Graduation gifts that keep giving after
the ceremony -- Page 2
Books don't grow on trees
Textbooks add hundreds of dollars to a student's bill every
year. A gift certificate in any amount for the campus bookstore
lessens this heavy higher-education load.
Welcome to the real world
Tucked among all those high school graduation announcements,
you might find one or two from students finishing up college. These
grads, faced with the looming closure of the Bank of Mom and Dad
and a job hunt ahead, have a lean and hungry look. Now is the time
to give gifts that will grow.
When Matt Kelton graduated with a degree in English
literature from Texas Christian University, his parents offered
him a choice: Help with law school tuition or a ColorTyme Rent-to-Own
franchise fee. After much soul searching, he took the franchise
fee and opened a store with the idea that he'd make enough to pay
for law school. Four years later, he owned two stores, which he
sold for enough to buy a franchise he liked better.
Seventeen years later, he's president of Computer
Renaissance, a national retail franchise firm that buys, sells and
trades new and refurbished computers. Law school is the last thing
on his mind. Would he give his own two children the same gift?
"It was good for me. I learned a lot about running
a business and selling. But if you don't work hard enough, you can
really lose everything," he says. "It depends on the kid."
Not equipped to help a new college grad in a business
startup venture? Then consider these less life-changing, but equally
welcome, college-grad gift possibilities.
It's a time-honored college graduation gift. Whether the vehicle's
new or used, it will be appreciated. You don't have to foot the
full auto cost. Offering to make the first year's worth of payments
or paying for insurance coverage is a gift that will help a new
workforce member get on his or her feet.
Zero coupon bonds
For students bound for graduate school, a zero-coupon bond
that matures as tuition comes due will help ensure that the student
can make the payment. "Most people are consumed with school
and don't have time to monitor more sophisticated investments,"
says Tirrell Paxton, an attorney and CPA, who worked his way through
University of Michigan Law School. "That's why zeros are good."
A $3,000 contribution to a Roth individual retirement account,
where earnings grow tax-free, can produce a tidy sum if left untouched
until the student is ready for the rocking chair. Paxton recommends
investing the gift in an indexed mutual fund because index funds
are lower risk and don't require a lot of investor maintenance.
Not sure a retirement account really conveys your
heartfelt congratulatory sentiments? Then consider this: If that
three grand earns 8 percent a year, it will be worth about $100,000
by the time the student exits the work force at age 67. Now, that's
a heck of a gift.
Jennie L. Phipps is a contributing
editor based in Michigan.