Stocking stuffers that pay off

USA Today (Society for the Advancement of Education), Dec, 1996

Looking for gift ideas for the holidays? The Institute of Certified Financial Planners has a suggestion: Consider giving a money present - not crisp bills that will be spent two days later, but a gift with lasting (and in most cases, growing) value such as stocks, mutual funds, EE bonds, coins, charitable contributions, or educational materials about money.

Educational materials are not as exciting as the latest video game, but teaching your children how to manage money properly may be one of the best gifts you can give them. Look for activity books or board games geared to help children manage their allowance, invest, and save. For college students or that financially disorganized friend or relative, consider a budget book, material on how to manage money or pinch pennies, or a subscription to a financial magazine.

Mutual fund shares. Opening a mutual fund account for a child is not as expensive as you might think. Many funds reduce their minimum initial investment for a custodial account @one in which you control the money for the child). You can open some accounts for as little as $25 as long as you agree to make automatic monthly payments until the account reaches a specified minimum. One fund recently opened a fund targeted for young investors that invests primarily in companies that kids know and love, such as McDonald's. If you buy shares for an adult, some fund families will let you buy a gift certificate that allows the recipient to choose a specific fund within them.

Individual stocks can teach a child about dividends and how investments grow (and shrink). Pick a stock the person has an interest in, such as Disney for a child or a technology stock for that computer whiz. It's more expensive to buy only a few shares, but a discount broker might keep the costs down.

EE bonds can be purchased for as little as $25 (half the face value of $50). Minors don't have to pay taxes on the interest until the bond is cashed in, and then it is taxed at the child's rate, if taxed at all.

Charitable gifts. For people who have everything, make a donation in their name to their favorite charity or one that matches their interests.

Collectible coins. Gold and other coins come in all price ranges and are attractive and fun. Just don't let Junior trade them with the kid down the block-they are not play money. Also keep in mind that, as an investment, most collectible coins are not as easy to cash in as the ideas mentioned above and have not returned as well over the long run as stocks.