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Buy individual shares or open a mutual fund for minor?
Old 06-30-2011, 07:34 AM   #1
Confused about dryer sheets
Join Date: Jun 2011
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Buy individual shares or open a mutual fund for minor?

When my son turned 2 I bought him a single share of Disney stock with a framed certificate which is hanging in his room. He is now 5 and is beginning to learn about money. I originally did this because I wanted for him eventually notice the frame and ask about it so that I could start teaching him about saving and investing.

He also does extra chores around the house for commission ($2 for doing his own laundry, $3 for washing the cars with daddy, etc..). He also has a small savings account with our local bank where he goes once a week to deposit a dollar or two from his weekly "income".

He LOVES Disney and we live in Orlando so we go to the parks all of the time. Even recently we went on the new Disney ship. So we are big Disney fans at home.

Okay to my question now - Every year I get a small dividend check for less than $1 and it is starting to annoy me as I hate driving to the bank to deposit such a small check. I called the fund plan reps to see if there was a way to reinvest the money instead of sending me a check for less than the stamp is worth. The only way they can do that is if I increase his shares buy sending at least $250. With only one share, they won't reinvest the money. I have the form in my hands right now and just when I was about to send the check I thought, is it better to buy more shares of a single stock for him or should I open a mutual fund account for him instead?

Your thoughts?

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Old 06-30-2011, 10:26 AM   #2
Thinks s/he gets paid by the post
Join Date: Jul 2003
Location: Pasadena CA
Posts: 2,674
If you like the stock buy the $250 so you can reinvest. The purpose was a gift/learning experience, right? Could buy more dividend reinvestment stocks if you want. I bought some for grandchildren but am now doing mutual funds but didn't sell the old stocks. May all be useful to them in 10/15 years.
T.S. Eliot:
Old men ought to be explorers
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