What do you get when you cross the world of gift cards with directly owning fractional shares of stocks? Stockpile Inc., a startup that will be selling shares of your favorite companies alongside gift cards at locations like grocery stores just in time for holiday shoppers.
Pick up a few bags of chips…and some stock!
Stockpile will eventually offer stock from hundreds of companies. But for now, they’re getting this operation off the ground by just offering a little less than 2 dozen choices: Coca-Cola Co. , Facebook Inc., Apple Inc. and Berkshire Hathaway Inc. are among the most popular.
Now the more important question: Is it a good idea to buy stock via a gift card like this?
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Well, first let me say a few general words about gift cards. First things first: Gift cards have always frustrated me. You take real U.S. money that can be spent anywhere and turn it into money that can only be spent at an individual store. It’s like taking $1 of real money and turning it into a piece of plastic that is an IOU, a promise that you can redeem it down the road.
The only good time to buy a gift card is when you get more in value than what you pay. Maybe you pay $80 for $100 in value a t a restaurant, as just one example.
Some of the worst kinds of gift cards out there are general purpose ones, where you get a prepaid card that may have a Visa or MasterCard logo…but you pay surcharge of something like $4.95. Bad idea. Cash is a worthy substitute if you want to give a gift.
As for this particular offering from Stockpile, there’s no question it is inefficient financially. You have to pay $5 beyond the face amount. Bad idea. But I love the idea of creating an investor at a young age.
So much of modern America is about consumption. What Stockpile offers is a twist on gift cards that shows wealth flows to owners, not consumers. I’m not a big idea of small investors owning individual stocks, but if this is what it takes to create that interest especially among young people, I love it!
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