• Kenzo T Weiss

Investing in Your Family’s Future: The Gift that Keeps on Giving

By Newday CEO Doug Heske

Graduation traditions have been upended this season, and many parents and grandparents are trying to decide on appropriate and meaningful gifts for their children and grandchildren facing economic turmoil and potential college postponements.

Starting an investment portfolio for a young person in your life is one of the most impactful gifts an individual can give during these uncertain times. No matter how small, purchasing stock may ultimately help fund a university education or the purchase of a new home, start a new business, finance a world trip, or support a young adult while he or she works to help those less advantaged.

More specifically, gifting stock in sustainable companies can provide young people with the opportunity to cultivate social and ecological advancement, not just their own financial growth. As the uncertainty of the future looms, providing the next generation with the tools to create change is paramount. Sustainable investing continues to shine despite market turmoil, and we believe there has never been a better time to purchase stock for the young people in your life.⁠

A Graduation Gift of Stocks

A gift of equities will give children a financial head start for a lifetime.

Seeding a portfolio of common stock can be accomplished for a relatively small amount of money – and minimal fees – while building a foundation of knowledge about the financial markets. For a young person, owning shares in The Walt Disney Company, Apple, or Amazon.com can be a learning experience coupled with fun as they receive annual reports and are invited to shareholder meetings. Sticking with high-quality growth companies also can pay off handsomely: 100 shares of Apple purchased in mid-1991 for $1,200, then held for twenty years, would be worth $40,000 today. (And Apple doesn’t pay a dividend!)

Stock-picking also can open a window of insight into the national and global economies when you discuss how to make choices among companies and sectors.

Annual Gifting for Tax Benefits

Distributing investment dollars to your beneficiaries today can provide your family with important tax advantages in the long term. More information on this topic is available from the IRS.

If you make annual exclusion gifts to your children or grandchildren now, they receive the benefit of your generosity without paying federal tax on this income, and you receive the pleasure of watching your loved ones enjoy their gifts. If you were to make the same bequests upon your death, the funds would be part of your taxable estate.

In 2020, every individual taxpayer can use the $15,000 gift exclusion, or $30,000 per married couple. A taxpayer may make as many gifts of $15,000 as he or she chooses (such as to multiple children or grandchildren), as long as no recipient gets more than $15,000 of value in any one year from any one person.

Newday does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Impact Investing

The climate crisis also defines the future of our younger generations. Chances are the young people in your life deeply care about the planet or equality or animal welfare.

Building a portfolio of companies that are socially responsible can bring about an experience that teaches younger people that their capital can be used as a mechanism for good in the world. Newday’s investment strategies are focused on companies that are focused on creating value for all of their stakeholders and as a result, have historically delivered stronger investment returns and deeper impact.

Through the Newday Impact Investing platform, accounts can be set up for a minimum of $100 per portfolio that allow for investment in an impact strategy of your choice, ranging from Gender Equality/Inclusion/Diversity to Ocean Health. You can learn about all of Newday’s thematic strategies here.

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© Newday Financial Technologies, Inc 2020