The holidays may be behind us, but a new year of birthdays is right around the corner. If you ever find yourself scratching your head over the perfect gift, look no further than the stock market. Stocks might not be the most alluring gift to give, but doing so has proven to help successful investors like John W. Rogers Jr. expand their wealth opportunities and learn valuable life lessons that aren't always taught in school.
The power of investing early
Most kids receive toys as birthday and Christmas presents. But Rogers' father wanted to give him a gift that wouldn't go out of style next season: Stocks. At age 12, Rogers received an early financial education when he received shares of stocks as gifts and had a checking account where he could deposit the dividends. He started reading financial newsletters, watching the stock ticker prices, and learning more about the companies he invested in so that he could capitalize on more deals in the marketplace.
During an interview at University of Richmond's Robins School of Business, Rogers shared his experience getting stocks for Christmas:
It wasn't fun going to that Christmas tree and getting the envelope. But the nice thing my dad did was let me keep the dividend checks. Every three months, I would get a check in the mail from one of the blue chip stocks that he bought me and he said I could spend it any way I wanted. That started my love affair with the stock market.
Rogers' interest in the stock market continued to grow as he spent time with his father's stockbroker after school and started purchasing more stocks with his work earnings. At age 18, he hired his own broker and quickly became a broker himself -- leading him to start his own investment firm by the age of 25.
A wealth of opportunities await you
There is no limit to what people can accomplish when they understand how the stock market works and how companies make money. Rogers' stock market savviness led him to billions. Now, at age 62, he continues to share his financial wisdom with media outlets all over the world as chairman, co-CEO, and chief investment officer of Ariel Investments -- a firm that manages over $11 billion in assets.
The opportunities haven't stopped there. Rogers has been in rooms that many could only imagine. He's a member of the board of directors for popular publicly traded companies, including McDonald's (NYSE:MCD), Nike (NYSE:NKE), and The New York Times (NYSE:NYT).
Imagine giving someone a stock and they become so fluent in that company's business model that they become a part of an elite group of individuals who provide company oversight. It's also worth noting that the board of directors is responsible for setting the dividend policies -- a task that enables investors to receive an extra stream of income in their accounts throughout the year!
A gift that lasts forever
Investing in the stock market is one of the greatest and simplest ways to build wealth. But what's even more appealing than the monetary boost you receive from investing is the amount of patience you gain during the process. Patience is a gift that comes with a disciplined, long-term approach to investing.
Rogers' early years of investing in the stock market taught him the power of patience -- especially when he started seeing more dividend income the longer he held his stocks in his portfolio. He's often quoted for telling his business partner, Mellody Hobson, this valuable piece of advice when she started her career: "People undervalue time and they overvalue money."
While many people cross their fingers hoping for the winning numbers to achieve their fortune, the stock market has proven to be a rewarding wealth-building tool over time. It's tempting to chase after the large stocks that can produce a quick return, but Rogers focuses on undervalued small- and mid-cap companies that have a chance to blossom. He believes that every game is won with patience, and this belief has helped him achieve success for himself and others.
A simple way to buy stocks as gifts
If you've been wanting to buy stocks as gifts but have no idea how to get started, you can use an online brokerage like Stockpile. This website allows you to purchase a gift card that is redeemable for stock -- no account is required to give a gift. You can also open a custodial account for kids and buy fractional shares of stock.
There are other options that allow you to buy stocks as gifts, but the best thing you can do is get started now, so that your loved ones can enjoy the lifetime benefits that come with investing in the stock market.