![]() In other words, you may start out with great intentions of teaching a child about investing and wind up having the money spent on video games. But you'll never know if that's what happens, which could set up all kinds of awkward conversations down the line if you try to talk about the company. For minors this requires parental approval, so at least there's some safeguard against youthful exuberance. They can also sidestep the whole thing and switch the card out for a card to their favorite retailer. Once a brokerage account is open, the recipient can buy whatever stocks Stockpile offers (the list is limited, though large enough for most small investors). These cards are really just gift cards that have a $25 cash value (or whatever amount you decide to give). I've been putting the word "stock" in quotes for a reason. The bigger problem is that they don't have to buy stock at all. That's not a bad thing, unless you had your mind set on a specific stock. They can buy a number of different stocks. You need to really consider this before you buy a card - can the person you are sending the gift to (or their parents) handle this step?Īnother wrinkle is that they don't have to buy Berkshire if they don't want to. So the person who gets the gift has to open a brokerage account to use it to get that $25 piece of Berkshire Hathaway you were so excited to give. But Stockpile is actually handling the stock side of things through a registered broker dealer, Stockpile Investments, Inc. On that front, it's easy for you, anyway. As you might guess, I'm not fan of that type of gift card, either, since I'm essentially paying $55 for the privilege of giving someone $50-I'll just write a check, thanks.īeyond cost, you'll also want to think about just how easy a Stockpile "stock" gift card is. the Visa gift card is worth $50, but you'll have to pay $5 or so to buy it. In many ways it's similar to buying a Visa gift card at a store. To be fair, the fees being charged are covering more than just trading costs, since Stockpile has to pay for all of the infrastructure that supports its business. ![]() ![]() True, you might need more than $25 to open an account for Junior and there are likely to be more headaches involved in the process, but I'd be loath to pay what amounts to a trading commission of that scale for anything. That's a huge cost, particularly when some brokers are willing to give away free trades for new business. Give the gift online and the cost falls to around $3.75, an almost 15% "commission." That's a very positive way of framing what amounts to a nearly 20% "commission" on a $25 gift card. The idea is that, as the gift giver, you are taking on all the costs for the gift, like trading commissions, so the recipient won't have any impediment to their stock ownership. Online at Stockpile's website you can get a card for $2.99 plus 3% of the card value. Only the reality of the fine print tarnishes the idea.įirst off, according to the Journal, that $25 gift card will cost you $4.95 to buy in the store (a $50 card costs $6.95 and the $100 version will cost you $7.95). A Stockpile gift card hits right at that desire. Maybe you wish someone had done that for you - or, if you were lucky, maybe someone did. How wonderful would it be to buy your grandchild just a little bit of Berkshire Hathaway? Set the kid off on the right foot, get them started in investing early. And there are larger cards, too, if you are feeling more generous. The word "stock" and the name of the company are emblazoned across the card, so you know what you are getting (and don't mix one of these cards up with, say, a $25 gift card to eat at Chipotle). A customer can then pick up a $25 gift card for IBM ( IBM) or Disney ( DIS) or even Berkshire Hathaway ( BRK.B). The company sells "stock" gift cards in local retailers like a grocery or office supply store. In the end, I found that the idea sounds great but there are so many drawbacks that I think most should avoid Stockpile's "stock" gift cards. So when I read in The Wall Street Journal about stock "gift" cards being offered by a new company called Stockpile, I just had to find out more. I love learning about new ideas and I love finance.
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