The topic of investing is something that not a lot of people really understand. They think it’s usually about giving their money to a professional and hope that he or she will grow it.
This practice is actually just one of the ways that you can invest and grow your money. But there are a lot more ways to do it.
But the lack of understanding about these different investment vehicles, not to mention the high amount of money required, is scaring a lot of people from investing.
Technology, though, is trying to change that. There are a lot of websites and apps out there that are trying to make it easier for people to start their investing journey.
One such app that does this is the Stash Invest app. It’s an app that provides people with information about the different investment opportunities out there
The beauty of this app is that it not only allows you to see and compare the best investments available, but you also don’t need a lot of money to start. You can invest for as low as $5.
You can also earn some cash back if you link a credit card on the app and make certain purchases.
Since this is an investment app and not really a money-making app, it’s really hard to gauge how much you can earn here. As for the cash back, that will be dependent on a lot of factors.
But is Stash Investment app really legit or is it just a scam that you should avoid?
Stash Investment is a Legitimate App
Stash Investment is an app that was created in 2015 as an answer to the founders’ question on why there are not a lot of people who are saving and investing, despite the many investment vehicles available.
The app is designed to provide beginners with the necessary information and guides needed to start an investment portfolio. It also allows you to start investing at a very low price.
Stash also has a cash back opportunity for members, where you can earn some money back for making certain purchases using your credit card or debit cards.
From what I’ve seen so far, I can say that the app is very much legitimate. It does provide the necessary information and tips you would need to start investing the right way.
The app also doesn’t provide any guarantees when it comes to return on investment, which is also good since there’s really no way for anybody to know ahead of time how an investment would turn out.
Despite being legit, there is one major issue with it and that’s the high fees it requires and the cost of some of its investment. I’ll discuss these issues in more detail as we progress further in this review.
Who Uses the Stash Investment App?
The Stash Investment app is designed to be used by people who are looking for information and guidance about investing and the people who don’t really have a lot of money to start investing.
The app offers you helpful investment education, especially if you are a beginner and don’t really have any background in investing.
Stash can help you with that through the different tips and guides they have. The app is also helpful for people who are looking to invest but don’t really have a lot of money to start with.
No longer will you need to have thousands of dollars in order to start investing, as the app allows people to begin for as low as $5.
They have a variety of investment options being offered along with the risk and possible returns you can get with them.
There’s just a fee that you need to pay monthly to use their services. I’ll be discussing how you can start in the next section of this review, as well as the cash back opportunity Stash provides.
How Does the Stash Investment App Work?
Stash Investment is an app that provides you with knowledge, tips, and guide on how you can begin building your investment portfolio.
The app can also allow you to start your investment for as low as $5, making it easier and simpler for you to start investing without the worry of shelling out a lot of money.
It is important to note that Stash itself doesn’t really manage your money directly. They just guide you when it comes to choosing the right investment that fits your investing profile.
To begin, you need to first sign up, which is a simple process. You begin by putting in your email address and a password and then completing your personal profile.
After that, you will answer a series of questions to help Stash in identifying your investment profile and see what kind of investor you will be.
The entire process can take about 5 to 10 minutes to complete. It is important to note that the app is only available to U.S. residents.
Once done, Stash will then provide you with some investment options based on your answers to the questions they provided.
Clicking on one of the investments that they recommend will allow you to get more information about it. The app provides the details in easy to understand terms, so you don’t have to worry about reading jargon or gibberish.
Now, Stash is not like your typical brokerage or investment app, as instead of presenting you with the usual list of stocks and ETFs available, they provide you with themed investments.
The app, basically, groups stocks and ETFs into a themed portfolio to help you understand what they are. For example, you are a big fan of Warren Buffet, the app has a “Roll With Buffer” theme.
It features Buffet’s company, the Berkshire Hathaway and other holdings he has. This makes it easier for you to identify what kind of investment you may want to start with.
The themes are put into three categories, the I Believe, I Want, and I Like Categories. The themes will contain the performance history of the portfolio, risk level, and the stocks and holdings inside it.
When you click on a theme you like, just click ‘Add To Portfolio’ and enter how much you want to put in so it will be added to your investment. The beauty of the Stash app is that you can also suggest an ETF for your portfolio.
Next would be to link your bank account to the app to allow you to transfer money for your investments. Take note that it takes 2-3 days for the money to be transferred from your bank to the app.
The last thing you need do is to verify your identity and create a 4 digit pin number. The Stash Invest will cost you $1 a month if your account balance is below $5,000.
Aside from the usual investment, Stash also has the ‘Stash Retire’, which is a retirement account option. It offers both the Traditional and Roth IRA and it allows you to contribute up to limit that IRA allows.
It functions almost the same as the Stash Invest since it also offers theme-based investments, but it does cost more, as you need to pay a $2 fee a month if your account is less than $5,000.
If your account goes over $5,000, the monthly fee will be replaced with a 0.25% annual fee. So for a $5,000 investment account, 0.25% translates to $12.50.
If you are under the age of 25, your Stash Retire won’t have annual fees. Aside from investing, Stash also has an opportunity for cash back.
First, you need to link an eligible credit or debit card to the app. Then, you just need to use the card at participating merchants to earn the cash back.
To earn from your debit card, the transactions must be charged as credit card sale. The cash back you earn will be deposited into your invest cash balance.
Now, as I mentioned above, there’s some issue with this app, particularly with the monthly fee you need to pay. Now $1 or $2 might not seem a lot, but it actually is for a small portfolio.
For example, let’s say you only have $100 in your Stash Invest account and you’ll be paying $1 a month for using it, which is $12 a year. That is actually 12% of your investment portfolio, which is not that easy to earn back.
Imagine if you are using a Stash Retire, then that $12 becomes $24, which is 24% of your portfolio. That’s a big percentage just for investing fees.
This is why it would be better if you would start with at least $1,000 when you invest with Stash, so the fees won’t affect your account as much.
What I Like about Stash Investment App
Now that we know what Stash Investment is and what they offer, it’s time to talk about what I like about this app.
- The first thing that I like about Stash Investment is that they have made investing simpler and easier to understand, especially for people who are new to investing. They have a lot of easy to read information and guides about investing that you can take advantage of when you are just starting. The way they explain each investment opportunity is really easy to understand as it’s presented in layman’s terms and not in investment terms.
- I also like that Stash Investment allows you to start investing for as low as $5, which removes the barrier to entry that most people experience when it comes to investing. With this app, you won’t have to worry about shelling out thousands of dollars just to start investing, as you only need to start with $5 to get your investment portfolio started.
- Another thing that I like about Stash is that they also offer an opportunity for you to earn some money in the form of the cash back option they have. You just need to link an eligible credit or debit card and use them when you shop at participating merchants to earn the cash back.
What I Dislike about the Stash Investment App
Of course, there are also a few things about Stash that I didn’t really like, which I’ll discuss here.
- The first thing that I didn’t really like about Stash Investment is that they have an expensive investment fee. Yes, $1 or $2 a month might not seem a lot. But if you have a small portfolio, it is a lot of money that your investment would need recover from. There’s also the fact that there are cheaper options out there, so this app really falls short when it comes to the investment fees.
- Another thing that I didn’t like is that the average expense ratio of Stash Investment’s ETF is at 0.34%, which is high compared to what other investment companies are offering. This means that your investment portfolio will really need to perform well for you to make up the cost of the annual fee that is charged to you.
Do I Recommend the Stash Investment App?
After learning more about Stash Investment app and what it brings to the table, I can say that this is an opportunity I recommend to people who are new to investing.
The app’s guide and easy-to-understand investment portfolios are perfect if you are someone who is very new to the world of investing.
With this app, you won’t be bombarded with investing jargon and terms, so investing won’t feel like rocket science.
But if you are someone who is already knowledgeable with investing, then this app might seem costly for you. The app’s real advantage is that it makes it easier for newbies to begin. But for seasoned investors, I don’t think this app really offers anything worthwhile.