Stash review

 

Stash Investing App Review

Update April 4, 2016

I want to make sure read­ers see this fea­ture update announced today so I’m putting it here at the top (and to hell with SEO opti­miza­tion!).

Today, Stash Invest intro­duced “Auto-Stash”. It’s a way to auto­mate invest­ing small amounts reg­u­lar­ly. This is so impor­tant to build­ing wealth one-day at-a-time for mod­est investors.

What are you wait­ing for, grab $5 (that’s all you need to get start­ed) and go check it out! (iOS or Android). Heck Stash will even give you the $5 to help you get start­ed if you use this link to down­load the appWhat could be eas­ier?

Overall

Man if this is the future, I’m excit­ed. Stash is pleas­ing to the eye, approach­able, and very easy to get start­ed.

I think the thing I love most is how they posi­tion their pur­pose:

The Stash Way: Buy, hold, add.

Stash is designed for hold­ing invest­ments over the long term — not for fre­quent trad­ing. Why? It’s eas­ier to get it right. If you try to pre­dict whether an invest­ment will go up or down in the short term, there’s a good chance you’ll get it wrong. Long term invest­ing is also less stress­ful, since you don’t have to obsess over dai­ly or week­ly price fluc­tu­a­tions of your invest­ments. Over the long term, the mar­ket has grown about 10% per year*. So make some invest­ments, hold onto them, and make more invest­ments on a reg­u­lar basis. And remem­ber, every dol­lar you put toward grow­ing your Stash is a dol­lar you are sav­ing, and not spend­ing.

The @StashInvest way: Buy, Hold, Add #Investing #Retirement Click To Tweet

Pros

  • Encourages buy & hold
  • Easily, very eas­i­ly, invest small amounts reg­u­lar­ly
  • Low fees, and fees align to their core val­ue of buy, hold, add (I love when incen­tives are aligned, this is very impor­tant)
  • Well designed UI
  • Allows you to invest in align­ment to your val­ues
Let me explain a bit about that last point. Investing in align­ment to you val­ues is some­thing I’ve writ­ten about a lot on this blog, and is a cor­ner­stone con­cept of my book and free email course. I loved this first email I got from Stash describ­ing an invest­ment option. I could see it being a very pow­er­ful moti­va­tor for some­one who was inter­est­ed in start­ing to invest, but wasn’t sure where to start.

Defending America

Overall, Stash aligns very close­ly to the val­ues that I have for The Elephant in the Room has a Paycheck. Which is good, because they’re just two dif­fer­ent ways to get to the same place — finan­cial secu­ri­ty and fam­i­ly wealth.

Cons

  • They’re enabling only Mutual Funds & ETFs, no indi­vid­u­al stocks. I sus­pect it’s eas­ier for them to cre­ate a pro­duct around Funds and ETFs than indi­vid­u­al stocks, so com­plete­ly under­stand this lim­it. I prefer indi­vid­u­al stocks for a num­ber of rea­sons out­side the scope of this review. Though, for some­one just try­ing to get start­ed, this shouldn’t be a bar­ri­er to entry. Stash is not a good app for cre­at­ing an Elephant’s Paycheck port­fo­lio. Otherwise, go for it! If, like me, you prefer to buy indi­vid­u­al stocks — here’s $5 to get start­ed with Stockpile. Using Stockpile you can buy frac­tion­al shares and rein­vest div­i­dends, and even buy stocks for your kids and rel­a­tives and track them all in one place.
  • The only track­ing met­ric is port­fo­lio val­ue. Which is real­ly not a healthy way to build a reg­u­lar invest­ing habit (I’ll dis­cuss this in detail below). Users emo­tions get killed by expect­ed (and nor­mal) mar­ket volatil­i­ty. I just start­ed this week, and I’ve already lost $0.31 on my $20 invest­ment. Not a great expe­ri­ence and not moti­vat­ing for me to put anoth­er $20 into Stash. I’ve talked about what else to mea­sure and why in great detail on the blog and my book.
  • The app doesn’t work offline. If I want to check on my port­fo­lio sta­tus on my com­mute (NYC Subway) or air­plane, I’m out of luck. This is a pet peeve about bank­ing apps; and frankly, it shows poor care for expe­ri­ence that doesn’t endear me to the solu­tion.
  • Fee dis­clo­sure wasn’t very clear dur­ing the sign up process (though they are very clear in the FAQ).
  • Notifications are done via email, not mobile noti­fi­ca­tions (Apple Watch, hel­lo). There are noti­fi­ca­tions in app, but they don’t include all the noti­fi­ca­tions in email so now I’m get­ting more email that I don’t want, and noti­fi­ca­tions in the app that I have to dis­miss even though I’m get­ting them in email too. This should be eas­i­ly fix­able, if they have the pri­or­i­ty to do so. They’ve got to sup­port the Apple Watch, and do so prop­er­ly.

It’s not enough to make investing easy, it needs to be made motivating

Let’s con­sid­er the track­ing met­ric men­tioned in the sec­ond bul­let. I feel quite strong­ly that the peo­ple who under­stand the how’s and why’s of invest­ing need to com­mu­ni­cate dif­fer­ent­ly. I’ll share my thoughts about Stash though my per­son­al bias of chang­ing the invest­ing met­rics we track.

Stash Portfolio Screen

In the screen shot to the right, you see my loss. Forget that it’s just $0.30… I’m down over 1.5% on my first day. Boo! Not a very moti­vat­ing screen.

Can’t blame the Stash team of course, this is exact­ly what it would look like on your bank state­ment or what most advi­sors would tell you. Of course, this sort of account­ing is real­ly done for the IRS, and for some rea­son every­one has decid­ed to mea­sure the suc­cess of their port­fo­lios based on how much tax they owe.

Stash Screenshot

Stash Potential Screen

There’s anoth­er good screen though, on the tab called “poten­tial”. A sim­ple slid­er allows you to dream about the return you might get, and what impact it will have on your wealth.

The chal­lenge, from a moti­va­tion per­spec­tive is that any neg­a­tive rein­force­ment of the “how am I doing?” port­fo­lio screen is going to over­whelm the hope­ful feel­ings brought on the by the poten­tial shown on the poten­tial tab.

Let’s think about that in two parts.

The neg­a­tive rein­force­ment is pret­ty con­stant. The mar­ket is volatile. The volatil­i­ty makes it uncom­fort­able for investors to pay atten­tion to how they’re doing. Even great invest­ments spend a lot of time in the neg­a­tive column.

Why is this con­stant up-and-down, with a lot of down, a prob­lem for investors? Negative rein­force­ment has a big­ger effect on our per­cep­tion than pos­i­tive. Extrapolating from mar­riage and the ide­al praise-to-crit­i­cism ratio we can expect that investors need a pos­i­tive ‘up to down ratio’. That’s a lot to expect.

In order to real­ly rein­force pos­i­tive invest­ing behav­ior, Stash (and every­one) has to think out­side the box for met­rics to make investors feel good about their invest­ing habit. I feel very strong­ly about this “human ele­ment” of an invest­ing strat­e­gy and chang­ing people’s per­cep­tion about invest­ing.

I have cre­at­ed a free course that you might enjoy to help you have fun as you get start­ed invest­ing, and with met­rics designed to keep you moti­vat­ed to stick to you plan. Please check it out, I hope you’ll enjoy it:

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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A final word

While it looks like the list of cons is more thor­ough than the list of pros, don’t read into that too much. Stash is anoth­er way to accom­plish the same goals as the Elephant’s Paycheck. Stash is a sim­i­lar tra­di­tion­al invest­ing approach with­out most of the human aspects of the Elephant’s Paycheck Blueprint. Stash uses mod­ern tech­nol­o­gy to enable peo­ple to start mod­est­ly, build long term wealth, and most impor­tant­ly, invest in align­ment to their val­ues.

Fees

Since I felt that the fees weren’t dis­closed well enough in the sign up process, here you go:

$1/month, or 0.25% of bal­ance annu­al­ly (charged month­ly, cal­cu­lat­ed dai­ly) for bal­ances over $5,000 (at $5,000 that’s just over $1/month).

Who it’s for

Stash, like my book, is great for peo­ple just get­ting start­ed invest­ing, or peo­ple who want an easy way to put some­thing on auto­mat­ic and let it accu­mu­late.

As I said ear­lier, it’s not a good com­ple­men­tary app for Elephant’s Paycheck invest­ing. Though is a good way to diver­si­fy some of your hold­ing from indi­vid­u­al stocks (that I rec­om­mend for the Elephant’s Paycheck port­fo­lio) into funds.

The app itself doesn’t do any­thing to help you learn more about invest­ing to build mas­tery around your deci­sion mak­ing and habit. It would be great if each fund option linked to infor­ma­tion / news about the fund. Because they’re funds, they’re too abstract­ed from the indi­vid­u­al hold­ings to link to 10Q’s or quar­ter­ly con­fer­ence calls, so that you can learn about your invest­ments. I don’t believe funds have quar­ter­ly calls or the equiv­a­lent of 10Q fil­ings. (Two oth­er rea­sons I prefer indi­vid­u­al stocks.)

The app is also amaz­ing for peo­ple who want speci­fic invest­ments that align to their val­ues. I love their focus to this goal. I know it’s impor­tant.

What I bought

Maybe I should have a dis­clo­sure page on this site, but I don’t. Mostly because I don’t make invest­ing rec­om­men­da­tions (I’m not advis­ing, just edu­cat­ing). But for the review, I thought it would be fun to tell you what I did.

I have put $20 in a Berkshire Hathaway track­ing fund. Of course, as I was writ­ing this post I noticed that I lost $0.31 this week. You can see how by giv­ing me no oth­er way to describe my results, I’m forced to share some­thing neg­a­tive. To eval­u­ate my per­for­mance in a way that might dis­cour­age you to give it a try. A shame, because you should.

If you’re curi­ous how I track my per­for­mance, you’re going to want to have a look at this free email course on track­ing invest­ments for peo­ple who are just get­ting start­ed invest­ing (and may not be invest­ing very much to get start­ed):

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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I hope you like this review. I wel­come com­ments below and pri­vate mes­sages to dis­cuss.

If you enjoyed this review… read my Robinhood review too. You’ll like it, as you would my book. And don’t for­get to down­load Stash to give it a look. If you, like me, would rather buy indi­vid­u­al com­pa­nies (like Apple, Tesla, Google, or Snap, and more), try Stockpile. They’ll even give you $5 if you start with $10 or more. Read my Stockpile review here.

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.

Please note: I reserve the right to delete comments that are offensive or off-topic.

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17 thoughts on “Stash review

  1. Hello, this sounds entic­ing. Though I am liv­ing pay­check to pay­check. Is stash a good idea for some­one like me? I wor­ry about my future.

    • Hi Kay,

      Thanks for vis­it­ing. I wor­ry about my future too, so we have that in com­mon.

      Stash is real­ly good for cre­at­ing a reg­u­lar invest­ing habit, espe­cial­ly if you have only a small amount to invest. With Stash, you can invest a speci­fic dol­lar amount, with­out wor­ry­ing how many “shares” you buy. With oth­er apps that allow you to buy stocks, you have to buy “whole shares” and so if you are invest­ing small amounts, and can’t buy a whole share, you’re stuck.

      I feel, the best way to use Stash is to put away mon­ey on a reg­u­lar month­ly basis every sin­gle mon­th and let it accu­mu­late.

      One down side to Stash is the cost. It’s $1/month. That doesn’t sound like a lot, but if you’re invest­ing a small amount — say $10/month, that’s 10%. In oth­er words, in order to make up your fee, you have to grow your invest­ment by 10% (that’s a lot of growth). The way to think about this fee there­fore is not as a com­mis­sion, but as an oppor­tu­ni­ty to par­tic­i­pate in cre­at­ing a safer future. Without Stash, it’s hard to put away small amounts of mon­ey on a reg­u­lar basis.

      That said, I do dis­cuss anoth­er way to invest small amounts in my book (http://ElephantsPaycheck.com/book) often with­out any fee/commission. If you’re curi­ous, but aren’t sure about the book — check out this link to find out more: https://www-us.computershare.com/investor/3x/plans/planslist.asp?stype=all.

      Finally, if you’re liv­ing pay­check-to-pay­check, you may have to real­ly work to find even $10 or $25 a mon­th to put away for the future. Good luck. It’s dif­fi­cult, but reward­ing. Drop me a line if you’d like to dis­cuss more pri­vate­ly.

      David

  2. Thank you David for your thought­ful reply. As an Android user, I see that Stash Invest will be avail­able soon. I noticed the app Acorn and won­dered what your thoughts on this are. Thank you. 

    Kay

  3. Hi Kay,

    I have Acorn on my list of apps to review. I have heard good things, but no first hand expe­ri­ence yet. I’m still work­ing through my review of Robinhood.

    Thanks for the point about Android — I can be for­get­ful that the actu­al phone mat­ters, and I usu­al­ly just talk from my per­spec­tive and I use an iPhone.

    David

  4. David,
    Is Stash a bad idea for folks on dis­abil­i­ty. Becausei think any­thing you make would be count­ed as income. 

    Kay

  5. Hi Kay,

    I don’t know, you’d have to ask a dis­abil­i­ty con­sul­tant or per­haps a tax per­son. I will sug­gest that as invest­ment income, I would sus­pect it’s not the same as “work­ing”… but I have no expe­ri­ence to allow me to say that as any­thing but a spec­u­la­tion.

    David

    • Rather than income, it’s declared as cap­i­tal gains. I’m not sure on how it affects your sit­u­a­tion but you should take it into con­sid­er­a­tion.

  6. Hi Kay — For accounts over $5,000, you pay a fee of .25%, but I’d assume you’re also pay­ing the ETF fees on top of that, no? Above, your Defending America Portfolio shows an expense ratio of .43%. So, for that fund, you’re pay­ing .68% a year. Stash is prob­a­bly great for those who don’t have a lot to invest ini­tial­ly, but one might be bet­ter off with a free bro­ker­age account.

    Steve

    • Hi Steve,

      Really glad to have you par­tic­i­pate. You’re cor­rect math­e­mat­i­cal­ly (or at a min­i­mum, direc­tion­al­ly cor­rect in regards to over­all fees). However, a few things about Stash that I real­ly like that don’t nec­es­sar­i­ly com­pare to a pure math­e­mat­i­cal cal­cu­la­tion:

      1. With Stash, you can get start­ed with as lit­tle as $5. $5,000 is a lot of mon­ey for many, and just sav­ing that amount presents a pret­ty high bar­ri­er. For less than that, Stash charges $1/month. And, while that tech­ni­cal­ly goes again­st the over­all return (again, I agree with you), I think that there is a val­ue to be had for mak­ing things acces­si­ble for peo­ple who are mod­est investors. On one hand, you might feel that a com­pa­ny that does that is tak­ing even more than oth­ers from the peo­ple who can least afford it. On the oth­er, it’s a com­pa­ny who is adding val­ue by mak­ing invest­ing small amounts pos­si­ble, and that val­ue should be paid for. You can think of the $1 as “con­tin­u­ing edu­ca­tion” rather than as a “cost basis” expense if it helps to under­stand my point of view. If all the com­pa­ny was doing was mak­ing invest­ing avail­able to mod­est investors, per­haps I’d ful­ly agree with you — they’re tak­ing more from the peo­ple who can least afford it. (Though, tech­ni­cal­ly the ETF fees aren’t some­thing Stash is tak­ing, the point remains). Stash does more… point #2.

      2. Stash also, and this is real­ly impor­tant, breaks down bar­ri­ers to invest­ing by explain­ing things in plain English. This is so impor­tant. Because the com­pe­ti­tion is not a “free bro­ker­age” as you sug­gest, but is “not invest­ing”. “Not invest­ing” is not good for any­one. Stash is mak­ing invest­ing approach­able by let­ting peo­ple start with just $5 (point #1) but also by talk­ing in plain English and mak­ing it easy for peo­ple to under­stand what they’re doing which gives them the con­fi­dence that they can do it.

      I think many peo­ple under­es­ti­mate how scary it is to invest if you’ve nev­er invest­ed before; how off-putting the lan­guage around it is. It’s almost as if it’s designed to put fear into new­bie investors.

      One more thing I’d add — I’m a big fan of Robinhood. In fact, I gen­er­al­ly don’t like ETFs or Mutual Funds because they’re opaque (it’s hard to know what they’re up to) so for me, oth­er than the fact that Robinhood doesn’t sup­port div­i­dend rein­vest­ing, I’d per­son­al­ly prefer Robinhood over Stash. However, as I observe the Robinhood com­mu­ni­ty, it appears peo­ple use it to trade, not to invest. I’m a huge believ­ing in long term invest­ing and I share that with Stash. They’re on a focused mis­sion to help peo­ple build wealth, not gam­ble by trad­ing.

      I think it’s so impor­tant to build habits that help peo­ple (and fam­i­lies) to build gen­er­a­tional wealth, that I’m will­ing to get past the ETF/Fund thing and sup­port Stash as an alter­na­tive to buy­ing indi­vid­u­al stocks (in my pre­ferred way of div­i­dend invest­ing).

      Thanks again for com­ment­ing, and shar­ing. You were very clear, and I hope help­ful to Kay.

      david

  7. I’m con­cerned about the secu­ri­ty of Stash. I don’t have a lot ov mon­ey to invest but I want to get start­ed. I got the app on my phone and start­ed the reg­is­tra­tion process. I stopped when they asked for my SS #. They also need my check­ing acct. info.
    Looking for some guid­ance.
    Angie

    • Hi Angie,

      The thing is, every bro­ker­age is going to need your social secu­ri­ty num­ber.

      In the case of Stash, they need your check­ing account num­ber for a few rea­sons, not least of which is their busi­ness mod­el and the $1/month fee which they take from your check­ing account (though not sure how you’d move mon­ey in to invest with­out doing that either).

      I’ve given them both, with no issues. Think of it as anoth­er bro­ker­age.

      David

  8. I just start­ed with Stash today. I’m curi­ous to see if it leads any­where. I’m not invest­ing much yet. I just want to get a lit­tle some­thing start­ed so when I start my 10-year plan in 2 years, I have some­thing worth get­ting me start­ed. I’m only invest­ing $5 — an amount that I gen­er­al­ly won’t even notice. If I like what I see, I will prob­a­bly increase that amount incre­men­tal­ly. If not, my loss­es won’t be sig­nif­i­cant enough to hurt my finances. So far, this is what I like about Stash, from day 1.

    • Thanks for check­ing in! I agree with the sen­ti­ment that if you start small with an amount that you “gen­er­al­ly won’t even notice” you can learn some­thing and start to build healthy habits.