Stash is an app for both Android and iOS that was born out of the simple question: Why don’t more people invest their money? This seemingly simple question can have a myriad of answers depending on who you ask.
Stash tries to overcome these obstacles with a well-designed app that provides easily understood solutions without breaking the bank.
For many, the barrier for entry for investing in stocks can be incredibly high. Whether it’s high minimum investments or hefty fees, many people find that investing is not affordable. Moreover, it can also be incredibly confusing.
There’s a lot of jargon out there, and many people don’t know the difference between a stock and a bond, let alone how to read a stock ticker. The Stash app aims to solve both of these issues by making investing both affordable and accessible.
Intrigued? Keep reading to learn more.
Why is investing important?
Before we talk about why to invest with Stash, let’s briefly talk about why you should invest at all. Whether you know it or not, if you have a job, you are already likely investing a portion of your money.
Thanks to President Franklin D. Roosevelt, who signed the Social Security Act in 1935 following the Great Depression, a portion of our payroll tax is allocated towards securing retirement benefits. Both employees and employers contribute to this system, with each paying a percentage of an employee’s paycheck into Social Security to ensure future retirement benefits.
Social Security is designed as a safety net for the elderly and the disabled. It is relied upon by millions of Americans as a portion of income once reaching retirement age.
According to a study by the Economic Policy Institute, almost half of Americans have no retirement savings other than Social Security. Predictably, low-income families are disproportionately affected by this trend.
Due to an inability to afford to save money and a lack of understanding of investment options, a large portion of our population is unprepared for their future. But it doesn’t have to be this way, and Stash is on its way to bridging the investment gap in America.
What Stash Does Differently
While Stash Invest is not the only low fee, easy to use investment app on the market, they educate their customers and show them how to invest and save money. This app is not designed for the seasoned investor.
The premise is for Stash to provide you with access to exchange-traded funds (ETFs), which are investment funds that allow you to buy a portion of stocks through a portfolio.
Signing up for Stash is not as easy as just signing in with Facebook. One of the main complaints about the app in Google Play is the invasive information they request. This includes banking information, your address, and even your Social Security number.
While it’s not usually recommended to hand out this type of information to an app on your phone, Stash is bound by federal law, including the Patriot Act, to collect this information.
It is a necessary evil, unfortunately, but one mitigated by the fact that they use 256-bit encryption and your securities are protected up to $500,000. Additional security features include a PIN of your choosing that you must enter every time you open the app.
This is beneficial whether your phone is stolen or your toddler is button mashing your phone while playing angel investor.
Stash’s Key Features
- Minimum investment: $5
- Fees: As little as $1 per month if you choose the beginner plan
- Accounts offered: Traditional IRAs, Roth IRAs, checking account
- Other benefits: The mobile app is available on iOS and Android phones
- Promotions: You can get $5 for free for signing up with Stash
Understanding Pricing
Stash offers three different pricing models, depending on where you’re at in your investing journey. Here is a brief overview of each:
| PLAN | BEGINNER | GROWTH | STASH+ |
|---|---|---|---|
| Cost | $1 per month | $3 per month | $9 per month |
| Personal Investment Account | x | x | x |
| Debit Card | x | x | x |
| Rewards program | x | x | x |
| Online Resources | x | x | x |
| Tax Benefits | x | x | |
| Investment Account for Two Children | x | ||
| Exclusive Metal Debit Card with Cashback Rewards | x | ||
| Monthly Market Insights | x |
How Stash Works
When you first sign up for Stash, you’ll be asked about your investing style. You can choose from conservative, moderate, or aggressive. This helps tailor your portfolio options based on the amount of risk, and potential return, that is acceptable to you.
Determining your risk tolerance is only one way Stash helps you choose your investment strategy. Next, they’ll ask you how much and how often you’d like to invest. You can choose to invest as little as $5 at a time on a weekly, bi-weekly, or monthly schedule.
Knowledge is Power
While we know that you didn’t install Stash just for the articles, there is a wealth of knowledge to be found here. Under the “Learn” section of the drop-down menu are dozens of well-written articles designed to teach you how to invest. Stash is designed for the beginner, and these articles can show you the ins and outs of an investment strategy.
From “What’s a Capital Gain?” to “How to Invest Like an Activist,” Stash spends a great deal of time into turning you into an investment professional. Many people choose apps like Stash because of their simple-to-use nature, and set-it and leave-it design.
This is great for those dipping their toes in for the first time, but Stash realizes that you may want to be more than just a casual investor. Think of it as a bootcamp for the uninitiated.
Whether you want to learn what interest rate hikes mean to you or better understand certain investment portfolios, Stash allows you to invest your time to learn as well as your money to earn.
Stash Retire
While Stash has some heavy hitters behind it, it’s still only two years old and a bit of a one-trick pony.
However, Stash is now in the process of launching Stash Retire, which will add Roth IRAs into the mix. A Roth IRA is an individual retirement account that, as long as you meet certain criteria, is not taxed when you start to make withdrawals.
This option from Stash is still in development and while they appear to be reaching certain milestones, it is not yet available.
Still, it’s an indication that Stash is growing. Couple that with Stash’s latest funding round, which saw investment from PayPal co-founder Peter Thiel, it’s easy to assume that Stash is here to stay.
Stash Custodial
You can open a custodial investment account for kids under 18 years old. Stash Custodial can be used by the child once they reach adulthood, which can be anywhere between 18 and 25, depending on the state in which they live.
There’s no limit to your annual contributions, and it doesn’t have to be used for education. The money can be invested in stocks, bonds, mutual funds, and ETFs.
Who should invest with Stash?
Overall, Stash Invest is designed to help the would-be investor. If you have money sitting in a savings account or if you’re just starting to think about your future, Stash is a great place to start investing. They make it easy to put money into portfolios that are of interest to you. They are also adept at making the confusing world of finance and investing easy to understand.
With the inclusion of a plethora of articles designed to teach you about investing, it’s also a great place to learn. Use it not just to easily invest your money, but as a resource that allows you to grow your knowledge with your money.
Stash’s simplified fee structure can be a low gateway into the world of investing. Your first two months are free, and they only charge $1 per month up to $5,000 and .025% above that number.
This is pricey if you are just starting out. If you’re investing $5 per month, that’s 20% of your investment in the beginning. Stash can be a great option if you can get your balance higher before they start charging you fees.
Bottom Line
All in all, Stash is a great app for the beginning investor. There are certainly better options out there for people already familiar with investing, but with over half of Americans having no investment at all, it could be a great start for you.
Stash is also growing and beginning to offer more investment options such as Stash Retire, so they may grow with you. If not, use Stash as a learning tool and springboard into the heady world of investment finance.
