Rob Stock (New Zealand) looks at tasteful and enduring ways to leave money under the tree at Christmas although some ideas come with risks.
Struggling for gift ideas? Your loved ones might like a financial present.
Although chocolate money is a traditional stocking filler, there are plenty of options for those wishing to give more durable forms of financial wealth at Christmas. And some of them involve not just wealth, but giving the kind of expertise that can lead to a richer future.
We take a look at 12 ways to transfer wealth as a present, one for every day of Christmas.
Cash: Tried and tested, and can be spent on anything. Works for kids, but not for many adults, although some cultures have no problem with gifts of cash. What’s acceptable now? Depends on the age. Some argue that for a teen, it is the equivalent of a tank of petrol ($80 to $90 or so). Others the cost of a good book, or an X-Box game, excluding the overpriced new ones ($25-$40).
Cash, but straight into a KiwiSaver account: Likely to cause some resentment, particularly as they can’t touch it until they are 65, or until they buy their first home. Could help create a savings habit.
Vouchers: Hand over with a message to spend soon in case the store goes bust and leaves you as an unsecured creditor unlikely to see much of value of the voucher. Just ask those with Sounds vouchers who have seen the store chain go into voluntary liquidation. Some sources suggest there could be as much as $1 million worth of unused Sounds vouchers. Tend to be sold at face value.
Prepaid cards: Like the Prezzy Card from the PostShop. These are pre-loaded swipe cards that work off the Visa credit card system. Recipients can spend them anywhere Visa is accepted. Also come with a sell-by date, after which the value stored on them belongs to the card issuer. A $50 card will cost $55, unless it’s bought online.
Gift cards: from the likes of Borders and Mitre 10. These are basically vouchers on a card, and should also come with a warning not to hold on to them for long. Just like vouchers, you lose them, it’s your bad luck. Much friendlier to hand over than cash, and of course, the giver limits where they can be spent.
Bonus Bonds: Always a traditional Yuletide seller. The ANZ, which owns them, sells a lot at Christmas and offers extra draws and prizes to those who buy them (or receive them) during a set period this year until December 31. Bonus Bonds are basically units in a huge managed fund invested largely in safe assets like fixed interest. They can be bought in batches as small as $20. The returns are distributed as prizes to randomly selected bond-holders. In that they are a bit like perpetual Lotto tickets, but have the kind of durability a Lotto ticket lacks and so make a reasonable gift.
Gift them shares: Everyone has a gifting limit each year $27,000 each, although no one’s going to quibble a few bucks’ worth of shares. Avid investors hoping to get youngsters into investing might gift them a few shares from their portfolio to get them on the right track.
Buy them gold, or silver: Gold and silver bullion coins can be bought from the New Zealand Mint (a private business) and gifted. A silver coin would have set you back around $23.23 on Thursday last week, provided you bought in sheets of 10, while a .9999 pure one troy ounce gold bullion coin would have set you back $1151. Many hold these not as a way to punt gold, which has done very well, as has silver, but as a store of value that can be buried in the garden in case all else goes wrong, a little like an insurance policy. Those who bought gold at the peak of the 1980s would not agree.
A collector’s coin: PostShop sells these commemorating events and culture. Fun though they may be, they are not a great investment. Just look at the prices paid for these on TradeMe to see that.
The gift of knowledge: Buy them a place on an investment course. Take care, though. Some courses are little more than sales pitches. The Shareholders’ Association offers courses on investing in regional centres, ranging in price from $35 to $80.
A money book: There are plenty of titles available. Make sure you match the book to the recipient. Someone you know is struggling to get their head around KiwiSaver might value Peter Hensley’s book on the subject, while a TradeMe junkie might get a lot out of Michael Carney’s new edition of Trade Me Success Secrets. Sometimes a book can be life and fortune changing.
A money game: Play your way to wealth. There are games available from the likes of Rich Dad, Poor Dad author Robert Kiyosaki, or home-grown characters like property expert Kieran Trass. A wee word of warning though. These games can be unusually expensive, their sell being that the money will be well spent in the long run. For example, Kiyosaki’s Cashflow 101 from Empower Education costs $395, while Brad Sugar’s Leverage: The Game of Business will set you back $329 from Richmastery’s online bookstore.