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Jun.19
7:13 PM ET
Friday, 19 Jun 2009
The Perfect Portfolio for Your Kids

Parents interested in teaching their kids about money should bypass the savings account, Cramer said Friday, and open a brokerage account. Investing is the best way to accumulate wealth, so they should know it’s done.

In honor of his “Mad Money: It’s a Family Affair” special, Cramer pulled together a portfolio of five stocks that worked both as long-term investments and as a way to get kids interested in the markets: McDonald’s, The Walt Disney Co., Hasbro, VF Corp. and Apple.

What kid doesn’t love McDonald’s [MCD  Loading...      ()   ]? They will also learn to love the company’s management, international growth and 3.4% dividend yield. And the yield, which pays out much more than any savings account right now, will teach young investors about the value of compounding reinvested dividends.

Disney [DIS  Loading...      ()   ], with its theme parks and Pixar films, is every kid’s favorite as well. Robert Iger has proved himself a great CEO, and the longevity of Disney’s brand make this a stock that could be owned for years.

Cramer learned a lot about what he knows of money from Monopoly, which is made by Hasbro [HAS  Loading...      ()   ]. This company also works for a children’s portfolio, as it is a consistent grower and the stock is cheap.

While kids may know the Gap, and frequently wear the apparel maker’s clothes, Cramer thinks VF Corp. [VFC  Loading...      ()   ] is a better stock to own. Owner of North Face and other popular brands, VF is a better business.

Lastly, Cramer urged viewers to buy their kids some Apple [AAPL  Loading...      ()   ]. After all, it’s only a matter of time before you’re buying them their first iPod – or iPhone. And this company is at the center of a secular growth trend – smartphones and mobile Internet – that should generate returns for at least the next few years.











Cramer's charitable trust owns VF Corp.

Call Cramer: 1-800-743-CNBC

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