I’ve gotten a few versions of the question “Is Stash legitimate?” via email from readers. I thought I’d share my answer more generally.
Stash investment options
What you buy from Stash are either ETFs (Exchange Traded Funds) or Stocks. When you buy them, Apex Clearing acts as the brokerage.
This is a pretty typical arrangement, though often behind the scenes. Smaller companies that want to offer services can’t afford (for reasons that often don’t involve only money) to build their own. They look to a service provider that either connects “on the back end” or for which they can white label (take and brand as their own).
Apex Clearing is an established company and “back end” for a number of firms that offer brokerage services like trading and clearing. Think of them as a brokerage platform for other brokerages (or innovative investing apps like Stash Invest).
In short, were anything to happen to Stash you’d still own your investments. The investments you hold are not in any way dependent upon Stash Invest’s survival as a going concern.
Stash Invest as a going concern
That said, it’s nice to know you’re investing with a company that will survive.
I’ve spoken recently to the Stash Invest CEO myself. We had a brief, but energetic conversation. We both believe in the importance of getting people to save more, to build long-term wealth. He’s committed to Stash and brings a lot of relevant experience to creating a success.
The idea that most American families couldn’t survive even a minor financial disruption creates an urgency for what we’re each doing (Stash Invest with their app, and me with my book & financial education activities).
Stash is well funded, generates revenues from their customers, and, if my web analytics are any measure, growing in popularity.
I have about $250 invested with Stash. Mostly because as a “feeler” I need to use something in order to absorb what it’s about. I have a similar amount invested in the Robinhood App for a similar reason.
The most unique thing about Stash is the way it communicates the investment opportunities.
I often joke that traditional financial companies are like Americans traveling overseas. When Americans confront non-English speakers, they simply talk slower and louder as if slower-and-louder magically makes English (or investing) understandable.
Stash communicates the value of an investment differently, thereby helping people relate more to the thing they’re investing in. Since Stashers are focused on long-term investing (wealth building), not trading, it’s ok to build a relationship with an investment. That relationship will ensure that people stick to their financial goals over a longer period of time.
For example, I’ve invested in “Delicious Dividends” and “Roll with Buffett”. If you were to invest in Delicious Dividends at a regular brokerage you’d have to buy a Schwab fund called “US Dividend Equity ETF”.
Which is easier to relate to ‘delicious dividends’ or ‘US Dividend Equity ETF’?
This is exactly why Stash is going to be successful. There’s a huge gap in current financial offerings and people’s comfort investing. Today’s financial product sellers expect customers to bridge that gap, whereas Stash bridges the gap for customers by making the investments themselves more accessible with simpler, more relatable language.
This is great for Stashers, because they’re not buying some proprietary (and risky) investment product. Stashers are buying the same products that anyone else buys, they’re just experiencing those products through different language.
Getting started with Stash
Stash will give you $5 to get started so you can explore the app yourself. I recommend setting auto-stash too — auto-stash allows you to automatically set aside a little money on a regular schedule.
I have auto-stash set to invest $20 a month in Delicious Dividends. In keeping with my Elephant’s Paycheck metrics, investing $20 a month in Delicious Dividends increases the paycheck I receive from my portfolio.
Not only am I building wealth for my family’s future by putting away a little bit each month, I get a raise each and every month I stick with my plan.
What are you waiting for? Let’s get started.
Disclosure: The links in this post are affiliate links. That means if you decide to invest with Stash I get paid. My integrity is worth more than any affiliate payment — I recommend Stash because it’s commendable not because it’s commissionable.