It’s a festive season in trying times, and you may be wondering, what the best gift to give to your loved ones? A holiday sweater, a car, the latest smartphone available or a computer?
All these seem like quite good gifts. However, what about actually getting your loved one a gift that has the potential to always grow in value? And consequently, place them on a path to future financial success?
To attain such a gift, you will certainly like to take a look at offering investments as gifts. Investments always have the potential to grow in value over time, meaning that by the time the investment you provided as a gift matures, it will uplift your loved one’s financial status.
So that you pick the most suitable investment gift for your loved one and, importantly, one that will not exhaust your savings, you need to take a look at the advantages and disadvantages each investment possesses.
For an investment gift you can be confident in — that will never depreciate and will likely never be defaulted on — consider the U.S Savings Bonds. These bonds are usually by the U.S Department of Treasury. The department issues these bonds to fund the government’s activities. In return, you are guaranteed repayment of the loan with interest over a given timeframe. The advantage of this investment is that your loved one will not squander the money as they cannot access it till maturity. Moreover, they are guaranteed interest payments. However, you should know this gift is not liquid; therefore, your loved one will not be in a position to use the money in case of an emergency.
If you are aware of a company whose products you’ve loved and seen rise in value, instead of purchasing for the products from the said company, why don’t you buy the company’s shares, effectively making your loved one part of their desired company? Moreover, this investment is bound to earn them a pretty penny as well. Granted if the shares lose value, there’s a lesson to be learned there, but ideally you pick something with conservative, low-to-medium risk. This will set them on a path to sound investing.
Also, in the event the earlier two options were not quite up to your alley, you can also consider gifting them investments like mutual funds. Mutual funds will enable your loved one to earn money over a long period. This makes it one of the best investment options for younger individuals. However, this type of investment makes it quite cumbersome to award the gift to your loved ones due to the paperwork involved. This is in addition to the high purchasing costs associated with the fund. Regardless of these, once you move past the hurdle of transferring the funds, your loved one will have one of the best possible gifts managed by some of the best professionals depending on the mutual fund you select.
Though undeniably one of the best gifts you can ever offer to a loved one, always note that investment gifts are subjected to taxation. This is a minor drawback you will have to explain to your loved ones. Regardless, this festive season why don’t you give your loved one a gift that literally keeps giving?