Then the transfer agent will typically transfer shares to new owners for free, so you could get 10 certificates in 10 different names if you wanted.

More info here: http://www.dripprimer.ca/groupbuy It's pitched to a different audience, but it's exactly the same concept.

Slava · 10-05-2011, 01:49 PM

It can be done, without question. There are a few things that you should consider though:

A) Tax implications. The shares would be purchased in your name (presumably) and held in a trust account for the child (either formally or informally) most likely by the parents? If you gift stock and there are gains though the tax could still flow to you for this....its all about tax attribution.

B) You could consider an RESP. This gets a little more complex in terms of stock. I can't actually refer you to a provider who can hold stock in RESPs, although presumably they exist. I have heard rumours of one coming around later this year that I know of.

Huntingwhale · 10-05-2011, 01:55 PM

Give it to your children, then point and laugh when they cry!

ken0042 · 10-05-2011, 02:02 PM

Quote:

Originally Posted by Slava

A) Tax implications. The shares would be purchased in your name (presumably) and held in a trust account for the child (either formally or informally) most likely by the parents? If you gift stock and there are gains though the tax could still flow to you for this....its all about tax attribution.

I guess my thinking is that given the amount of the investment (in the $100's) and the fact that he will be my godson, if I have to pay $20-30 per year in tax; I am not all that worried. The intent here is to give him something cool (being able to say he is a part owner in Disney); and also something that can be used in the future for his education.

And bizaro- paying $50 for the certificate isn't bad. The onestock people want $40; and I still question if that stock is legitimate or not. There's no point in doing this if he can't cash it in at some point.

bizaro86 · 10-05-2011, 02:05 PM

Quote:

Originally Posted by Slava

It can be done, without question. There are a few things that you should consider though:

A) Tax implications. The shares would be purchased in your name (presumably) and held in a trust account for the child (either formally or informally) most likely by the parents? If you gift stock and there are gains though the tax could still flow to you for this....its all about tax attribution.

B) You could consider an RESP. This gets a little more complex in terms of stock. I can't actually refer you to a provider who can hold stock in RESPs, although presumably they exist. I have heard rumours of one coming around later this year that I know of.

A) If you give one share of Disney to a kid and they hold it for 20 years, I wouldn't worry about the tax ramifications, personally

B) I'm pretty sure any discount broker would open up a self-directed RESP, which you could use to buy stock. Be careful here, as there may be account administration fees for low dollar amounts. Maybe ask the parents if they're thinking of doing this anyway, and contribute $100 to get it started off. Big plus here is the gov't matching funds.

firebug · 10-05-2011, 02:14 PM

The issue is is if you are wanting this to be an investment or not.

Buying a single share of nearly any company (with a few notable exceptions) is not going to be worthwhile due to the frictional costs of transacting a single share will be far greater than any potential gain in value.

For your budget, a piece of memorabilia is far likely to hold or increase in value plus has much lower frictional cost than a share cert. Plus it will likely have greater sentimental value as well.

GP_Matt · 10-05-2011, 02:16 PM

I went the OneStock route to buy a Disney Share quite a few years ago (10 maybe) as a gift for the GF. She got the actual certificate (Disney stock has all the characters on their certificate). She gets a dividend cheque occasionally and an invitation to the annual meetings so I assume it is legit.
I also bought a single share of TD for a Godson two years ago. For that I went through my broker and bought a single share and had it registered in his name. They didn't really charge me much for that, maybe $25 plus the share price, I suppose I pay him enough already. It took a bit of work, but I had the share registered and setup for the DRIP program and a SPP so that now anyone can buy him more stock commission free direct from TD's broker. You can't set that up with every company but there is a list out there somewhere.

Slava · 10-05-2011, 03:26 PM

Quote:

Originally Posted by ken0042

I guess my thinking is that given the amount of the investment (in the $100's) and the fact that he will be my godson, if I have to pay $20-30 per year in tax; I am not all that worried. The intent here is to give him something cool (being able to say he is a part owner in Disney); and also something that can be used in the future for his education.

And bizaro- paying $50 for the certificate isn't bad. The onestock people want $40; and I still question if that stock is legitimate or not. There's no point in doing this if he can't cash it in at some point.

Quote:

Originally Posted by bizaro86

A) If you give one share of Disney to a kid and they hold it for 20 years, I wouldn't worry about the tax ramifications, personally

B) I'm pretty sure any discount broker would open up a self-directed RESP, which you could use to buy stock. Be careful here, as there may be account administration fees for low dollar amounts. Maybe ask the parents if they're thinking of doing this anyway, and contribute $100 to get it started off. Big plus here is the gov't matching funds.

I wasn't trying to convince to do anything else or anything. Just pointing this out for informations sake for the most part. The RESP would be the best because in Alberta you get the 20% federal grant and the province gives you $500 as well, so for $100 you have an account at $620....

Wormius · 10-05-2011, 03:32 PM

Have you considered something like a bottle of a good wine or liquor that will age well, and increase in value or at least be pretty tasty by the time he/she turns the legal drinking age.

chalms04 · 10-05-2011, 03:43 PM

I would recommend a donation to the the Human Fund.

bizaro86 · 10-05-2011, 03:46 PM

Quote:

Originally Posted by Slava

I wasn't trying to convince to do anything else or anything. Just pointing this out for informations sake for the most part. The RESP would be the best because in Alberta you get the 20% federal grant and the province gives you $500 as well, so for $100 you have an account at $620....

For sure, sorry if that came across as criticism, wasn't intended that way.

An RESP is a great idea if the goal is to help with education, since you'll get the most bang for your buck. Stock in a RESP is a little tougher, (than say a mutual fund) which means you lose some of the "framed Disney share coolness factor." Depends on which is more important to you.

ken0042 · 10-05-2011, 03:58 PM

Quote:

Originally Posted by bizaro86

which means you lose some of the "framed Disney share coolness factor." Depends on which is more important to you.

That is definitely part of it. He is 18 months now, so at some level within a couple of years he will "get" that he is part owner in Disney. So that is worth something to me.

THE SCUD · 10-05-2011, 04:14 PM

I think the cost of one share and the related printing/acquisiton costs will make the actual share of little value. For instance, my broker charges nearly $100 to process and import a certificate. So you're going to have costs to both print and recieve a cert, as well as 'cash it in'.

I like the idea (and may copy it some day), but not as a "value for the future" but as a "holy shart I am 5 and own some of Disney I am gonig to tell all my friends my uncle bought me part of Disney" angle.

In short:

Purely financial Gift: RESP contribution

Awesome Uncle Gift: Framed share of Disney. Tell the parent's it's worth $$, but tell the kid HE FUNKING OWNS DISNEY.