Stash Invest Review

Are you new to investing and don’t know where to start? Maybe you’re somewhat seasoned but still want help in determining exactly where–and how–to invest your money. Well, Stash is a guiding platform that wants to help you do just that. Here’s our complete Stash Invest review.

stash invest review

What Is Stash?

Stash is an app that aims to make investing easy and fun for anyone, even if you’re brand spanking new to the investment world. It won’t manage your accounts for you, but it will guide you through the process of selecting the perfect investments for your specific needs.

Upon signing up online, the app will ask you to answer a few questions about yourself. These are designed to give the app an idea of your financial situation, your outlook on investing and life, and your plans for the future. Then, the app will curate a customized portfolio to choose from, giving you investment options that suit not only your income but also your values and goals.  For a limited time, signing up for Stash includes a free $5 bonus.

Stash also serves to teach and guide its users, offering tons of in-app educational content. Of course, even this content is tailored to your own investing profile, allowing you to easily access topics that actually apply to you and your situation.

Even if you’ve never invested a penny before, Stash wants to make sure that you are comfortable and confident in your new portfolio choices. This app couldn’t be easier to use.

How to Use Stash

As I mentioned, the first step is to download the app. In the initial registration process, you’re asked about your own investing style (or how you think you’ll be once you start). Are you a conservative investor who wants to play it safe, an aggressive one who doesn’t shy away from high-payout risks, or somewhere in between?

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In order to curate your investment recommendations, they’ll ask you questions about your income, total asset values, and when you plan to use the money you’ll be investing. They’ll also have you connect your checking account during the setup process. Then, you’ll use your checking account to fund your Stash account when you’re ready to invest. They do not accept other forms of account funding.

Once this process is complete, you’ll be given your Stash results. The app will give you a rundown of recommended ETFs based on your unique needs and financial situation. It will also note foundational investments based on your personal risk tolerance and, in turn, asset allocation. If you answered that you wanted to be a conservative investor, these foundational choices will be “safer” investments like bonds. If you wanted to be more aggressive, you’ll see options like high-risk stocks.

Keep in mind that as an investor, you can always (and should!) rebalance your portfolio later. Even if you’re aggressive now, you can choose to become more and more conservative as you near retirement age.

How Much It Costs

Stash not only makes it easy for beginners to get advice and guidance when jumping into the investment game, but they also make it incredibly affordable.

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If you hold account balances through Stash that are less than $5,000, your monthly service fee to use the app is $1. If you go above that $5,000 threshold, you will be charged an annual fee of 0.25%, or 25 basis points.

Keep in mind that this fee is for actually using the Stash app. The actual investments will come with additional fees. No matter where you opt to invest your money, you’ll also be subject to expense ratios, which are fees on your actual investments. These expense ratio fees are unavoidable, as every mutual fund and ETF carries them. So just be aware that they exist and can vary in cost.

Based on the 30+ ETFs that Stash has available, you can expect these fees to range from 0.07% to 0.95% (between seven and 95 basis points). The average expense ratio through the app is 0.39%.

How Much You Need to Start

Your account minimum, and the minimum investment required, is only $5. This means that you don’t have to save up a ton of money in order to get the ball rolling on your investment portfolio.

You can start with whatever you have to spare, and then continue to add to the account monthly.

This makes Stash an excellent option for beginners or those without a lot of wiggle room in their budgets. As you know, compound interest is the most important factor in investing. The sooner you can allow your money to start growing, the more it will earn for you in the end.

 

One really neat feature of Stash is that it offers a feature which can show you how your money will potentially grow. In it, you can look at where your investment is now, how you expect it to grow, and how much you’ll regularly contribute to the fund. Then, the app will show you what you can expect to have from that investment in five or 10 years.

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This not only shows you how your money can grow over time, but might motivate you to trim your budget and invest just a little bit more each month.

Stash vs Robo Advisors

It’s important to note that Stash is not a robo advisor. There are many great ones available out there (Betterment and Wealthfront are two of our favorites). They guide you through exactly what you need to do investment-wise to manage your assets. Unfortunately, that’s not what Stash does.

Stash is a great app for those who might be overwhelmed by the idea of investing or who want to start small on their own before hiring a “real” financial advisor to manage their portfolio. And for that purpose, Stash really shines.

However, if you have more assets on-hand and want a more personalized touch, a robo advisor is the next perfect step.

The management fees incurred by Stash and robo advisors are similar:

Stash Betterment Wealthfront WiseBanyan Acorns
$1/mo, under $5,000

 

0.25%, over $5000

0.25%, Regular

0.40%, Plus

0.50%, Premium

Free, $0-$10,000

0.25%, over $10,000

Free

*You can buy premium packages

$1/mo, under $5,000

 

0.25%, over $5000

Keep in mind again that whether you use Stash, one of the robo advisors, or any other portfolio management option, you’ll also be forking over the cost of the ETFs themselves.

Pros and Cons

While Stash isn’t going to be a one-stop-shop investment option, it might be the perfect place for your to get your feet wet.

Pros:

  • It’s perfect for new investors, making the process simple and straightforward.
  • You don’t need much to start; there is no minimum deposit to open the account and only $5 required to start investing.
  • Curated recommendations based on your needs and income mean that you get an easy, personalized result.
  • Easy app features allow you to see the impact your saving and investing might have over time. You can then adjust your habits accordingly.
  • With over 30 ETFs to choose from, you have quite a few options to get you started.
  • The app offers a wide range of educational pieces, tailored to your own funds, income, and questionnaire results. This could be invaluable to a brand new investor, especially since you won’t have to look far to find pertinent info.
  • Invest in your passions; Stash enables you to choose investment funds that are in line with what you’re most passionate about. If you want to put your money into companies that focus on green energy and the environment, Stash can help you find them. Interested in technological advancements? The app has you covered.

 

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Cons:

  • Stash doesn’t actually manage your portfolio. So, you’ll need to go into the app knowing that these are great starting points. But you may eventually need to move on to a robo advisor or financial advisor as your portfolio grows.
  • The monthly fee sounds low ($1 for accounts less than $5,000). But it’s actually a higher percentage than many robo advisors, especially if you carry a low balance for a while. Companies like WiseBanyan offer similar services with no management fees. And companies like Wealthfront will manage your first $10,000 for free (charging 0.25% after that).
  • Though the app offers more ETF options than its most direct competitor (Acorns), you are still missing out on a lot of options. Plus, you could research many of these funds on your own and even purchase them on a non-commission basis.
  • You’ll have to input your personal info just to get a result. In order to see any of their recommendations, you’ll need to link up your checking account and commit to a monthly, recurring contribution. You can opt out of this once sign-up is complete. But it might irk some to have to give this information before even finishing the registration process.

If you’re brand new to investing and need to be walked through the process in a quick, easy way, Stash might be the perfect place to start. For a minimum as low as $5, you can start investing for your future, even picking funds that align with your own passions.

Sure, you can find cheaper management options and more comprehensive advisors (robo or human). However, for the true beginner Stash is happy to hold your hand (well, your phone) and walk you through the process.

Stash Invest

Stash Invest
8.5

Commission Cost

10/10

Technology

10/10

Customer Service

10/10

Trade Execution

9/10

Up Front Incentive

5/10

Pros

  • Cheap, cheap, cheap trading costs
  • Small up front bonus

Cons

  • Not ideal for larger investors
  • Not an extensive list of ETF's available

Topics: Reviews

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