How the Stash App Turned Me Into an Investor

Starting Out

How $5 and the Stash App Turned Me Into an Investor

Super-low minimums and smartphone accessibility make it easy for young investors to learn the ropes.


Five bucks, a smartphone, and boom: I'm an instant investor. With the Stash app, the investing world suddenly became more accessible and less intimidating to me.

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I’ve only been a Stash user for a few weeks, but I’m impressed so far. The minimum investment—you only need $5 to get started—initially attracted me. Because I’m a first-time investor, the larger amounts required to open a traditional brokerage account put investing somewhat out of reach. But with Stash, I’m learning about markets and trading, along with learning about my tolerance for risk, without putting too much money on the line. I’m hoping these lessons will pay off down the road when I have a bigger nest egg to invest. In the meantime, there’s no excuse not to try the Stash app because my phone is always a few inches from me.

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The key to Stash's success is that it narrows your investment choices to just a few suitable options, rather than leaving it up to you to pick from the many thousands of stocks, bonds and funds available to individual investors. How does it work? When I signed up for the app, I answered questions about my age, employment status, investment goals, risk tolerance, time horizon and so on. Based on that information, Stash assigned me a risk level, which helps determine the investment choices I have. Stash says I have a "moderate" risk level, when it comes to investing; other risk levels are "conservative" and "aggressive."

The Stash app scores points for creativity by serving up investment choices in three relatable categories: I Believe, I Like and I Want. As the name suggests, the I Believe category lets you invest in your convictions, from clean energy to workplace equality. The I Like category offers investments in the things you, well, might like, from social media to shopping. The I Want category emphasizes choices that align with your investing goals, in particular your risk tolerance and time horizon, to make sure you will actually be able to get what you want.


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Almost all of the investments on Stash are exchange-traded funds, including ETFs from popular issuers such as Vanguard, Blackrock and Charles Schwab. ETFs are a good option for new investors because they hold hundreds or even thousands of stocks (or bonds or other assets). That means instant diversification, rather than committing all of your savings to a single stock. For example, based on my moderate risk level, Stash recommended that I put my money in what it calls its Blue Chips investment. In reality, Blue Chips is the Vanguard Mega Cap ETF (MGC), which currently holds shares of 279 giant companies, including Apple, Microsoft, ExxonMobil, and Johnson & Johnson. Because Stash lets me purchase a fractional share of an ETF – a full share of Mega Cap currently goes for about $73, more than I have – my $5 buys me a tiny piece of 279 of the most well-known businesses in America.

Unlike most brokerages, Stash doesn't charge me a trading commission when I make an investment. Instead, there's a fee of $1 per month for accounts of less than $5,000. The fee is waived for the first three months. Once your account balance reaches $5,000, the fee switches to a rate of 0.25% annually. Needless to say, a $1-a-month fee will eat away at your savings quickly if you only invest $5, so it's important to build up your balance.

One way to stay disciplined while boosting your balance is to practice dollar-cost averaging. The strategy calls for you to invest a set amount of cash at regular intervals. This approach helps reduce the risk of investing all of your money all at once when the market is high. It also discourages you from trading impulsively or trying to time the market – among the biggest mistakes investors make. While dollar-cost averaging doesn't guarantee that your $5 investment is going to turn into $5,000, it does help instill the habits you need to become a better investor in the long run.

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Despite the monthly fee, I'm willing to stick with Stash once the free trial expires. I see the app as a way to build my investing chops and figure out who I am as an investor. I'm learning how to ride the market at the expense of a few soy lattes at Starbucks – calories I can do without anyway.