How to Buy Your Child Their First Stock

What if, instead of buying your child another toy or video game, you bought them something that could grow in value and set them up for financial success? That’s exactly what happens when you buy your child their first stock!

✅ Investing early helps money grow over time. 📈
✅ Kids learn real-world financial skills. 💰
✅ Stock ownership teaches patience and long-term thinking. 🏦
✅ The earlier they start, the wealthier they’ll become. 🚀

In this guide, we’ll walk you through how to buy your child’s first stock, from choosing the right investment to setting up an account and tracking their progress.

Step 1: Explain Stocks in a Fun, Simple Way

Before buying a stock, it’s important that kids understand what stocks are and how they work.

1. Stocks = Owning Part of a Company

A stock represents ownership in a company. When you buy a stock, you become a shareholder, which means you own a small piece of that business.

📍 Example:

• If you buy 1 share of Disney, you own part of Disney!

• When Disney makes money from movies, theme parks, and toys, its stock price goes up.

• If you sell your stock at a higher price later, you make a profit!

💡 Lesson for Kids:

• "Owning stocks means you own part of your favorite companies!"

2. Stocks Make Money in Two Ways

✅ 1. Stock Prices Go Up (Capital Gains)

• If you buy a stock for $50 and sell it for $75, you made a $25 profit.

✅ 2. Some Companies Pay You Money (Dividends)

• Some companies share their profits by paying dividends to stockholders.

• If you own 10 shares of McDonald's, and they pay $1 per share in dividends, you earn $10 per year just for owning the stock!

📍 Example Activity:

• Ask kids: "Would you rather spend $50 on a toy today or buy $50 of Apple stock and watch it grow?"

💡 Lesson for Kids:

• "Investing helps your money work for you!"

Step 2: Choose the Right Stock for Your Child

Now that your child understands what a stock is, it’s time to pick their first stock!

1. Let Your Child Invest in What They Love

The best way to get kids excited about investing is to buy stocks in companies they already know and love.

✅ Does your child love Disney? 🎬 → Buy Disney stock (DIS)!
✅ Do they wear Nike sneakers? 👟 → Buy Nike stock (NKE)!
✅ Do they watch Netflix shows? 📺 → Buy Netflix stock (NFLX)!

📍 Example Activity:

• Sit down with your child and list their favorite brands.

• Look up their stock prices together and compare how they’ve grown over time.

💡 Lesson for Kids:

• "If you love a company, you can own part of it!"

2. Check the Stock’s Performance

Before buying a stock, look at:

📈 Stock Price History – Is the stock going up over time?
📊 Company Strength – Is it a big, well-known company?
💰 Dividends – Does the company pay you money for owning shares?

📍 Example:

• Apple’s stock price was $1 in 1980, and today it’s over $150!

💡 Lesson for Kids:

• "Long-term investing is how you grow wealth!"

Step 3: Set Up a Stock Account for Your Child

To buy stocks, your child needs a brokerage account.

1. Choose a Custodial Account

Parents can open a custodial brokerage account for their child. This means you control the account until your child turns 18 or 21 (depending on your state).

🔹 Best Brokers for Kids:

• Fidelity Youth Account – No fees, easy to use.

• Charles Schwab Custodial Account – Great for long-term investing.

• Stockpile – Allows kids to buy fractional shares (small pieces of stocks).

📍 Example Activity:

• Let kids help set up the account and pick their first stock!

💡 Lesson for Kids:

• "This is your investment account—your money grows here!"

2. Fund the Account and Buy the Stock

Once the account is set up:

1️⃣ Deposit money (start with $50 or $100).
2️⃣ Search for the stock (ex: “AAPL” for Apple).
3️⃣ Select the number of shares (or buy a fractional share).
4️⃣ Click ‘Buy’ and celebrate their first investment!

📍 Example:

• A $100 investment in Nike stock could grow to $500+ over time.

💡 Lesson for Kids:

• "Investing is easy and exciting!"

Step 4: Track Their Stock and Watch It Grow

Now that your child owns stock, make it a learning experience!

✅ Check the stock price weekly to see how it moves.
✅ Read company news and discuss why stock prices change.
✅ Reinvest dividends to buy more shares automatically.

📍 Example Activity:

• Make a stock market journal where kids write down price changes each month.

💡 Lesson for Kids:

• "The longer you keep stocks, the more money they make!"

Step 5: Keep Investing and Growing Their Portfolio

1. Set a Goal for Their Investments

✅ Save for college? Invest in safe, growing stocks.
✅ Buy their first car? Invest in strong companies.
✅ Become a millionaire? Keep investing every month!

📍 Example:

• If a child invests $50/month from age 10 to 60, they could have over $1.2 million!

💡 Lesson for Kids:

• "Investing regularly builds wealth over time!"

Conclusion: Give Your Child the Gift of Financial Freedom!

By buying your child their first stock, they will:
✅ Learn how businesses grow and make money.
✅ Develop smart financial habits early.
✅ Build long-term wealth and financial security.
✅ Experience the power of ownership and investing.

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