HomeInvestmentsWhy I Love Giving My Nieces and Nephew One Particular Gift

Why I Love Giving My Nieces and Nephew One Particular Gift

With Christmas less than 24 hours away I thought I would take a moment to discuss my favorite gift giving experience…and I get to make it at least twice a year!  and I don’t even get that much credit for it.  In fact, in terms of “credit” I would be much smarter to buy The Wife a new bag from Louis Vuitton which she swears is an asset.  Nope, it is a gift for my nieces and nephew.  As of the date of this post I have 2 nieces and a nephew (expecting another nephew in a few months to even out the score), and I get excited each time to give them one particular gift whether it is their birthday or in this case Christmas.

It is the gift of money safely invested for them!

Instead of buying them material garbage made in China, every birthday and Christmas I transfer money to their investment account.  I then invest their money in a particularly safe (in my opinion) company and/or broad based ETF with low annual fees and no commission costs from Fidelity.

List of Investments for Family Members

Titling the Gift Account

I keep the accounts titled in my name, but have the statements sent to their parents, so they know exactly what’s happening in the account.  The reason I don’t do a joint account with the niece or nephew is that if in the off chance they are not a responsible adult I want the opportunity not to give them the money (or I can give it to their parent or what not).

Will it ever be a ton of money? Probably not, but I know that my 18 year old future nieces will be much happier with cash for their freshman year of college than the barbie doll that they played with for 35 seconds and forgot about.



  1. Ah ha, now that’s an interesting way to do it! I have been trying to figure out how to gift stock without having to get every parent on board with opening an account (and some parents I don’t trust as far as I can kick ’em). Are you at all concerned with tax implications or is it too early for that?

    • As far as taxes – at first I did and bought tax exempt NY bond funds, but bailed on that idea. I didn’t think it was their best interest to be in bonds for 10 to 20 years. Also the amount in the accounts isnt going to destroy me. If I have a 3% dividend on 5k it’ll cost me 100 call it an extra gift! In terms of cap gains I can transfer to them then sell.

      With regards to parents – I really understand! This is one of the reasons I hold these accounts in my name.

  2. The gift of stock/investing is something I really want to get started for my cousins in the future. This year was too crazy to really consider doing it as we’re just not getting back to steady state with our finances. But I could definitely see this being their gifts for birthdays and Christmas next year.

  3. I’m so glad you wrote about this. I spent a lot of time researching what to do for my nephew. I am doing the same thing. What also decided it for me to put it in my name was if he has money it will count against him applying for college aid. I also felt I didn’t want an 18 year getting a what I’m hoping will be at least 5k. He’ll blow that in 2 seconds. I’m hoping to give it to him when he buys a house or maybe he can invest it and it will boost his retirement.

    • The college aid part is another reason not to put anything in his name, but like you mentioned for me it is the control aspect that is huge.

  4. I don’t know, strikes me as sort of like giving a gift with a string attached. You can snatch it back when/if you feel like it. I suppose I can see something like this with your own kids, but I don’t think I’d ever do it with kids that are not my own. I certainly don’t think I would “love” explaining it to them and I think it would actually be an awkward thing for all involved.

    I have a neice that’s young and the idea of me trying to teach her about money, if this is what you think it is, is strange. That is a job for the parents. Also, I recall those “garbage” toys from DIS, MAT & HAS really lighting up the littles one’s faces with joy and when kids are young that is what it is about at this time in their lives.

    My Dad used to give my daughter EE bonds for her birthday/xmas but they were NOT in place of nice toy that made her feel good, they were in addition too that. She couldn’t care less in the 2rd grade that it was a $50 bond that would be worth $100 later.

    Strange thing to do in my view since they are not your kids and it doesn’t sound like you have been approached by their parents to teach some money habits.

    • Mike,

      I always appreciate an alternative view – so no worries in disagreeing. You are right, I could invade the money and swipe it away, but I would destroy relationships in doing so (mainly, my wife, sister in law and brother). Instead what would be the more likely situation is that I transfer the account over to the parent if the child couldn’t handle it.

      What is much more interesting to me about your comment – is the teaching part being their parents’ job. You may or may not be right. I think you may have opened my eyes to being sensitive when the child gets a bit older and questions arise about the account. I think you are right that I’ll have to approach it with the parent rather than a teaching opportunity alone.


Please enter your comment!
Please enter your name here

Related Articles

Recent Comments