How to Give An Investment As a Gift

Investments as gifts can be the most impactful of all other gifts you can give your family or friends. They benefit everyone – the giver and the recipient, such that the recipient gets the benefit of feeling appreciated and you save yourself from paying tax gains. 

All kinds of investments can be gifted from stocks to real estate. 

Here’s how to give investments as gifts and make an impact in someone else’s life. 

A. Stocks As Gifts

With stock gifts, the gift amount would be the amount in full market value at the time of investment or purchase of the gift. You can transfer shares you already own or purchase shares in the recipient’s name. If well done, a stock gift can be a gift that keeps giving as the appreciation of the gift can be realized every year. However, will there be substantial gains, ensure that you give the recipient a record of its cost basis i.e. capital gains tax and commission fees. Stocks as gifts can be a great way of supporting someone as it’s more socially responsible investment.  

Learn More: How to Determine Which Shares to Buy the on the NSE

B. Bonds As Investment Gifts

Bonds can make great investment gifts. They are low-risk, government-backed bonds that provide the recipient a safe way to save.  Unlike stocks, they come with no fees, expenses and taxes. 

Learn More: 10 Tips for Successful Bond Investing for Beginners

C. Real Estate As Investment Gifts

Real estate properties can make great investment gifts for children. Need I say more? 

Learn More: 7 Common Mistakes to Real Estate Investing to Avoid

D. Gifting Collectible Investments

Collectables are not always as great as classic investments but they can be appreciated in value with time and be worth far more than originally sold because of their condition, rarity or popularity. Collectable investments range from art, fine wine, toys, comics and more. 

Take note that art is subjective and can be tricky to gift as not everyone has the same taste.  However, as with investment gifts, it doesn’t matter what the art looks like, rather how much it could be worth in the future. Art may take a long time to make any return, fine wine on the other hand may turn up a 10-15% return after a few years. 

E. Other Meaningful Financial Gifts

There are many other financial gifts you can give family and friends aside from stocks. You can contribute to their financial accounts such as pension accounts, savings accounts or college funds. This can be more impactful than a simple cash gift as the gift will grow until retirement or ready to use. 

Before Your Gift

The idea of giving an investment as gifts (a gift that has the potential to keep giving)  can be quite attractive to many of us. However, just like all investments, they are still risky. Therefore, before you give, ensure that you have considered the risks. Do all your research and thoroughly educated the recipient of it.

At the end of the day, you want your efforts to yield, not come to nothing. 

Happy Giving!

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