Stocking Up on Stocks and Other Financial Stocking-Stuffers
When Pam Roy needed a christening gift for her godson, she thought about a number of toys and gifts that he might enjoy right away. But she settled on something better: A single share of stock in Walt Disney Co., the Burbank-based movie, music and theme park company.
In the eight years since then, the other gifts she had considered would have broken or become too small or simple, but that share of stock has quintupled in value. Someday, it may help finance her godson’s college education.
During the height of the holiday gift-giving season, Roy’s story is worth repeating to parents, grandparents, friends and relatives who hope to give gifts with a lasting impact. And because of a continuing trend toward deep discount brokerage services and so-called no-load stocks, it has never been easier or less expensive to follow her lead.
In addition, there are a host of other financially oriented gifts--from prepaid phone cards to books to Internet access--that can suit just about anyone on your gift list. What are they and how can you get one at the last minute? Here’s a guide:
Stocks
Years ago, the only way to buy a single share of stock was to go through a broker, who would often charge a fee almost as costly as the share itself. However, partly thanks to computer-based services that allow online trading for as little as $15, full-service brokers are often willing to whittle down their fees to accommodate a customer with a small transaction.
Can’t find an accommodating broker? The Moneypaper, a newsletter about dividend reinvestment plans, allows subscribers to buy initial shares through the Mamaroneck, N.Y.-based firm for a service fee of $15. (It costs $40.50 for an initial subscription to the Moneypaper, according to Editor Vita Nelson. A quarterly, sister publication called the Drip Authority charges $36 for an annual subscription and also gives you access to the company’s inexpensive stock trading services.)
In addition, more than 150 of America’s leading companies, including McDonald’s, Wal-Mart and Mattel, offer purchase plans that allow prospective shareholders to buy the stock directly from the company, usually with a minimal--or no--brokerage fee.
Many of these companies have initial minimum investment requirements of $250 or more. But these requirements are often waived for customers who take part in automatic investment programs in which they agree to invest small amounts each month, says Charles Carlson, editor of the DRIP Investor and the No-Load Stock Insider, a Hammond, Ind., newsletter publisher. Wal-Mart, for example, requires an initial investment of $250, but will waive that minimum for anyone willing to invest $25 a month.
Additionally, another 900 companies will allow you to buy stock direct--sans brokerage fees and sometimes even at a discount--once you’ve purchased an initial share.
How do you find out which companies offer these programs? The Moneypaper and the No-Load Stock Insider offer free listings for prospective investors. In addition, Carlson’s firm operates a toll-free phone service that allows individuals to request investment documents from about 80 participating firms. For prospectuses and general information, call the Direct Stock Purchase Plan Clearinghouse at (800) 774-4117.
To get the free listings of direct purchase stocks, write to the No-Load Stock Insider at 7412 Calumet Ave., Suite 200, Hammond, IN 46324-2692. Or call the Moneypaper at (800) 388-9993.
Books
If the people on your gift list need information--perhaps on investing or budgeting--far more than they need stocks, there are several good books to consider.
The Securities Industry Assn., a trade group representing about 760 securities firms, has published a full-color investing guide, “Your Guide to Understanding Investing,” which it sells for $12, including shipping and handling. The guide touches on everything from reading daily stock tables in the newspaper to buying individual stocks and bonds, investing through mutual funds, and understanding pension investment choices. To order, send a check for $12 to Securities Industry Assn., 120 Broadway, 35th Floor, New York, NY 10271-0080, Attn: Guide.
A cheap, although less colorful, alternative is the SIA’s “Investor Topics” booklet, which explains the basics of investing. It’s smaller, has less detail and less-attractive graphics, but it’s free. To get a copy, send a request with a self-addressed, legal-size envelope and 78 cents postage to the SIA at the above-mentioned address.
Have a Gen-Xer on your list who needs some rudimentary help getting their financial act together? Beth Kobliner’s book “Get a Financial Life” is a quick read for people who need guidance on anything from budgeting to buying life insurance and houses. The guide costs $11 and is available in bookstores.
A cheaper alternative: Mutual fund giant T. Rowe Price--(800) 638-5660--provides a free, full-color “Personal Strategy Planner” that can help individuals set financial goals and figure out how to meet them. But it doesn’t explain anything about insurance, budgeting or buying houses.
Internet access
Know somebody with a decent computer and modem, but who hasn’t yet surfed the Web? You might consider a subscription to an online service. These services are sold through virtually every major phone company, as well as video and computer stores. While the bells and whistles and pricing can vary, unlimited Internet access normally runs about $20 per month. And because the Internet is seen as the hottest new marketing tool, companies, trade groups and publishers are providing a wealth of valuable information, interactive work sheets and games for free.
A number of services, including Pacific Bell Internet at (800) 310-BELL, will give you a month free when you sign up. The software to get started is also usually free--and fits in a Christmas stocking. Information and software for different online services also is available in shopping malls, video and computer stores.
Phone cards
A stocking-stuffer-style gift that may suit a student or frequent traveler is a prepaid phone card. These cards, which are sold by phone companies, banks, supermarkets and credit card concerns, usually give the recipient a set amount of long-distance calling time. You can use the cards at virtually any phone by dialing a toll-free number and an access code. The amount of time used is then deducted from the card “account” until the card’s value is used up or recharged with an additional investment.
A few cautions: Check for expiration dates, per-minute rates and customer service numbers. Some issuers of prepaid cards profit by making their cards “expire” before anyone has a chance to use the phone time or by making the cards hard to use. In addition, the per-minute rates for long-distance calling can vary dramatically, from about 20 cents per minute to nearly $1. The end result: A $5 card could give you from 5 minutes to 25 minutes of calling time. Naturally, the 25-minute option is the better deal.
