Investing – it’s not as bad as it looks. In fact, it’s one of the few things on which most seem to agree that everyone should be doing.
The Money Pulse Survey carried out by Bankrate this year shows that less than half of all Americans have money invested in stocks. Among people under 30, it’s less than 26 percent. In contrast, 59 percent of adults in America drink at least one cup of coffee a day and spend about $40 billion a year doing it.
Now, what if you skipped that daily Starbucks run or morning homebrew and threw those couple of dollars at an exchange-traded fund instead of a latte? For somewhere around the same amount of effort? That’s a question Stash is hoping we ask ourselves more often.
A Little Share-ing Goes a Long Way
The aforementioned survey by Bankrate found that the two main reasons people don’t put money in stocks is that they either don’t have the available cash (53% of respondents) or they don’t have the requisite knowledge of the markets. The creators of Stash – David Ronick, Brandon Krieg, and Ed Robinson – brought together a focus group of 100 people and arrived at about the same conclusions. The average person appears to see investing as arcane and expensive.
But with all the technology and experience we have, that really shouldn’t be the case. At least Stash doesn’t think so.
First, Stash quickly addresses the expense barrier; for as little as $5, users can sign up and begin invest in various types of shares. For $5 you may only actually own a fraction of a share, but the intention is to get your feet wet. Once you’re in, Stash guides you through the experience and uses glossaries and graphs to make things understandable.
The Process & Experience
Stash requires users to fill out a questionnaire before they can begin investing, which is standard procedure put into place by the American Securities and Exchange Commission. Other information that needs to be handed over is employment status, income, net worth, and your plans for your savings. This isn’t unlike the information a financial advisor may require of you in order to infer risk tolerance and suitable investment type. With that done, you’re ready to start investing.
To work through the “knowledge” deterrent, Stash presents investment alternatives in a very colloquial, relatable way. There are three broad classifications of investments: ‘I like’ is for companies that make things you’ve enjoyed using; ‘I believe’ is for causes you care about and support (broken down further into fixed categories like, “Clean & Green”, “Data Defenders” and “Equality Works”); ‘I want’ lets you make an investment based on what you want to get out of the investment process, like “getting higher returns than putting money in a bank”, or “needing a way to park assets for an extended period”.
It’s approachable, simple and the right amount of personal. With some smart analysis, curation and UX, users get to put money on ventures of which they are personally supportive while staying within the boundaries of sensible investing.
The fee structure is just as simple: $1 a month until you hit $5,000, and 0.25 percent of your total investment per year after that.
Once your money is allocated, Stash keeps users engaged with advice based on the kind of choices they’ve made and celebrations of milestones. There’s also a social component to the app, by which investments can be compared between users and milestones shared.
Stash seems like the kind of thing it would take to get more people interested in investing. It’s mobile-based, simplifies an otherwise seemingly complicated process, and makes the thing more natural with their classification methods.
50,000 people so far have signed up for the Stash waiting list, so there’s definitely a market for their market.
Prateek Jose is a writer and engineering undergrad from India with an unhealthy obsession for obscure historical trivia. Conversations about absurdist fiction and the technological singularity make his day. He’s already uploading parts of his brain to servers by writing for websites such as this one.
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That user interface looks awesome! I always liked easy to use and modern looking applications. This one looks to be gaining some steam with that user base growing. I am going to get on that waiting list and see what happens.