December 21, 2023

Gifting Investments as Gifts: Is it Worth it?

If you're looking for a unique and thoughtful gift, consider investing in your loved ones' futures. Gifting investments can allow your friends and family to benefit from the growth of various kinds of investments, including stocks, bonds, real estate, and more. No matter who you're trying to bless with a little extra financial security, there's an investment gift that will fit them perfectly.

Why Investing as a Gift is a Great Idea

As the holidays approach, many of us begin to think about what gifts to give our loved ones. While material possessions are always nice, sometimes it's more meaningful to give a gift that can last a lifetime. Investing as a gift is a great way to do just that.

There are many reasons why this is a great idea. For one, it shows that you care about the person's future and want to help them secure their financial future. It also shows you are willing to take the time to research and find an investment well suited for their individual needs.

Of course, there are some things to keep in mind when giving an investment as a gift, but if you choose wisely and do your research, this can be a great way to show your loved ones how much you care about them and their future.

The Various Types of Investment Gifts You Can Give

There are many different types of investment gifts you can give, depending on your goals and the recipient's needs. Cash is always a popular gift, but you can also give stocks, bonds, mutual funds, and other types of investments. Here are some of the most common types of investment gifts:

Cash Gifts

Investing in gift ideas can come in many different forms, one being cash gifts. Such gifts are often the most popular to give, due to their versatility and convenience. You can gift cash as a lump sum or establish a long-term payment plan if you want your gift to benefit the recipient over time.


Stocks are one of the most common gift investments, offering the recipient partial ownership in a corporation. Transferring stocks to someone as a gift can easily be done via their brokerage account; all that's needed is the stock symbol and the number of shares being gifted. And since stock prices fluctuate daily, gift recipients often find it exciting to see how their gift investment does over time!


Bonds are debt securities that pay periodic interest payments and these gift investments are easy to transfer to a recipient's brokerage account. Bond gifting is much simpler than other gift investment options, making it an attractive choice for those who aren't familiar with more complex forms of finance. Not only will the recipient receive regular income from their gift, but once the bond matures, they can reinvest it either in another bond or in anything they like.

Mutual Funds

By pooling together money from multiple investors, mutual funds offer a diversified way to enter the market. You can easily gift a mutual fund to someone else by transferring them to their brokerage account and they will have the ability to watch their investment grow over time. This gift is a reliable way to give a gift that will provide long-term financial value.

How Your Loved Ones Can Benefit From Gift Investments

  1. They'll have a nest egg to fall back on. No matter how well you plan, life can always throw unexpected curveballs. An investment gift can provide your loved ones with a financial cushion to fall back on in case of unforeseen circumstances.
  2. They'll be able to take advantage of compound interest. Compound interest is one of the most powerful tools in investing. By starting early, your loved ones will be able to take advantage of this tool and watch their money grow over time.
  3. They'll have peace of mind knowing they're prepared for the future. Investing can be a scary proposition, but it's one of the smartest things you can do for your financial future. They will appreciate the peace of mind that comes with knowing they're prepared for whatever the future may bring.
  4. They'll be able to pass on their wealth to future generations. Investing today can help ensure that your loved ones' wealth lasts for generations to come. Gift investments provide a sense of financial security that most other gifts can’t offer.

The Perfect Investment Gift for Every Friend or Family Member

When it comes to finding the perfect investment gift for a friend or family member, there are many things to consider. You want to find something that will be beneficial to them in the long run, but also something affordable and within your budget. There are many options out there, so it is important to do your research before making a final decision.

One option for an investment gift is to give them stock in a company that you think will do well in the future. This is a great way to help them grow their portfolio and potentially create a sense of financial security in the future. If you are not sure which stocks to buy, there are plenty of resources available online that can help you make an informed decision.

Choosing Stocks

Another option for an investment gift is to give them a piece of real estate. This could be something as simple as a vacant lot that they can build on in the future, or a rental property that they can use to generate income. This is a great way to help them get started in the world of real estate investing, and it can be a very profitable endeavor if done correctly.

No matter what route you decide to go with your investment gift, it is important to make sure that you put some thought into it. By gifting something that will be beneficial in the long run, you can rest assured that your friend or family member will thank you many times over.

How to Get Started With Gifting Investments

When it comes to gifting investments, there are a few things you should know before getting started.

Understand the different types of investments available. There are many different options out there, so it's important to do your research and find the best fit for your needs.

Another thing to consider when choosing a gifting investment is how hands-on you want to be. For example, some people prefer to simply write a check and let the recipient invest the money however they see fit. Others prefer to be more involved and help choose specific investments for the gift recipient. It's really up to you and what you're comfortable with.

Finally, it's important to remember that gifting investments should not be a short-term investment, but a long-term commitment. The investment gift you give will compound over time, so it's important to make sure the recipients understand this concept.

Investing as a gift is a great idea for many reasons. For one, it can be a very meaningful way to show your loved ones that you care about their future. It can also be a great way to help them reach their financial goals. There are many different types of investment gifts you can give, from stocks and bonds to mutual funds and ETFs. You can also give investment-related items such as financial planning software or books on investing. Whatever type of investment gift you choose, make sure it is something that your loved ones will appreciate and find useful.

What are the Tax Implications for Gift Investments?

Navigating the taxes associated with gift can be tricky, but with a proper plan in place, it can be easily achieved. There are two key tax implications to be aware of: the gift tax and the capital gains tax. Understanding these implications is important before gifting any large sums of money. The amount you are gifting could be subject to federal, state, and local taxes; plus, your recipient may need to pay capital gains taxes in the future if they sell the asset. Therefore, it’s best to speak to a tax advisor or financial adviser before making any substantial gifts to ensure your gift isn't subject to unnecessary taxes.

Gift Tax

There are various rules around gift tax, depending on both the size and type of gift given. Depending on the amount, one may not owe any gift tax at all but must still file extra paperwork when submitting income taxes. Gifts of cash, stocks, or property are all subject to the same guidelines and exclusions typically apply, meaning most Americans will not be affected by gift tax at all. For example, the exclusion amount for 2022 was $16,000 per donor per recipient; any gift above that amount would incur a gift tax rate of up to 40%. That is why it is important to understand these complexities and make sure you comply with the relevant laws.

Capital Gains Tax

Capital gains tax applies when you sell an investment product, such as stocks, bonds, or mutual funds in a non-retirement brokerage account. For example, let's say a family member gives you a certain number of shares in a company. The corporation has appreciated significantly since the initial purchase, and if you sold these shares on the stock market today, you would incur a capital gains tax. However, if the shares were gifted to you directly from this family member instead of being sold on the stock market, then no capital gains tax is owed by either you or the original shareholder. With that being said, any gains made from selling these shares at some point in the future will be subject to taxation due to capital gains tax law. This way both parties benefit: your relative avoids being subject to capital gains taxes while giving you the benefit of owning a valuable asset that can increase your wealth!

If you're looking for a unique and thoughtful gift, consider investing in your loved ones' futures. Gifting investments can allow your friends and family to benefit from the growth of various kinds of investments, including stocks, bonds, real estate, and more. No matter who you're trying to bless with a little extra financial security, there's an investment gift that will fit them perfectly. Need another gift idea?? Check out Brad’s book on living life to the fullest as a retiree!

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This page is a publication of Fiat Wealth Management, LLC. The firm is registered as an investment adviser and only conducts business in states where it is properly registered/notice filed or is excluded from registration requirements. Registration is not an endorsement of the firm by securities regulators and does not mean the adviser has achieved a specific level of skill or ability.

The information presented is believed to be current. It should not be viewed as personalized investment advice. All expressions of opinion reflect the judgment of the authors on the date of publication and may change in response to market conditions. You should consult with a professional advisor before implementing any strategies discussed. Content should not be viewed as an offer to buy or sell any of the securities mentioned or as legal or tax advice. You should always consult an attorney or tax professional regarding your specific legal or tax situation.

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