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Give the gift of stock this Christmas and enjoy the tax benefits

December 23, 2014, 5:57 pm

From now until the end of the year, you have an opportunity to help reduce estate taxes and provide your loved ones with a more substantial legacy – all through the gift of stocks.

Stephen Stribling

Stephen Stribling

The idea of giving stocks to children and teenagers this holiday season is an attractive option for some parents and grandparents. Gifting stock is an enduring way to pass on what we have learned about managing and preserving wealth to the next generation. It can teach them a lesson about the markets as well as encouraging children to save while cultivating a responsible approach toward managing money. You may even want to consider using some of the gains to teach them the importance of charitable giving.

When gifting an investment, take the time to explain basic investment types such as cash instruments, stocks and bonds. Make investing interesting by engaging in conversations about companies that provide popular children’s products such as toys or clothing. And be sure to explain the powerful concept of compound interest, so children can see in numbers the difference between starting to save early and leaving it until later.

A great way my children were able to understand the importance of finances at an early age was through books that incorporated financial concepts into an interesting storyline. Not only did “The Richest Man in Babylon” and “The Ultimate Gift” offer valuable financial advice, it also addressed important life lessons.

“The Richest Man in Babylon” by George S. Calson tells the story of two penniless friends who seek the knowledge of wealth from their old classmate, the richest man in Babylon. It teaches the lessons of work, savings, investment, risk, retirement savings, annuities and education.

“The Ultimate Gift” by Jim Stovall tells the story of a billionaire that leaves his family a number of profitable businesses after his death, but forbids them to run them. He believed that raising his family by giving them everything they wanted now left them entitled and incapable of work. However despite his great nephew’s serious attitude problems and a sense of entitlement, the old man sends him on a quest through a series of prerecorded videos for the ultimate reward. If he completes the quest in a year, he will inherit one billion dollars. The value of work, money, friends, education, strife, family, laughter, dreams, gratitude and more are explored as he struggles through the quest.

My son and daughter read these books at an early age and have reread them over the years. My sincerest hope is that if I ever have grandchildren that my children will give them these two books of knowledge, plus a few shares of a good stock.

Stephen Stribling is a Senior Vice President with The Pelican Bay Group, Global Wealth Management Division of Morgan Stanley in Denver. He can be reached at 303-572-4889 or toll free at 888-477-3002. Email him at stephen.l.stribling@ms.com or visit his website:
http://www.morganstanleyfa.com/stribling/. The information contained in this article/interview is not a solicitation to purchase or sell investments. Morgan Stanley Smith Barney LLC (“Morgan Stanley”), its affiliates and Morgan Stanley Financial Advisors or Private Wealth Advisors do not provide tax or legal advice. Readers should consult their tax advisor for matters involving taxation and tax planning and their attorney for matters involving trust and estate planning and other legal matters. Any information presented is general in nature and not intended to provide individually tailored investment advice. The strategies and/or investments referenced may not be suitable for all investors as the appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives. Investing involves risks and there is always the potential of losing money when you invest. The views expressed herein are those of the author and may not necessarily reflect the views of Morgan Stanley Wealth Management, or its affiliates Morgan Stanley Smith Barney, LLC, Member SIPC.


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One Response to Give the gift of stock this Christmas and enjoy the tax benefits

  1. Chris Reply

    January 21, 2015 at 1:33 am

    I’m not familiar with “The Ultimate Gift” so I’ll have to check it out.

    Clason’s book, however sits prominently on my shelf, and its style of writing directly influenced my own book Creating Wealth From Scratch.

    The lessons are different though. Whereas “The Richest Man In Babylon” was primarily about thrift and wise savings to create wealth, mine is about the power of ideas, leverage, compounding, and believing in yourself.

    It’s been years since I’ve visited Vail, but the back bowls call out to me whenever I hear it’s snowed. 🙂

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