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The holidays are a marvelous time to add to the learning tools of the savers and investors in your life. Better yet, buy an investment-oriented present for wanna-be savers and investors. Since financial education ought to start young, our gift suggestions begin with the under-five set and end with ideas for the taller people on your gift list.
For young children, a colorful piggy bank always entertains, especially when accompanied by a handful of pennies, nickels, dimes and quarters so that they can make the first deposits themselves. Little kids love coins.
"Bunny Money," a Max & Ruby picture book by Rosemary Wells, is a funny and entertaining cautionary tale about shopping that adults will enjoy reading aloud. "Bunny Money" is published by Dial Books for Young Readers and costs $14.99 in most bookstores.
For the 8 to 12 crowd, the "Kids' Money Book" by Neale S. Godfrey (Simon & Schuster Books for Young Readers) is an excellent illustrated encyclopedia on all things financial. Colorful and easy to read, it explains such mysteries as what happens to a check between the time you write it and it shows up back in your bank account, paid. In fact, some grown-up members of the household may want to secretly peek into the "Kids' Money Book" for simplified explanations of the more confusing financial transactions.
Buy a child a U.S. EE Savings Bond. The bond, which comes in denominations as low as $25, is priced at a discount to maturity. After it matures, the interest rate is linked to Treasury yields. If used to help pay for college, there will be no income tax on the savings bond when it is cashed in. If the bond is to be used for education purposes it must be issued in the name of the parents or guardian, though the child can be listed as the beneficiary. In addition to boosting their college fund, kids will get a lesson in how bonds work.
Now for the adults on your list, how about a Texas Instruments BA-35 solar calculator ($20.99 at Staples) and a copy of the book, "Buffettology" by Mary Buffett and David Clark (published by Rawson Associates, $27.50).The book doesn’t entirely represent Omaha billionaire Warren Buffett's way of investing but it still contains important investment guidelines, and the instructions on how to make maximum use of a financial calculator are terrific.
Another book, "Die Broke: A Radical, Four-Part Financial Plan" by Mark Levine and Stephen M. Pollan, introduces some unique ideas in this era of oversold financial products. For example, the authors suggest saving tons of money on estate planning by simply spending all your money before you die. If you really want to leave your children with something from your estate, start giving them annual tax-free gifts while you are alive, or take out a life insurance policy naming them as beneficiaries. Older people should keep working as long as possible, says Levine. It’s good for them, and it eases a lot of worry about saving millions for retirement. The authors poke holes in a number of other financial myths perpetuated by those who earn their living collecting lucrative fees on such products. "Die Broke" is published by Harperbusiness and costs $14 in paperback and $25 in hardback (a little less if you buy it at a discount bookstore).
Give a membership in the American Association of Individual Investors. For a $49 annual fee, the investor receives a primer of investment basics, a monthly magazine with truly objective investment advice and access to software packages that help investors locate and analyze desirable securities. As a nonprofit organization, AAII isn’t selling anything except good information. To check out the organization, go to its website, www.aaii.com. To buy a membership, call 1-800-428-2244 and ask for member services.
What not to buy: Be cautious about purchasing expensive investment tracking software. Often the same (or similar) software is available free from a bank or brokerage, and much of it is available gratis from an online service provider or can be downloaded from the Internet.
(Editor's Note: Janet Lowe is the author of 10 books, any of which would make a terrific Christmas gift. Lowe's latest books are "Bill Gates Speaks: Insight from the World's Greatest Entrepreneur" and "Oprah Winfrey Speaks: Insight from the World's Most Influential Voice." Both are published by John Wiley & Sons.)
Janet Lowe is author of several investment books, including "Value Investing Made Easy" (McGraw Hill) and "Warren Buffett Speaks" (John Wiley & Sons).
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