3 of My Favorite Stockpile Features

It’s no secret, I love Stockpile. It’s my favorite new company/app that’s tak­ing on the old-school world of invest­ing. I use Stockpile. I use Stockpile for my kids. I use Stockpile to help peo­ple who read my free email course, Money Making Money, to get start­ed invest­ing.

I’ve writ­ten a review of Stockpile in the past, so no need to go into every fea­ture. However, now that I’ve been using it for a while (and got­ten a lot of feed­back from my read­ers), I thought I’d share the three things that I believe they’re real­ly doing that are inno­v­a­tive.

If these three things res­onate with you, you’ll prob­a­bly enjoy Stockpile as much as I do.

Let me share the three fea­tures, who they apply to, and who they don’t.

1. Cost

When con­sid­er­ing cost, you have to con­sid­er two things:

  1. Are you a trad­er or an investor?
  2. How much are you invest­ing?

Briefly, there are two ways to invest — you can trade or you can invest. (I know, I used the same word twice, to mean two dif­fer­ent ways. Sorry.) Traders try to time the mar­ket by buy­ing low and sell­ing high over short peri­ods of time. Investors have a longer time hori­zon and fol­low a buy-and-hold prac­tice. That is, they buy a com­pa­ny and hold onto it for a while.

If you’re trad­ing, you’re going to be pay­ing atten­tion to the mar­ket all the time and like­ly have a lot of trades. Traders are bet­ter off with Robinhood. Robinhood offers advanced prod­ucts (stock options), puts trades through instant­ly, and has zero com­mis­sions.

While Robinhood is designed to be a bet­ter bro­ker­age, Stockpile is specif­i­cal­ly-designed for those who invest. Those who buy-and-hold, and accu­mu­late over time. This is an impor­tant dis­tinc­tion, espe­cial­ly for those new to invest­ing and con­fused by the media turn­ing trad­ing into a com­pet­i­tive sport.

If you’re buy­ing-and-hold­ing, espe­cial­ly if you’re not invest­ing a lot of mon­ey, Stockpile is bet­ter for you. Stockpile allows you to rein­vest div­i­dends and let’s you get start­ed by buy­ing stock in small­er amounts — as lit­tle as $10 — and invest­ing reg­u­lar­ly (I put in $100/month auto­mat­i­cal­ly).

To do this, you have a trad­ing cost of $0.99 (slight­ly more if you buy using a cred­it card). There are no month­ly fees (like Stash has; I love what Stash are doing, but for dif­fer­ent rea­sons). If you buy a stock and hold some­thing for ten years, you pay only that one com­mis­sion of $0.99.

.@Stockpile is democ­ra­tiz­ing invest­ing by break­ing down the bar­ri­ers to get­ting start­ed; incred­i­ble cus­to­di­al accounts matched with frac­tion­al shares lets any­one get start­ed on the path to build­ing a wealthy future. Click To Tweet

While peo­ple good at arith­metic might point out that if you pay $0.99 and invest $10, you’re pay­ing a 10% com­mis­sion. They’d be right, but con­sid­er­ing that there aren’t alter­na­tives that allow you to invest for only $10, it’s the “best” way to get start­ed. Especially if you’re teach­ing kids about invest­ing… you can con­sid­er the com­mis­sion the cost of the edu­ca­tion rather than the cost of the invest­ment. Measuring your suc­cess is all about per­spec­tive.

Of course, it’s not all about cost. Cost is only one aspect, and from a cost per­spec­tive Stockpile is extreme­ly com­pet­i­tive and removes the bar­ri­er to get­ting start­ed.

2. Fractional Shares

This is a real­ly impor­tant fea­ture for peo­ple who are just get­ting start­ed, for parents/grandparents who want to teach their kids about invest­ing, or peo­ple who just aren’t that wealthy but want to build a wealthy future.

Let’s con­sid­er some of the high-priced tech­nol­o­gy stocks. For a buy-and-hold investor, it’s use­ful to con­sid­er these stocks since tech­nol­o­gy still rep­re­sents some of the best growth oppor­tu­ni­ty. If you’ve looked at these stocks recent­ly — Apple is about $165/share and Amazon is about $1,600/share — they feel expen­sive. (You can’t judge a stock pure­ly on it’s price to decide if it’s expen­sive, but that’s anoth­er tan­gent I’m not will­ing to go down at the moment.)

If you want to par­tic­i­pate in Amazon’s growth with a tra­di­tion­al bro­ker­age or a com­pa­ny like Robinhood you have to come up with at least $1,600 and do so in mul­ti­ples of that num­ber because you can only buy whole shares. For Apple, you need to invest in mul­ti­ples of $165. If you have $100 to invest, you’d have to find oth­er com­pa­nies.

With Stockpile you buy into com­pa­nies in dol­lar amounts. If you have $10 to invest, you can buy $10 of Amazon, or Apple, or Tesla. If you have $100, you can split it into 5 pur­chas­es of $20 into sep­a­rate com­pa­nies. You don’t have to find a com­pa­ny that’s share price is low­er than the amount you have to invest.

Of course, that also means all your mon­ey will be work­ing for you. Say you have $100 and you find a com­pa­ny whose stock costs $75/share. You’d only be able to invest $75 with a tra­di­tion­al bro­ker­age or Robinhood because you’d have to buy one whole share, and have $25 left over (in our exam­ple). With Stockpile you can invest all $100 because they’d allow you to buy 1 1/3 shares.

Fractional shares are the most impor­tant (in my opin­ion) fea­ture to enable any­one to get start­ed invest­ing. It tru­ly opens up the stock mar­ket to kids, begin­ners, and peo­ple who don’t have a lot to invest but want to par­tic­i­pate in the growth pos­si­bil­i­ties. It’s so impor­tant, because peo­ple can buy the com­pa­nies they’re inter­est­ed in… the inter­est will keep peo­ple engaged and learn­ing.

Fractional shares are impor­tant because peo­ple can buy the stocks they’re inter­est­ed in regard­less of stock price. Interest will then dri­ve edu­ca­tion. (@stockpile) Click To Tweet

If you are afraid that own­ing just a frac­tion­al share of a com­pa­ny isn’t worth it… con­sid­er that if some­thing goes up 10%, it doesn’t mat­ter how much you own. Whatever you have will also go up 10%. If you can afford 100 shares of Amazon, great! Congratulations. But if all you can get start­ed with is $100, Stockpile enables you to par­tic­i­pate in that 10% growth! That’s tru­ly equal access.

Stockpile is for you if you are just get­ting start­ed, or don’t have a lot to invest because you’re not lim­it­ed to the com­pa­nies you can buy only because you don’t have a lot of mon­ey.

I often hear that the tech stocks are “expen­sive.” It’s the wrong word. If two equal items cost dif­fer­ent amounts, the one that’s high­er priced is expen­sive. Just because some­thing has a high price, doesn’t mean it’s expen­sive, it just means it costs a lot. If you’re not buy­ing into a tech com­pa­ny because it costs a lot, per­haps you’d con­sid­er buy­ing in at a low­er amount? If so, Stockpile is also for you.

3. Custodial Accounts

Stockpile custodial tweet

I start­ed invest­ing before I was old enough to open my own account. Depending on the (US) state, cus­to­di­an accounts are required up to 18 or 21 years of age. It means there’s an adult in con­trol in the child’s name.

This has always been pos­si­ble in reg­u­lar accounts. In my book I talk about direct share pur­chas­es from com­pa­nies, and the com­pa­nies that run these have always enabled cus­to­di­al accounts. However, their online access doesn’t inte­grate the cus­to­di­al capa­bil­i­ties into the accounts. Meaning, a child would have to use their custodian’s cre­den­tials to login, and then they’d have full access to trad­ing; when the whole point of a cus­to­di­an is that the adult is in charge.

Stockpile does for stock invest­ing what Apple has done with Family Sharing.

.@Stockpile has done for invest­ing what Apple has done with Family Sharing. Click To Tweet

A cus­to­di­al account knows it’s a lim­it­ed account. The kids can explore on their own, but they need approval to trade.

Certainly not every­one needs this capa­bil­i­ty. Maybe you don’t have kids. However, maybe you know some? Because of my love of invest­ing, I would often gift stocks for bap­tisms, bar-mitzvah’s, and oth­er mile­stone gifts. But the old way, buy­ing stock direct­ly from com­pa­nies, there usu­al­ly was a $250 min­i­mum. With Stockpile, it’s easy to give a “reg­u­lar sized” gift using their inno­v­a­tive gift cards. Where I would have to call the par­ents, get social secu­ri­ty num­bers for both par­ent and child in order to give a gift of stock, you can buy a gift card and it couldn’t be eas­i­er.

Wouldn’t you think, what bet­ter gift than a wealthy finan­cial future?

Money Making Money

I wrote a free email course specif­i­cal­ly for peo­ple who want to get start­ed invest­ing. In it, I will teach you how to get start­ed with as lit­tle as $10 using Stockpile, and then walk you through my unique met­rics designed for you to have fun and stay moti­vat­ed to build a healthy invest­ing habit.

Course atten­dees can down­load a spread­sheet tem­plate that I’ve cre­at­ed to high­light these met­rics. I even share a tuto­r­i­al that you can use to set­up your own track­er.

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