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I love the idea of a robo advisor. They allow those new to investing to get started without having to know all of the ins and outs. But the problem still lies with those people who want to get started investing but don’t have a lot of money to invest. These people only have a few dollars to invest. Is there a way for them to invest?
Yes! And it is called Stash.
Stash is a newer player to the brokerage world and they cater to those who only have $5 or $10 to invest at time. Now you might be thinking that $5 or $10 invested here and there won’t add up to much. But you would be wrong.
Thanks to compounding and time, any amount invested can grow into a large amount of money.
But is Stash the investing solution you need? In my detailed Stash review, I’ll show you why Stash is a great option for people who want to get started investing and who don’t have a lot of money to invest.
Let’s get started!
Summary Stash allows people with a small amount of money to get started investing. Their platform makes it simple to get started and the best part is they educate you along the way. It is definitely worth looking into if you want to get started with investing in the stock market. Click here to get $5 just for opening your account!
Stash Review Summary
Stash allows people with a small amount of money to get started investing. Their platform makes it simple to get started and the best part is they educate you along the way. It is definitely worth looking into if you want to get started with investing in the stock market. Click here to get $5 just for opening your account!
Table of Contents
My Detailed Stash Review
Who Is Stash?
Stash was started by two Wall Street veterans who wanted to simplify investing for people. They wanted to answer the question, “why don’t half of people invest”? So they left their jobs and started Stash in 2015. As of March 2018, Stash has over $318 million invested and close to 2 million users.
Using Stash is very similar to other online brokers. You simply download the app, fill out your profile, choose your investments, link your bank account, and confirm your identity.
From there, Stash will invest your money for you. To get started with Stash and get $5 for free, click here.
Here is a short video of the process.
The biggest difference between Stash and other online brokers is how they go about investing your money. Most robo-advisors have a set number of portfolios to invest in based on your risk tolerance and goals.
For the most part, these portfolios are weighted by stocks and bonds to varying degrees. But Stash does things a little different. They still ask you questions to determine your risk tolerance and goals, but they educate you about investing and offer a number of ETFs that fit your profile. Then you pick the funds you want to invest in. Overall, there are more than 40 ETFs to invest in as well as some individual stocks.
The ETFs Stash offers are renamed to make things more understandable to users. For example, you might not completely understand what a small cap ETF invests in. So Stash calls this ETF Small But Mighty. This makes it clear that you are investing in smaller companies that are growing in size.
All of the investments Stash offers are broken down into 3 main categories:
- I Believe: investments that are mission driven created for investors who want to invest with their hearts.
- I Want: investments that align with investors long term goals.
- I Like: investments in companies that investors like to do business with.
In the event you pick a handful of ETFs that do not offer you a good mix of diversification, the Stash Coach feature will offer up some educational content to help you better diversify your portfolio. This is just a fancy way of saying it helps you lower the riskiness of your investment portfolio.
Advantages To Stash
Stash is a great tool for those new to investing. Let’s look at the advantages it offers.
Easy to start. Stash makes getting started investing simple as can be. You can be investing in less than 5 minutes when you download the free app.
Low minimums. You can get started investing with Stash for as little as $5. And going forward, you can choose to invest with just $5 at a time. This makes it perfect for those who want to invest but don’t have $100 to invest at a time.
Smart Save. This features allows Stash to monitor your checking account and find small amounts of money they can transfer and invest from time to time. It runs a detailed algorithm and only moves a small amount of money when it knows it is safe to do so.
Fractional shares. With the ability to invest in fractional shares, your cash is invested for you at all times.
Good mix of ETFs. Stash offers ETFs from the leading providers, including Blackrock, Schwab, and Vanguard.
Account types. You can invest in retirement accounts like traditional or Roth IRAs, an individual taxable account, and a custodial account.
Milestones. The app offers you milestones when you reach certain investing levels. This is great to help keep you motivated to invest for the long term.
Education. Educating investors is why Stash started it does an amazing job teaching you investing principles in easy to understand terms. You start out investing without much knowledge and end up learning more than you thought possible. All this helps you to be a successful investor over the long term.
App layout. I love the look and feel of the app and navigating it simple and intuitive.
Calculator. Stash offers a calculator that you can play around with that lets you see the impact investing more money has on your balance over time, as well as at various returns.
To get started with Stash and get $5 for free, click here.
Disadvantages To Stash
Stash is not perfect and as a result, here are the shortcomings of the app.
Fees. This is only a negative in the beginning. Stash charges users $1 per month to have an account after the first month. When you are first starting out and don’t have a lot invested, $1 can be a large percent of your investment dollars.
Once your balance reaches $5,000 then Stash charges 0.25% annually, which is in line with what other online brokers charge.
No dividend reinvestment. When you are paid dividends, this money is placed in your cash account and then is invested for you when your cash balance hits the minimum level to invest.
Limited trading window. When you invest with Stash, any trades you place will be queued up until Stash places the trades during one of the daily trading windows. They place trades once in the morning and once in the afternoon.
For long term investors, this is not an issue. But for those looking to time the market, this is a deal breaker.
Market Timers. If your goal is to amass a large pile of cash and invest when the market drops, Stash isn’t for you. Since they invest your cash balance, you cannot build up a large pile of it. You would have to do this in a savings account and then transfer the money over.
Is Stash Safe?
I frequently get asked if Stash is safe. The simple answer is yes, investing with Stash is safe. Here is why.
First, they are registered with the Securities and Exchange Commission which oversees brokers. Second, they offer SIPC protection for your invested money.
Third, they use a third party as a holding agent for your shares called Apex Clearing Corp.
Finally there are no complaints against Stash using FINRA Broker Check.
When it comes to your personal information, Stash uses 256-bit bank-grade encryption to secure all your information. They also use Secure Sockets Layer (SSL) to ensure any information sent between the Stash app and their servers is protected.
The Stash app automatically logs you out of your account after a set period of time, so if you lose your phone, no one can get access to your Stash account without your pass code.
There are other online brokers out there, so I wanted to give you a detailed comparison between Stash and some others so you can make the best choice when it comes to investing your money.
Stash vs. Acorns: The main difference between Stash and Acorns is how you invest your money. With Stash, you set a regular investment and then the Smart Save feature will add some more money into your Stash account.
With Acorns, you mainly save by having Acorns round up your purchases and invest that amount. You also can set a regular recurring investment too, but it isn’t required. Finally, Acorns let’s you take advantage of their Found Money feature as well to boost your investment dollars.
You can sign up for Acorns here and get $5!
Stash vs. Robinhood: The main difference between these two options is that with Robinhood you are investing in stocks for free. You don’t get a diversified portfolio or the education that Stash offers you. But you can invest in stocks through fractional shares, which is a plus for investors without a lot of money to invest.
Stash vs. Betterment: Betterment offers the same approach as Stash but investors tend to have more money to invest. But you can invest with as little as $10 with Betterment on a regular basis.
Also with Betterment, you get a wealth of planning tools and access to a financial professional to help you with your investments too.
Finally, the fee for Betterment is 0.25%, so you save money early on compared to Stash when you balance is low.
Here is the link to get started with Betterment!
Stash vs. Stockpile: Stockpile, like Robinhood, is geared towards stock investors. Stockpile does charge $0.99 for a trade, which is a steal compared to most other online brokers. But you don’t get a diversified portfolio like you do with Stash.
However, Stockpile does a good job with educating investors like Stash does.
Click here to start investing with Stockpile!
Overall, Stash is a good option for investors just starting out and who don’t have a lot of money to invest. If you are intimidated by the stock market, Stash is for you. They make investing easy and simple to understand and you can get started building your financial future in less than 5 minutes.
While the fee they do charge is high at the start, it averages out for the online brokerage world when you build up your balance.
Because of this, I recommend you try to invest as much as you can at the start to build up your balance so that the fee is a small, more digestible part of your investment portfolio.
To get started with Stash and get $5 for free, click here.
I have over 15 years experience in the financial services industry and 20 years investing in the stock market. I have both my undergrad and graduate degrees in Finance, and am FINRA Series 65 licensed and have a Certificate in Financial Planning.
Visit my About Me page to learn more about me and why I am your trusted personal finance expert.