The Greatest Christmas Gift For An 8 Year old….Her First Online Trading Account

The Greatest Christmas Gift For An 8 Year old….Her First Online Trading Account

December 11, 2018 0 By JD

I’ll be honest, I struggle with Christmas!  It’s not that I’m a scrooge and can’t embrace the Christmas Spirit, it’s not, I’m good with that.  It’s just the overbearing guilt of knowing we have so much, when there are hundreds thousands of families who wake up Christmas morning like every other day, just hoping there’s enough in the cabinet to feed their family.   It’s not as if we don’t try to do our part by helping out local food banks, Churches, the Jaycees, the Ronald McDonald House, and the random needy person/s we cross paths with.  It’s just that there is so much need out there, that unfortunately we can never do enough.

This need causes us to reflect on the important things in life, which I got news for you retailers, it’s not your well-marketed consumer rubbish!  It’s family, it’s faith, and our families future.  Oh, that’s why this year is going to be different, this year were are investing in our 8 year old’s future, with a gift of substance.

Forget the Moana Adventure doll, the bath bomb, or the Skuut Wooden Balance Bike.  These are merely short-term gratification consumer products, which in reality, would be collecting dust by January 1st.  So, as a show of the proverbial ‘middle finger’ to said retailers, we’re setting up an online trading account for our daughter.

A Custodial Account from Etrade

will be my contribution to that weaved sock which eloquently hangs from the mantle during the Christmas Season.  You see, its time.  Its time for me to introduce the world of equity investing, and Dollar Cost Averaging to my 8 year old.  Time is passing her by, I really should have started this 4 years ago.  So, In order for her to completely grasp the subject and appreciate investing, she needs to have her own ‘stash’.

This gift has the opportunity to be life-changing, even if we only fund it with one measly share of Apple.  Because,

If my parents had done this when I was 8

I’d be…..Retired?  Nah, I’d be doing this same thing, only with a bigger microphone, and maybe a bit more ‘street cred’.  I would have probably been stopping people at the gas station, or in line for the restroom at a sporting event, (Ok that may be a little weird, but you get the drift) and preaching the benefits of Dollar Cost Averaging and starting early.  And, I’ll bet I would have helped a few of them become millionaires.

I’ve become enamored with my Etrade Online Trading Platform.  I’m a little hard-headed, but I’ve finally figured out the importance of paying myself first, and I certainly don’t want my daughter taking the same 47 years I did, to figure it out.

Yea, so I’ve opened an account, now what?

Find a stock, mutual fund, ETF or two or three, and buy as many shares as you can afford.  Perhaps consider companies your child is familiar with, such as: Apple, Hasbro, Mattel, Electronic Arts, Google, Amazon, etc,etc.  Add a share or two the next time your child has a birthday, or for Christmas, straight A’s on their report card, and especially for serving in the community.  I urge you to buy stocks with a consistent history of good management, preferably dividend paying stocks, and those who have weathered the historical ups and downs in the overall market.  Websites like and do a great job of helping the novice investor understand a companies management philosophy.

But, what happens if the market tanks?

That’s ok, your child’s timeframe is rather long and can withstand a few corrections.  Not to mention you and your child are not traders, so timing the market is of no interest to you.  If you’ve bought companies with a long history of returning shareholder value, which is what I recommend, then celebrate.  Celebrate by buying more shares, they’re on sale!  Remember, a market correction does happen from time to time, even in a healthy economy!  What is critical to have is a long-term outlook and a commitment to staying the course, without it, then you’re simply a trader.

Starting a custodian account for your child will have lasting benefits.  Not only will it start them out on a path to financial independence at an early age, but it will create a bond between you and your child.

Earnings, PE’s and, Beta, Oh My!

Your child will learn patience, delayed gratification, and the ability to rationalize good value.  Make a game out of it, pretend your child is the CEO, ask them what they would do to reduce debt, and increase profitability, and return more value to the shareholders.  Remember it’s not about the money, it is soooo not!  Its all about the life lesson and the potential impact in their future.

While we can’t solve all of societies challenges, we can do our part when we’re called.  Leave a big tip for the struggling single mother waiting tables.  Pay for the order of the car behind you in the drive through.  Find the neediest case at your child’s school and leave an anonymous gift certificate with the principal to give to that child.  These are where we can make an impact.

Make a difference, pay it forward.  An online trading account is the farthest thing from many of these kids minds.  Survival; now that is much more enticing.

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