I can’t even con­tain how excit­ed Stockpile makes me. I have such a pas­sion for invest­ing by rein­vest­ing div­i­dends and hav­ing mon­ey make mon­ey. These guys seem to have thought of every­thing, and invest­ing is as easy as it can be. You can get start­ed with as lit­tle as $1. (Whether it makes sense to do that, is anoth­er sto­ry I’ll dis­cuss lat­er.). I could­n’t help but write a Stockpile review to com­ple­ment my reviews of Stash Invest and Robinhood.

What is Stockpile?

Stockpile is the sim­plest way to get start­ed invest­ing in indi­vid­ual stocks, ADR’s (which enable you to invest in non-US com­pa­nies), and ETFs that track some mar­ket indices or com­modi­ties (like gold).

With Stockpile you invest in dol­lar amounts (not share amounts). I mean, that’s it. It’s that sim­ple. You can buy $25 of Apple or $10 of Tesla, or what­ev­er your heart desires. (I bought $50 of Apple.)

What’s nice about buy­ing in dol­lar amounts is that you don’t need to wor­ry about the price of the share. If you’re invest­ing for the long term, minor dai­ly price move­ments don’t mat­ter, and this enables you to invest more eas­i­ly and with a lot less mon­ey to get start­ed.

It also takes the focus off of the price at which you’re buy­ing. I believe that when you focus on the price you pay per share, you become more hes­i­tant because you want “the best price”. The best price doesn’t exist. Sure, if you’re trad­ing, you’re going to want to max­i­mize against tiny price move­ments. But if you’re just try­ing to build wealth over time, those tiny price move­ments are absolute­ly irrel­e­vant.

Pick a good com­pa­ny, it’s going to be high­er in five years than it is today, whether you buy it at the dai­ly high or the dai­ly low. Just get start­ed.

For some rea­son (I have lots of thoughts on this), it’s just so hard for peo­ple to get start­ed. Stockpile breaks down those bar­ri­ers. In fact, it inspired me to cre­ate a free email course to help peo­ple under­stand how get­ting start­ed through Stockpile helps them build wealth over time. You should sub­scribe, you’ll enjoy it and find it help­ful (don’t for­get, it’s free):

What I invested in

I want­ed to see how they han­dled the inte­gra­tion of dig­i­tal and phys­i­cal, so I got myself a $50 gift card that could be applied to any stock. The card came in the mail overnight (even though I didn’t pay for expe­dit­ed ship­ping!).

The gift card works like any oth­er — scrape off the back, enter a code, and it’s redeemed. You can do this either online (that’s what I did) or via their mobile app. The process is real­ly sim­ple.

From there, you sim­ply pick the com­pa­ny you want to invest in, and it’s done. Well, done except that you have to wait until the trade clears — which can be the same day, or the next day the mar­ket is open. Trades are made at the day’s clos­ing price.

If invest­ing isn’t the recipient’s “thing” they can cash out the card for a plain-old gift card. No penal­ty, no risk.

One thing is painful­ly obvi­ous: The Stockpile team are very clear about their tar­get mar­ket.

The Stockpile review: what does it mean to have thought of everything?

I said in my open­ing para­graph that Stockpile has thought of every­thing. What does that mean?

First, it’s impor­tant to under­stand their tar­get audi­ence. One thing to make clear, I’m reverse engi­neer­ing what they’re up to — I have no insid­er knowl­edge.

A good place to start is com­par­a­tives: I’ve put up reviews of Stash and Robinhood. I real­ly like what those guys are up to also, but they have dif­fer­ent tar­get mar­kets than Stockpile.

Robinhood is a tra­di­tion­al stock bro­ker­age rethought for the mobile and con­nect­ed world. If you’ve under­stand buy­ing and sell­ing stocks, doing research, and track­ing your port­fo­lio using tra­di­tion­al met­rics… Robinhood is for you. They’ve got­ten rid of all the lega­cy cruft from tra­di­tion­al bro­ker­ages, includ­ing trad­ing fees. It’s amaz­ing, but it doesn’t real­ly open the oppor­tu­ni­ties to build wealth to peo­ple who haven’t par­tic­i­pat­ed in the past. $8 a trade isn’t a bar­ri­er to invest­ing. Investing is intim­i­dat­ing, that’s the bar­ri­er.

Stash address­es the intim­i­dat­ing nature of invest­ing by using ETFs and more approach­able lan­guage. I’d guess their tar­get mar­ket are 20- and 30-some­thing pro­fes­sion­als (includ­ing mod­ern pro­fes­sion­als, like free­lancers and solo­pre­neurs) who think about invest­ing as anoth­er aspect of man­ag­ing the port­fo­lio that is their life. I love Stash, and con­tin­ue to use it, and absolute­ly love what they’re doing around edu­cat­ing investors to help them get start­ed. It’s impor­tant work but invest­ing in ETFs is not my pre­ferred way of invest­ing.

I start­ed invest­ing because I got a gift of five shares of stock when I was a teenag­er. I’ve since giv­en stock as a gift to many, but the tra­di­tion­al way to do this is expen­sive. Minimum stock pur­chase amounts using tra­di­tion­al div­i­dend rein­vest­ment plans or direct pur­chase plans (also known as DRiPS) are usu­al­ly in the $250 range. Plus, there are oth­er bar­ri­ers. In order to give the gift to a child, you have to have had a cus­to­di­an in mind ahead of time, and have both the child’s and the custodian’s social secu­ri­ty num­bers.

Giving shares as a gift is a gift of knowl­edge. It cracks open a world of invest­ing enough for the curi­ous to climb right in. After I got my gift, I scoured book­stores to under­stand more about how it all worked. What bet­ter gift for a child, than the oppor­tu­ni­ty let their curios­i­ty have a run?

It’s espe­cial­ly fun for kids to own a com­pa­ny whose prod­ucts they use. Try tak­ing your child to the super­mar­ket to see their P&> or 3M prod­uct, or to vis­it “their” AT&T, Target, or Walmart store.

It’s espe­cial­ly fun for kids to own shares in a com­pa­ny whose prod­ucts they use. Click To Tweet

Stockpile seems to be going after some­one who wants to buy and hold and not con­fus­ing it with an active trad­ing strat­e­gy. They’re look­ing for the oppor­tu­ni­ty to teach kids about invest­ing, through fam­i­ly (or com­mu­ni­ty) con­nec­tion.

That’s the oppor­tu­ni­ty Stockpile presents. I was able to buy two gifts of stock for a friend’s kids. They were small­ish-gifts, a thank you for a big favor done for me. I didn’t have to know any pri­vate infor­ma­tion about the recip­i­ents or their par­ents. All I need­ed was their home address. It couldn’t’ have been eas­i­er.

If the recip­i­ent is a minor, when they sign up they’ll have to have a par­ent present (it’s an SEC require­ment). The par­ent will set them­selves up as the cus­to­di­an, and togeth­er with the child can pick their invest­ment.

They get to pick their invest­ment in a great way — they can pick a com­pa­ny they’re inter­est­ed in. Interest begets inter­est… if they’re inter­est­ed in the com­pa­ny, they’ll learn more about invest­ing in the com­pa­ny. It’s just the way we work as humans. It’s a great way to spur a child’s inter­est in sav­ing, invest­ing, and how the cap­i­tal­ist world works (for bet­ter and worse).

I hope they play off this tar­get and fig­ure out a way to help peo­ple stay inter­est­ed in their invest­ments over time, and make it more of a group effort to do so.

Reinvesting dividends

Stockpile sup­ports rein­vest­ing div­i­dends, on both mobile and web apps. However, the “switch” is on an account-by-account basis. So, if you want to rein­vest div­i­dends for one com­pa­ny but not anoth­er, you might have to check with sup­port.

I high­ly rec­om­mend doing turn­ing on div­i­dend rein­vest­ing. Small amounts of stock pay even small­er div­i­dends. A few pen­nies or dol­lars in div­i­dends will get “lost” in your wal­let. Reinvested div­i­dends won’t be missed from your wal­let, but will accu­mu­late to increase the pay­check and rais­es you receive from your invest­ments.

I also hope they enable some sort of auto­mat­ed month­ly invest­ing options (often called “option­al cash pur­chas­es” in tra­di­tion­al DRiP invest­ing). Right now, I trans­fer mon­ey in auto­mat­i­cal­ly each month, but can’t assign that to an invest­ment auto­mat­i­cal­ly.

Getting started with a dollar

Does it make sense to start with a dol­lar? Why, or why not?

The biggest objec­tion is prob­a­bly the fee. If the fee to pur­chase is $1 (it’s actu­al­ly ¢99 plus a ¢3 cred­it card fee if you use a cred­it card, but I like round num­bers) and you invest $1, you have to have your invest­ment dou­ble just to earn back the fee!

Well, if you look at it that way, it sure doesn’t make sense.

But, if your alter­na­tive is to not invest at all… that $1 fee you pay can be thought of as the cost of edu­ca­tion about how to invest. Instead of buy­ing an invest­ment book for $20, you’re actu­al­ly invest­ing for just $1. Not bad. Very zen in fact, learn through doing instead of by read­ing or plan­ning. Don’t under­es­ti­mate the val­ue of hav­ing skin in the game as a moti­va­tor to learn­ing more.

Of course, hope­ful­ly you can come up with more than $1 to get start­ed. In fact, you have to as the Stockpile min­i­mum is $5.

One chal­lenge with invest­ing a small amount of mon­ey is that the returns are equal­ly small. If you invest $10 — and do extreme­ly well — maybe you’ll earn $1 in the next year on that invest­ment. $1 isn’t going to make much of a dif­fer­ence, is it? No, it’s not. Hard to get excit­ed about earn­ing a dol­lar.

Not so hard to get excit­ed though about a raise. What if you got a 10% raise? That’s excit­ing. We all have to start some­where, and if you have a mod­est amount to invest, it’s still bet­ter to get start­ed than not. And, if you can get a 10% raise on your invest­ment pay­check every year… well, that’s a larg­er raise than you’re prob­a­bly get­ting at work. And, you’ll get it every year.

While I don’t want this post to be a pitch for my book, track­ing the pay­check and the raise are real­ly impor­tant moti­va­tors to build healthy invest­ing habits. And, these met­rics that I use couldn’t align more to the way Stockpile helps you get start­ed invest­ing.

I’ve cre­at­ed a free email course just for peo­ple who want to get start­ed invest­ing and learn more. You real­ly should check it out:

Parents, grandparents, friends

I love the idea of invest­ing with oth­ers. It sheds light into a sub­ject we don’t talk much about — mon­ey. We use mon­ey every sin­gle day but hard­ly talk about it in any sig­nif­i­cant way. Crazy.

I used to talk to my grand­par­ents about invest­ing. It was fun. We’d talk about what com­pa­nies were doing, what we liked (or didn’t) about what they were doing, and what it meant in regards to the way the world was going. We could talk about Exxon and it’s impact on the envi­ron­ment, Starbucks and how peo­ple spent a lot of mon­ey on cof­fee, or Microsoft and the tech­nol­o­gy that my grand­par­ents could nev­er quite grasp.

Summary

I’m real­iz­ing this isn’t a typ­i­cal review. No need. It’s so sim­ple, just head over to the Stockpile web­site and check it out. At the bot­tom of the page they have a set of fre­quent­ly asked ques­tions which are a good place to start. Of course, they have an app as well, but I think you’d do bet­ter star­ing on their web­site.

Investing with Stockpile is a style of invest­ing that’s been around for a very long time. Go to many pub­lic com­pa­nies who pay div­i­dends, look on their web­site for the investor sec­tion of the site. Usually under the area that talks about div­i­dends you’ll see a link to some­thing like “buy stock direct­ly”. The way Robinhood is dis­rupt­ing tra­di­tion­al bro­ker­ages, Stockpile is mak­ing these direct pur­chase plans more eas­i­ly avail­able and bring­ing them into the mod­ern age.

If you have any ques­tions about how it works or have your own expe­ri­ence with Stockpile, drop me a line or leave a com­ment below.

Update March 16, 2017

I con­tin­ue to expand my use of Stockpile. I have moved all my hold­ings from Robinhood (who I love, but isn’t the best solu­tion for me) to Stockpile, and moved my kids’ accounts over as well (Stockpile is real­ly designed for fam­i­lies, and help­ing peo­ple get start­ed invest­ing even but not nec­es­sar­i­ly from a young age).

Update July 15, 2019

I’ve rewrit­ten the final chap­ter of my book and will (even­tu­al­ly) cre­ate a new version/edition of my book with these minor changes. As it’s much eas­i­er for me to release these changes dig­i­tal­ly via Gumroad, I’m going to release on Gumroad first. Subscribe to be noti­fied when I do release to Gumroad. And, like in the past, there will be a sub­stan­tial dis­count when I do.