Most of us know that investing is a great way to increase our net worth, but I’d be willing to bet all of my seed money that far fewer know how to invest.
Apps that make doing that simple and accessible to the everyman, therefore, have a unique ability to mobilize and guide a huge chunk of the population that has heretofore gone underutilized.
Stash, for instance, was created because its founders wanted to know why half of Americans don’t invest.
One such demographic that could use a little more guidance than others is my own — the millennial generation. We’re at a stage of life where financial planning is creeping at a more insistent pace to the front of our mind, plus we have a bit more financial freedom and world knowledge to intelligently engage in investing. But not many of us know how to.
Which is where Stash comes in. It’s an app that makes investing simpler and breaks down where your money goes into custom categories that you might care about, like clean energy or things American-made. In terms of learning how to invest as a novice, there’s in-app educational content, tailored to your unique investing profile.
In order to take down the first barrier for investing — not having enough money — they allow you to invest with as little as $5. Taking a page out of the book of the weight-loss industry, the Stash founders wanted to make investing about taking small steps.
The second barrier is figuring out what to invest in — ok, you have the money, now what on earth do you put it in? For this, Stash does something pretty brilliant — particularly so for millennials.
Recently, a Morgan Stanley report of 1,000 investors showed that millennials are driving the growth of a $9 trillion market on Wall Street: sustainable investing. Much more than the general populace, millennials want to make their money count — and what they care about is something that lends itself well to the commonwealth.
What Stash does so brilliantly is make choosing investments a) simple, and b) arranged into ETFS, or, different topics that you might care about. They’re named by Stash’s financial experts to reflect the kind of investing you’d be doing by putting your money there.
For instance, there’s a “Global Citizen” option that allows you invest in companies from all over the globe, an “American Innovators” option that invests your money into American companies changing the world, and a “Clean & Green” option that puts your money into companies producing solar, wind, and other forms of renewable energy.
Since one hangup to investing is a vast, indistinguishable set of options, Stash slims them down and categorizes them based on how you’d like to think of them. This way, investors can directly fuel the things they care about. They can feel like they have some part in their values gaining greater purchase in the landscape of their country. Even if you’re just throwing a few dollars every now and then in, that matters when thousands of other people are doing the same.
Not only is Stash simple enough to engage a younger generation (and one decidedly absent from current investing), but they’ve also made it possible to galvanize the group by offering them the power to invest their money where it most matters to them.
One thing that hasn’t changed since the American Revolution is that representation has a cozy relationship with power. If more millennials, with their concentrated interest in sustainable companies, begin to really engage with the market, they could have the sort of noticeable impact they wish to see in the world, but perhaps in a more indirect (and exceedingly market-like) way. You eventually make more money by investing, but your act of investing helps the company that you want to see do well, which could help its industry and its successes/innovations.
It’s one way of coupling “value” as we understand it through money with value as we understand it morally.
And since you might not have a lot of money, anyway, if you’re investing this way — the cost to invest with Stash is only $1 a month for balances under $5,000. If you’ve got more than that, there will be a 0.25% fee per year (which ends up being $12.50 for a portfolio of $5,000). If investing is easier when you don’t have to think about it, you can take your hands off the wheel and turn on autopilot with “auto-stash” — an option you can easily add that sets up recurring investments.
If your interests are less green like wind energy and more green like money, Stash makes ‘diversifying’ your portfolio really easy. You can throw $5 into “Clean & Green” and $15 into “Blue Chips” — which is the option that puts your money on the well-known American superstar companies that already made it big. The risk level for those is pretty low.
The point is that no matter what’s important to you, Stash wants to make it easier for you to invest in it — to put your money where it matters, and also hopefully round out your net worth while it’s at it.