In the online world of robo-advisors and spare change investing apps, Stash is an investing app that is trying to stand apart by packaging investments based on values and interests. But is that very millennial-friendly approach worth your time and money?
Whenever I talk to people my age who haven’t started investing, I get a few different reasons, like…
- I don’t feel like I’ve got enough money to make a substantial investment.
- Investing sounds really confusing.
- I don’t know how I would pick my investments.
Those are all great concerns, and what I like about Stash is that they’ve come up with a solution for each of them…
- Stash lets you start investing with as little as $5.
- Stash has an incredibly easy to use app that walks you through each step of the investing process.
- Stash offers themed ETFs, so you can invest in areas and companies whose goals and ideals match your own.
That last point is really what sets Stash apart from other micro-investing apps like Acorns. It’s part values-based investing and part choosing investments based on what you geek out over.
Stash’s goal is to make investing approachable for beginners, but let’s take a closer look to see whether or not investing with Stash is worth it.
What is Stash?
Stash is one of a dozen or so apps that lets you invest from your pocket (smartphone). I’ve already said this, but what makes it so different from some of its competitors is that Stash makes it really easy to put your money where your values are, and I’m going to get into this a little farther down.
Stash has three different plans:
- Wealth Builder $3 per month- Includes retirement account, personal account, unlimited trades, unlimited education, and financial coaching
- Long-Term $2 per month (free if you’re under 25)– Includes retirement account, unlimited trades, unlimited education, and financial coaching
- Starter $1 per month– Includes personal account, unlimited trades, unlimited education, and financial coaching
To sum that up, the Wealth Builder plan has it all, the Long-Term plan is for retirement savings, and the Starter plan is for getting your feet wet with investing.
With each of those accounts, you can invest in micro-shares of stocks and ETFs. To purchase a share of a stock or ETF, you click the “Add to Portfolio” button, and pick the amount, as little as $5.
Stash is a little like Acorns and Digit
If you’re familiar with Acorns – it’s known for rounding up transactions and investing the change – Stash gives you the same spare change investing option. Or, if you like the idea of Digit – using algorithms to get to know your spending, then investing the perfect amount for you – Stash can do that too.
Learn more about Acorns at Acorns 2019 Review.
Stash calls these Round-Ups and Smart Stash, and you can opt-in to these when you’re signing up and building your account.
All of these options, including the type of plan you have can be changed later on.
Signing up with Stash
When you sign up for Stash, you’ll have to provide them with the following information:
- Name and birthday
- Social security number
- Annual income
- Net worth
It’s the same information you’ll be asked for when you invest with anyone.
Then you get to pick your risk tolerance (conservative, moderate, or aggressive). Each ETF and stock lists the risk level so you can see how it matches with your goals. You also pick different issues that you feel strongly about so that Stash can find good matches for you, but you can still see and invest in everything they offer.
Where Stash shines
The app is designed really, really well
This is always a big one for me – if an app isn’t intuitive, I’m just not going to use it. There are just too many choices out there to stick with a piece of technology that doesn’t work well. Stash’s app is intuitive and engaging. It’s so good that I ended up spending a decent amount of time getting lost in the app – there’s just a lot of interesting stuff to see and read.
Stash focuses on personal choice
To attract millennial investors, Stash lets you choose investments based on values and interests. They do this by sort of rebranding existing ETFs with new names, like:
- American Innovators (U.S. based tech companies) is the Stash name for Vanguard Information Technology ETF, ticker symbol VGT
- Clean & Green (companies with clean and renewable energy) is the Stash name for the iShares Global Clean Energy ETF, ticker symbol ICLN
- Women Who Lead (female-focused companies, leadership and charitable work) is the Stash name for SPDR SSGA Gender Diversity Index ETF, ticker symbol SHE
- All That Glitters (precious metals) is the Stash name for Aberdeen Standard Physical Precious Metals Basket Shares ETF, ticker symbol GLTR
- Do the Right Thing (companies who focus on positive environmental, social, and/or governance impact) is the Stash name for iShares MSCI USA ESG Select Fund, ticker symbol SUSA
Stash lists which assets are in each ETF and makes it really easy to find information on each, which brings me to my next point…
Stash teaches you how to invest
What I mean is that Stash shows you what information you should be looking at when making your investments. With each ETF or stock, it’s really easy to find the following information:
- Dividend Yield
- Expense ratio
Stash also has a button that will take you to the website for each individual stock or ETF, which is where you can research each asset even more.
Then there is the Learn tab, which covers introductory level investment topics. The articles are short and to the point.
Where Stash could improve
Choice can get expensive
Overall, Stash offers a nice mix of ETFs with low to high expense ratios (low allows you to save more). However, many of those niche choices run higher than what many other robo-advisors offers, which is typically low-cost Vanguard funds.
What is an expense ratio?
An expense ratio is an annual cost of investing, with the average expense ratio at 0.44%. So, for every $1,000 invested at 0.44%, you’ll pay $4.40 annually. $440 for every $10,000, and so on.
You’re ideally going to end up with tens and hundreds of thousands of dollars invested – what makes retirement happen. But, say that the majority of your investments are tied up in funds with higher expense ratios when you reach $1 million, you could be spending thousands more each year on your investments than you should or could be.
The likelihood of this happening is probably pretty slim because you’ll work on diversifying and moving things around as you age. But if we’re going to say that starting to invest when you’re young is a positive thing, then logically you’d want to pay attention to costs early on too.
Maybe a way to rectify this would be if Stash offered a little information about how the expense ratio affects your earnings before you actually purchase those micro-shares.
The subscription fee is steep
During the sign-up process, you get to choose between the three plans I listed early on in this Stash review. You see the monthly cost of each ($1, $2, or $3) and that’s really it.
A buck might not feel like a ton, but if you consider that you might only have $50 invested at first, $1 is high. And for the IRA option, $2 a month is pretty awful considering that many brokerages waive fees for retirement accounts, like:
- Charles Schwab
- Ally Investing
- D. Ameritrade
With a Stash balance of $5,000 or more, the fee structure changes to 0.25% per year. Again, maybe that doesn’t sound like a ton, but Stash doesn’t have as many features as other comparably priced brokerages, who also do rebalancing and tax loss-harvesting.
Is investing with Stash worth it?
I want to revisit the idea of investing in your interests or values because this is probably what’s going to make Stash work for you or not.
Stash isn’t full blown values-based investing, which is when you invest in companies who exemplify your social, environmental, or governance beliefs. You may also hear it referred to as socially-responsible investing. USA Today reported that 9 out of 10 millennials are interested in this kind of investment strategy, with over 50% of millennials already investing this way.
Stash does make it a little easier to have a strategy like that, but they also help you curate a portfolio that reflects what makes you excited, from things like artificial intelligence to cannabis.
The potential downside of this is that because you’re not as focused on growth, you can end up leaving a lot of great investments on the table, ones that might earn you more. As long as you know that going forward, you can weigh up the differences and make the right choice for you.
Who is Stash good for?
All in all, Stash has a really easy to use platform that makes investing interesting and approachable. All of those carefully curated ETFs show you that you can back your beliefs with cash. They have a decent amount of educational content too.
Add all of those things up and Stash is an intuitive investment app that’s good for beginners.
- With automated deposits, you can get into a habit of investing.
- The focus on small deposits shows you that you don’t need a ton of money to start investing.
- Stash’s millennial-friendly collection of ETFs can make investing exciting.
When you get more comfortable, doing your own research and routinely making contributions, then leaving Stash for a brokerage with lower fees is going to be to your advantage. There aren’t any fees to close your account or transfer funds.
2019 Stash Review: Final word
For millennial investors, the hardest part is getting started. Which brokerage should you use? Stocks or ETFs? What about strategy? Stash uncomplicates all of that. It lets you try things out and see how easy investing is really is.
Despite the fees, I think Stash really could be a good way for new investors to get started. And that’s key – just get started. Even if you’re currently focusing on destroying debt, investing now will help you prepare for the future.
And if you need to increase your earnings to make investing and debt pay off a reality, I will always recommend starting a side hustle. Running Facebook ads for small businesses is my personal favorite (what I did after quitting my teaching job to blog full-time). You can earn around $1,000-$1,500 per month with each client, and you can learn all about it on the Facebook Side Hustle Course.