Financial Gifts That Don’t Cost an Arm and a Leg
It’s that time of year again, when consumers young and old start hitting the malls and catalogues for the perfect holiday gifts.
If you’re searching for something that could pay both real and educational dividends, you should know that there are literally dozens of inexpensive financial gifts--from calendars and cups to stocks. Here are a few to consider:
* Prepaid phone cards: A perfect gift for a college student who never seems to have a dime to call home. Prepaid phone cards are little plastic “debit” cards--something like an ATM card. You decide, in advance, the amount of money to load on the card; the cardholder can then make calls against the card’s value until the card runs out of cash. These cards are sold by every major long-distance carrier, as well as most regional telephone companies, many banks and a variety of retailers. Indeed, the post office recently announced it would be offering a prepaid phone card too. They can be purchased in denominations as low as $5 to more than $100. And some are attractive--potential collector’s items.
* Parent/grandparent bank: Every year you give the grandchildren money, thinking they’ll save some of it for college, and every year they blow the cash on some frivolous toy that’s forgotten in a matter of weeks. Now you’re wishing that there was some way to force them to save--or least teach them something about money while they’re spending.
Consider supplementing your cash gift with a “parent bank.” What’s a parent bank? It’s a cloth wallet, with a check book, check register and mini-calculator, which retails for $14.95 and is available at many major toy stores. The way it works is the parents (or grandparents) hold the money; when the kids want to buy something, they write a check, present it to the appropriate relative and the guardian disburses the funds. It’s no panacea, but at least you’ll get a chance to talk to the kids about what they’re buying before the money’s gone.
* Savings bonds: A perennial favorite for those wanting to give a cash gift that pays interest. But you should know that savings bonds aren’t the deal they used to be. Last May, the government did away with guaranteed interest rates on newly purchased bonds. Now your rate “floats” at a rate somewhat below comparable market interest rates. The floating rate makes it nearly impossible to know when the bond matures--reaches its face value--and the interest rate is never a bargain. Nonetheless, they’re inexpensive. A $50 bond sells for $25; a $100 bond for $50. And they can be purchased at virtually any bank or savings and loan.
* Stock: Investors, new and old, can benefit from a subscription to the Moneypaper, a newsletter about dividend reinvestment plans. The Moneypaper, which can be reached at (800) 388-9993, provides investors with one of the least expensive ways to buy the single corporate share that’s necessary to join most dividend reinvestment plans.
A dividend reinvestment plan allows you to buy stock directly from the company either with cash or reinvested dividends. By buying direct, you avoid brokerage fees.
Moneypaper subscriptions are half-price for newcomers: $40.50. In addition, the publication has launched a senior citizen’s discount, offering renewals for $45 to those over the age of 65. (Seniors must send a copy of a driver’s license or ID card to verify age.)
In addition, the Moneypaper is offering holiday “stocking stuffers” for current subscribers. These deals allow a subscriber to buy a share of stock for a friend whom they’d like to get started with a dividend reinvestment program. A single share of Westinghouse, Safety-Kleen or The Limited are sold for $30 per share, including trading fees. For $45, you can buy a share in Ford, American Water Works or Frontier Corp., and for $60, you can get a share in either Wrigley, Houston Industries or Gillette.
* Basic guide: If someone you know needs help understanding basic concepts in the financial markets--from credit card terms and conditions to recognizing tell-tale signs of financial fraud--take a look at Jonathan Lansner’s “How Money Works.”
This is a colorful, fully illustrated guide that, in a series of short, snappy chapters, explains everything from deregulation of the financial markets to interest rates and retirement planning. The book is sold in major bookstores for $19.95.
* Revised classic: Back in 1978, Andrew Tobias came out with his first version of “The Only Investment Guide You’ll Ever Need.” This $12 guide, which actually lives up to the name, is now being updated. Publisher Harvest/Harcourt Brace doesn’t expect the book to hit retail shelves until March, 1996. But if someone on your gift list needs savvy investment advice, it’s worth waiting for.
* Calendar: Want to stress financial basics--like “plan ahead,” “contribute to a 401(k),” or “consider disability insurance”? Then “The Wealthy Barber” 1996 calendar could be for you. Based on the best-selling book of the same name, it provides sage advice in an amusing cartoon format. It sells at bookstores for $10.95.
* Coffee mug: After a year like this, when stock prices soared more than 30%, some people may need reminding that stock prices can fall too. If so, get them an Ibbotson Associates coffee mug or wall calendar. Both are emblazoned with the oft-published market fever lines that graphically illustrate the performance of big and small stocks, bonds, Treasury bills and inflation since 1926. The mug, $15, and the calendar, $9, can be purchased directly from Ibbotson at (800) 758-3557. Shipping, handling and sales taxes, where applicable, will be added to the cost of the order.
* Disk: Buying for a barrister with a sense of humor? Nolo Press, the Berkeley publisher of legal self-help manuals, offers its latest version of 200 lawyer jokes on disk for $9.95. Or its humorous book “29 Reasons Not to Go to Law School,” also $9.95. Either can be purchased in book stores or directly through the publisher at (800) 992-6656.
