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This Father's Day, Give Dad a Financial Toolkit |
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by Reprinted with permission of Investment Representative Celine Richardson of EdwardJones
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Friday, 06 June 2008 |
 Father's Day is almost here.
If your father is handy around the house, you might be considering
giving him tools of some kind. Of course, drills, sanders, saws
and screwdrivers make excellent gifts, but this year, why not give
Dad something that can help him build his future? Specifically,
why not give him a "financial toolkit"?
What could go into this toolkit?
Here are a few suggestions:
- Stocks - You may want to give shares of a company that produces
products or services that your father uses. If you're going
to give some of your own shares, you'll need to know what you
originally paid for the stock, how long you've held it and its
fair market value at the date of the gift. Your father will
need this information to determine gains or losses if he decides
to sell the stock.
- Bonds - If your father is at or near retirement age, he might
benefit from the interest payments provided by bonds. If you
give your father a municipal bond, the interest is free from
federal taxes, and if the municipality that issues the bond
is located in your father's state, the interest also may be
exempt from state and local taxes. However, some municipal bonds
- particularly airport and housing bonds - might be subject
to the alternative minimum tax (AMT), so you'd want to be pretty
familiar with your father's tax situation before giving him
an AMT-susceptible bond.
- IRA contribution - As long as your father is working, he can
contribute to a traditional or Roth IRA - and he should, because
an IRA offers tax advantages and a wide array of investment
options. Your father can put in up to $6,000 to an IRA if he's
50 or older, or $5,000 if he's under 50. While you can't make
a deposit into your father's IRA, you can give him some money
for that purpose.
- Education - Even if your father has been investing for a while,
he could probably still benefit from some additional knowledge.
Consider giving him a subscription to a magazine that focuses
on financial issues. Or you might want to give a book on investing,
such as Dr. Jeremy Siegel's Stocks for the Long Run, generally
considered one of the most valuable and "user-friendly" books
for both new and experienced investors. A word of caution, though:
Stay away from those books that seem to "promise" huge investment
success if readers follow the techniques described by the author.
- Games - You can find a variety of investment-related games
that are both fun and informative. These games often use real-life
scenarios to depict the various factors that go into investment
decisions and the equally various results that can follow. You
can also choose games that focus on other financial issues,
such as managing cash flow. You can find these games in the
old-fashioned "board game" format and as computer software.
A quick search on the Internet will turn up plenty of these
games.
Put some of these suggestions to
work to create a financial "toolbox" for your dad this Father's
Day. He'll likely appreciate your generosity - and he'll be able
to put the "tools" to good use.
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