Stash Review 2023: Pros, Cons & Fees Breakdown
Looking for an easy way to automate your investments using your smartphone? Stash Invest is a very useful app for investors and I had the pleasure of opening an account and using the app for several hours.
In this review, you’re going to learn about Stash Invest and why I think it’s a very useful tool for automating your investments and doing lots of research in a short amount of time.
What is Stash Invest?
Stash is a cool, innovative saving & investing app geared towards millennials who want to automate their investments by purchasing stocks or sector mutual funds using frequent small dollar amounts.
The company was founded in 2005 and currently has over 4 million members.
You can purchase fractional shares in major companies like Amazon (NASDAQ: AMZN) without paying a single dime in trading commissions. Build up an investment portfolio with a smaller amount of money and avoid those costly trade commission fees.
I built up a stash of $900 with small weekly deposits of $25. Small savings add up to big amounts and you can track your total return within the dashboard.
Under Settings -> Balance History, you can track the overall growth of your portfolio.
How Does It Work?
Create an account and Stash asks you a series of questions to personalize your investment strategy based on your answers.
Once you create your account, you need to select an investment plan and connect your banking account with your Stash account.
Once successful, you can invest in a wide variety of stocks, bonds and ETFs using your balance. You can invest as little as 1 center per transaction. There are no minimum purchase amounts.
I signed up for Stash and the entire process took only 10 minutes to set everything up.
Account Types
Stash offers 4 basic accounts:
- Checking & Savings
- Investment
- Retirement
- Custodial
Stash Banking
Banking is at the core of the Stash invest product. You get a no free bank account with stock back and a debit card to use.
Stock back is a unique program where you get cash back in stock when you make a purchase.
For example, if you use your Stash debit card at McDonald’s, you get fractional shares of McDonald’s stock as a cash back reward.
If you buy something from a company that’s not offered, then Stash will give you cash back in a similar ETF.
Stash Investments
This is why most investors Stash so you can put fractional shares in many major companies like Apple (NASDAQ: AAPL) and Google (NASDAQ: GOOG).
I personally use the Autostash feature to automatically transfer money from my bank account to Stash every week.
This strategy of automating your finances was coined by David Bach in his book, Automatic Millionaire.
I started out with an Auto stash of $5 and now transfer $20 per week.
I’ve saved over $500 using the Autostash feature and best of all this is money I would have spent if I left it sitting in my checking account.
Automatic investing is powerful because it removes emotions from our decision-making process and guarantees you build the habit of investing.
How to Use Stash
There are several different ways to use Stash effectively. If you want to maximize your investment returns, then buying shares in individual stocks should be your main focus.
According to NerdWallet, the average annual return on US stocks is 10% before inflation. Dalbar research found that US stocks performed other similar equity classes from 1996 to 2015:
While past returns aren’t guaranteed, we can assume that American companies will continue to attract more customers, boost revenues, and increase earnings as the years go on. If you think America will continue to make money, then invest in US stocks.
Stash makes it easy to build the habit of investing with just small amounts. I love this approach because so many people avoid investing in stocks like Apple because they feel it’s too expensive.
While you may not have enough money to buy 1 share, you can put some money away each week/month and eventually get a share of stock.
Good habits make you wealthy and one of the most important wealth building habits is consistently doing the right things over and over again.
If you want a more hands free approach, then put your money in an ETF or mutual fund to balance your risk. Stash offers several good mutual funds that invest based on your risk tolerance and overall investing goals.
This is a pure set it and forget it approach to investing that works well for some people who don’t want to worry about the ups and downs of individual stocks. Why not own the entire stock market?
Different Types of Investments
Let’s breakdown the different investment options so you can choose which is best for you:
Bond ETFs
These investments are low risk, low return investments with stable returns to preserve your money. Bonds are basically loans that pay you interest depending on the investment grade. If you are near retirement or don’t want to risk your money, then bond ETFs are perfect for you.
Balance Funds
These are balanced mutual funds where you earn a higher return than bonds but spread your risk across a lot of different stocks. What I like about these funds is that they offer sector funds like Corporate Cannabis so you can invest in massive future growth industries.
My favorite balance funds are:
- Corporate Cannabis
- Delicious Dividends
- In Transit
Stocks
This is where you can really build a strong portfolio by investing in individual stocks. You can buy partial shares in literally hundreds of companies although every publicly traded company isn’t listed.
There are a total of 198 individual stocks listed on the app. Here are some of best stocks you can buy on Stash Invest:
- Amazon
- Apple
- Booking.com
- Paypal
Life
Life offers 3 basic ETFs but my favorite is the Young Money ETF called Global X Millennials Thematic ETF. This ETF invests in high growth companies like Paypal, Amazon and Starbucks.
If you want to invest in one of Stash Invest’s ETFs, I think this is a great choice for investors.
What’s in my Stash Portfolio?
The bulk of my portfolio is invested in tech stocks with a 85% stock/10% bond/5% cash mix.
My largest holdings are:
- Alphabet
- Mastercard
- Microsoft
- Apple
- Costco
Stash Fees & Pricing Breakdown
Like most online brokers, Stash doesn’t charge any trading commissions but there are recurring fees when you use the app.
Here’s a visual breakdown of the Stash Invest App pricing and fees:
Stash Invest offers 3 basic pricing plans:
- Beginner: $1 per month for individual accounts under $5,000
- Growth: $3 per month for retirement accounts under $5,000 (Free for customers under 25 years of age)
- Stash+: $9 per month for individual & retirement accounts under $5,000
If your account is more than $5,000, you pay 0.25% annual fee to use Stash Invest. One of the negative features for Stash is their recurring fees, which really add up for accounts larger than $100,000.
The annual fee is like an expense ratio that Stash charges you every year. Here’s an example of monthly fees based on account size:
| Account Balance | Annual Fee |
| $5,000 | $12.50 |
| $25,000 | $62.50 |
| $100,000 | $250 |
| $250,000 | $625 |
| $500,000 | $1,250 |
| $1,000,000 | $2,500 |
When compared to index fund or mutual fund expense ratios, Stash fees are similar to low cost index funds offered by Vanguard.
Are Stash Invest fees too much? It really depends on your personal investment strategy.
If you plan to invest in mostly ETFs, then Stash is a great alternative to owning index funds.
If you plan to buy stocks only, then it’s cheaper to use another fractional share app like M1Finance.
Who Should Use the Stash Invest App?
Stash wasn’t built for high net worth individuals because they won’t find much value in this investing app. Stash is best for younger people and individuals who are new to investing but don’t have a lot of money.
Fractional shares makes investing available to the average joe who is forgotten by the rich Wall Street banks and investment fund managers.
Conclusion
Stash Invest App is one of my favorite new investing apps for easily automating my investments and analyzing tons of different stocks and ETFs on my smartphone.
Frequently Asked Questions
Is Stash publicly traded?
No. Stash Investments LLC is a SEC registered privately held investment advisor. The company doesn’t currently have plans for an IPO.
Does Stash offer DRIP? Can you automatically reinvest dividends?
Yes. Stash has the option to activate dividend reinvestment automatically.
Go to Portfolio Settings -> Dividend Reinvestment Program and toggle the tab to the right to Automatically reinvest dividends.
