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Stocks, not socks: How to gift your mates shares

Anastasia Santoreneos
·4-min read
A Christmas cone filled with Australian money, $100, $50, $20
Stocks, not socks: How to gift your mates shares. Source: Getty

If you’re scrambling for gift ideas for a mate, can the printed socks they’ll likely never wear and opt for stocks, a new social investing app is saying.

With initial public offerings from well-known companies like Airbnb flying left, right and centre this year, investing is becoming more mainstream - and more accessible - than it has ever been.

“For some people, the stock market feels like a foreign and scary place,” VP of US social investing app Public, Katie Perry, said.

“New investors in our community will tell us that they never realised so many of the companies they use every day, at work or in the home, are publicly-traded.

“The lightbulb moment for many people is when they realise that investment opportunities aren’t as disparate from their lives as they might think.”

So if your friends love Nike, why not ditch the socks and buy them a slice of the company?

How do I gift my friends shares?

According to comparison site Finder.com.au, the process for purchasing shares in Australia isn’t as straightforward as you’d think, but it is possible.

There used to be apps that allowed you to gift shares, but these have largely disappeared. However, you can still transfer ownership of shares via an off-market transfer.

What is an off-market transfer?

An off-market transfer is where shares are transferred between shareholders or companies without involving the stock market, and there are four steps to this process, according to Finder.

  1. Open a trading account

  2. Buy shares

  3. Off-market transfer

  4. Print a confirmation

If you don’t already have one, you’ll need to sign up to a broker in order to purchase shares. If you’re planning on doing an off-market transfer, you’ll need to pick a broker that allows this.

Next, you’ll need to buy the shares. You can purchase ETFs or pick individual companies you’re a fan of - or your mate is a fan of.

The off-market transfer is the tricky part, which requires you to submit a request to your broker and the company’s share registry. Be wary of costs incurred with the transfer, which can range between $27 and $55 per company depending on your broker or the registry.

When you submit the form, you’ll need to get a signature from yourself and the person you’re gifting to, so there are no Christmas surprises here.

Once you get a confirmation, you can print it out and give it to your friend as proof of present.

That sounds tough. Can I just buy a gift card for stocks?

While investment company Stake removed the option to gift your friends shares on the app, you can still purchase your friend a gift card for the site. Then, they can take their pick from over 3,000 stocks or ETFs.

When you purchase the gift card, you can write a Christmas message, pay by card and have it sent to your mate via email.

Stake specialises in the US stock market, so you can expect to see some familiar names like Tesla and Apple. Your friend will need to open up an account to access the gift card, but once they do all they need to do is plug the redemption code into the site.

What other investments can I gift my mates?

What about a fine wine? According to Canstar, some fine wines have the potential to return around 10 to 15 per cent after a few years - that’s way more than your savings rate.

Fine art can similarly fetch a pretty penny after a few years.

But if these are out of your budget, you could even gift your mate a part of a house via BrickX. The company purchases a house and splits the house into 10,000 ‘bricks’, so if a house is $1,000,000, a brick will be worth $100.

As the value of the property changes, so does the value of your brick.

Can I gift my kids shares?

If your child is under 18, you can go through a broker and buy stocks on their behalf and hold them until they’re older.

If brokerage fees and initial investments put you off that route, you can also use companies like iTrust, which allow you to create a guardian account and invest on behalf of your child without a minimum. You can even purchase gift cards for your friends’ kids.

Want to hear Australian influencers reveal their best finance tips? Join the Broke Millennials Club on Facebook, and receive one hot tip per day in December.

And if you want 2021 to be your best (financial) year yet, follow Yahoo Finance on Facebook, LinkedIn, Instagram and Twitter. Subscribe to the free Fully Briefed daily newsletter here.