March 30, 2022

Should I buy my children stock?

Onu ABCs

Investing can feel intimidating, but we're here to simplify it a bit. Your investing journey starts today!

If you’re reading this, you’re probably thinking about buying stock for your or a friend’s child. If you read nothing else, here are a few reasons why it might be a great idea:

  1. Kids have a long time horizon before they’ll need the money, and compound growth can build a healthy nest egg.
  2. Education! Financial literacy is severely lacking in the US. Teaching kids how to fish while fishing simultaneously is a huge win-win.
  3. Reduce waste. We spend a lot of money on toys every year, and few captivate their attention for more than a few minutes. Try a gift that can keep on giving.

Why Invest for Kids?

Beyond cutting down on clutter around the house, purchasing stocks, bonds, ETFs, and crypto for your children during the holiday season has myriad benefits.

Teach Kids Financial Literacy and Investing Skills

Investing for kids is a great learning opportunity for them. Having a child interested in investing starts building a foundation of curiosity for them and builds confidence when speaking about money. This will make them better investors and better negotiators when entering the workforce.

For many adults, investing creates anxiety which prevents them from getting their extra money working for them. When you wait too long to invest, you put off the power of compounding interest that could help fuel a more comfortable retirement.

So get talking and learn together! Sit down with your child to discuss the investments you purchased or that friend or your auntie bought for them. You’ll want to talk about the importance of letting the money grow untouched. How to choose securities and how simple changes and sacrifices, like holding off on a new video game and investing that money instead, could one day help pay for a house.

Harness the Power of Long Investing Timelines

By investing early, the children in your life can take advantage of compound growth. Small investments today can snowball into serious money later in life. Play with a compound interest calculator to get a sense of how the numbers could add up over time.

Should You Buy Your Child Stocks?

We may be a bit biased here, but we think YES! Set aside some of that Christmas allowance for stocks, and get friends and family to invest alongside you. There is no greater calling than creating a secure future for your children. You can build a legacy with as little as $10. The important thing is to get started today. Don’t let the “perfect” get in the way of the “good enough.” You and your children will have plenty of time to figure out the rest.

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This information is educational, and is not an offer to sell or a solicitation of an offer to buy any security. This information is not a recommendation to buy, hold, or sell an investment or financial product, or take any action. This information is neither individualized nor a research report, and must not serve as the basis for any investment decision. All investments involve risk, including the possible loss of capital. Past performance does not guarantee future results or returns. Before making decisions with legal, tax, or accounting effects, you should consult appropriate professionals.