Stock Gift Cards : Giving stocks as Gift

Came across this article about giving “stock gift cards” as a gift which is very innovative ideas though the practicability in Singapore’s context remains yet to be seen. Many challenges and hurdle will need to be cleared before this could happen here in our country.

I don't mind if someone would give me this as a gift which consists stock of " Google, Apple or Facebook "  and this is definitely much better than getting something which you don't really like it or just wear it once.  :P

Stock Gift Cards: Bringing Wall Street To The Masses?

http://www.investors.com/etfs-and-funds/personal-finance/wall-street-literally-meets-main-street-via-gift-cards/

Economist has long debates about the efficiency of gift-giving and the merit of it, billions of dollar lost in economic value as receiver of the gift did not really appreciate what they received.

Deciding what holiday presents to buy can be stressful as we would all like to buy everyone their dream gift if we could. Joel Waldfogel, an economist at the University of Minnesota and author of the book "Scroogeonomics: Why You Shouldn't Buy Presents for the Holidays," says we need to re-think the gift-giving process.

According to Waldfogel: "The problem with gift-giving has nothing to do with the intentions, those are all good. But when we allocate resources through gift-giving, we do it in a kind of perverse way.

 I'll only spend $100 if I see something that's worth at least $100 to me. Normally, $100 worth of spending produces $100 worth of satisfaction. With gift-giving, I can go out and spend $100 on you, let's say, and I don't know what you want, my expenditure of $100 can produce $0 worth of satisfaction. So it's just potentially a very, very bad way to allocate resources,"

"In the U.S. we spend about $80 billion on holiday gifts and it would be nice to get $80 billion of satisfaction out of it," he says.

But it can be difficult to measure that satisfaction. Everyone appreciates gifts, but they don't always enjoy the item.

"In those situations where we know we have to give, but we also realize that we have no idea what to give, there are some alternatives to shooting in the dark and choosing an item," says Waldfogel. 

When we buy for ourselves, every dollar we spend produces at least a dollar in satisfaction, because we shop carefully and purchase items that are worth more than they cost. Gift giving is different. We make less-informed choices, max out on credit to buy gifts worth less than the money spent, and leave recipients less than satisfied, creating what Waldfogel calls "deadweight loss. While recognizing the difficulties of altering current trends, Waldfogel offers viable gift-giving alternatives.

Here is the view from another Behavioral Economist, Dan Ariely’s understanding of gift-giving.

As highlighted by him: “ Behavioral economics has one more lesson for gift-givers: If your goal is to maximize a social connection, don’t give a perishable gift like flowers or chocolates. True, people enjoy them, and you don’t want to impose by giving something more permanent. But what are you trying to maximize? Is your goal to avoid imposing on them or for them to remember you?

For a durable impression, better to give a vase or a painting. Even if your friends don’t like it that much, they’ll think about you more often (though maybe not in the most positive terms).

 Better yet, give a gift that gets used intermittently. A painting often just fades into the attentional background. An electric mixer, when used, gets noticed.”

 This is what he proposed on giving something more meaningful :

“I like to buy people high-end headphones. They get used intermittently, so I can imagine that every time you put them on, you will think of me. Also, they’re a luxury—the kind of thing that people have a hard time buying for themselves. Best of all perhaps, they’re intimate: When I give someone headphones, I can think of myself whispering in their ears.”

Could this be a good idea for you to buy in the next “Christmas Holidays “ as a gift for your loved one?

Here is the link on an article from Dan Ariely :

http://danariely.com/2011/12/17/is-it-irrational-to-give-gifts/

Using your kid’s “Ang Pou “ money to buy a share as an investment for the education fund.

Giving stocks as a gift might be still a fancy idea at this point of time, but how about using your kid’s “Ang Pou” to buy a share for them for their future usage, like education fund.

Many ways to save for your kid’s education, it could be in the form of “ endowment insurance “ or just purely saving in the bank.

We have been using their new year or birthday “ Ang Pou “ to buy share under our custodial since they were born. Their total value of the share in our custodial now amounting to $29,700 ( as of closing 10/08/2016).

This amount of money may not 

be enough to fund their education, but it will serve as part of the total education fund, bear in mind that my younger daughter still have 10 years for compounding interest to take effect until she reaches tertiary education.

What about you? How do you save or fund for your kid’s education?

Cheers!

Quote Of The Day :

"I always like to find companies with no to low debt because debt complicates things. I also like to see whether management owns enough of the company’s stock to serve in its best interests. But you often have to keep track of management’s actions, digging into the footnotes of financial statements to see if they are honest people." by Walter Schloss