Make your child £100,000 for less than the cost of an Xbox
Investing in a basket of shares of toy manufacturing companies at Christmas time could prove to be the ultimate gift for a child's future - potentially making them around £100,000, according to financial website The Motley Fool - Fool.co.uk.
Analysis of the decade's ‘Top Christmas Toys' makers reveals that if parents fill their shopping basket with a selection of these companies, and continue to invest in them each year then they could reap the benefits of the 6.6% compound return these companies have generated collectively.
By not buying a Christmas present and instead investing £200 every year (the equivalent of an Xbox 360) until their child is 18, could see the money grow to £6,544. After 42 years, and even if no further money is invested, the pot could grow to £95,864. This could provide the child with a decent nest egg at retirement. Alternatively instead of a investing a lump sum, parents could opt to contribute just £17 a month or £4 a week.
Pass go and collect 157%
Hasbro, the maker of Beyblades, which was the top selling toy in 2002, is also behind the perennially popular board game Monopoly. It also makes Transformers and My Little Pony. Its shares have risen 157% since 2002, though the shares have only gained 54% since 2003.
The price is right
Shares in toy maker Mattel, which owns Fisher Price, have risen 33% since its Sesame Street Elmo Live hit the top toys Christmas list in 2008. The company, which was established in 1945, is also behind the ageless Barbie, Cabbage Patch Kids and Winnie the Pooh.
Tech toys
Apple Computer's iTouch, which was the top selling toy in 2007, has only seen a modest rise in its share price. It's only risen 4%, which equates to around 2% a year. Elsewhere, Sony, which is renowned for its Play Station 3, is the worst performing toy maker. Its shares have dropped 32% since the ubiquitous console was launched in 2006.
David Kuo, Director at The Motley Fool says: "Buying shares in a toy maker and explaining to your child that in doing so they own part of the toy company is a great way to teach them about money.
"Of course, there has to be a balance between the recreational needs of children and their long-term financial security. Consequently, you don't have to invest a hefty lump sum when you buy shares but instead drip the money in a little at a time.
"It is worth bearing in mind that buying the latest must-have toy for your children may bring a momentary smile to their faces. But investing in the shares of the makers of the toys could bring a grin that last into their old age.