The Stash Guy | Here’s why the Stash app is great for beginning investors
By Jay P - July 15, 2018
Hey what’s really good?! If you are reading this it’s too late! (Drake Shout Out) Just kidding, but in all seriousness if you are reading this you either want to invest in the stock market or have started investing with the STASH app. Most people are nervous and have no idea what you are doing when they first start out, that is an understandable feeling. You are already light years ahead of most because you realize that you should be invested in order to build wealth. Kuddos to you and let’s be real that money wasn’t doing anything in your bank account anyway. Savings rates are terrible.
Best Performing Stash Stocks Week ending 7.13.18
This post is a bit of an intro into who I am and how I started investing but also a little bit informative about why you made a great choice to start investing now. So for all intents and purposes I’m The Stash Guy, and I just want you to be the best investor you can be. That may sound corny but it’s true. I will tell you up front I don’t have all the answers but I think together we can figure this thing out and get you where you need to be.
Ok let’s start from the beginning. We all know that the stock market is a pathway to wealth for the rich. It is also how the rich maintain their wealth. That’s a tale as old as time, song as old as rhyme, beauty and….sorry I got a little carried away.
What most people do not realize is that the stock market can be a path to building wealth for the not wealthy. Some of my favorite stories are about the Janitor who built a million dollar portfolio over decades while mopping and sweeping floors every day. Or the administrative assistant who passed away leaving millions to her loved ones because she took the advice of her boss who was a financial planner. These are real people who slowly but surely built wealth from a low to middle class salary. I am a firm believer that the proof is in the pudding, and these people are my personal heroes. Yeah I know Kylie Jenner is a “self-made” (almost) billionaire but let’s be real neither you nor me have her head start but with discipline and investing we can all be wealthy.
We are in the technology age, where most of what you want is at your fingertips. With these technological advancements we have STASH. I am an amateur investor who has been investing in the stock market for over 15 years for myself. For the record I do not promote myself as a financial planner of investment advisor, just someone willing to see you succeed in the stock market. When I started investing I was terrified, mainly because you watch TV/movies and you hear about people losing everything in the stock market. So when I started investing I wanted to learn the lingo, hear the talk. So I watched CNBC for an entire year before I ever invested a single dollar. My first reason for doing this was that I was terrified. What if I put money in the stock market and the stock goes down? How do I know these are good investments? Am I in over my head? In truth I didn’t have a lot of money. I was a college student and I just wanted to invest my spare change, but to me $300 was a lot of money. It would have taken me a long time to save another $300.
Back then there was another trick to the stock market. In order to buy a single stock you had to pay a trading fee of anywhere from $7-$12 (depending on your broker) to buy and sell stocks. Now if you know anything about the stock market you know that realistically speaking the stock market returns around 10% per year. That means if I spend $100 in the stock market at $7 per trade ($14) it would take me over a year just to make the money back from buying and selling the stock. So this taught me that you can’t invest in small amounts. My minimum investment for a stock became $500.
Now do you see why I love STASH. STASH has erased that hurdle because you can buy as many shares of as many stocks that you like for $1 per month. Do you know how crazy that is compared to when I first started?! Also back then you could not buy pieces of a stock, you had to buy a full share. So for you ers that own $5, $20, $50 of Amazon count your blessings. One share of Amazon actually cost $1813.03. That means that originally you needed $1800 to own any shares of Amazon. Do you know how long it would have taken me to save $1800. Then when I finally save it you want me to put it all on one stock. That’s the equivalent of going all in on 32 at the roulette table. My heart couldn’t take it. In fact outside of STASH most other brokerage firm still require you to buy a full share of Amazon in order to own it. STASH is one of the few places where you can buy great companies despite the institutional limitations.
Again now you can see why I love STASH so much. For one, it’s like a utopia from where I originally came from when I started investing. Secondly, the ease and utility that you are afforded with the STASH app is unparalleled. The fact that you can do everything from your phone is unbelievable. My STASH is always with me. That provides an extra piece of mind as someone who generally distrusts people with my money. If you have my money I should know where it is at all times! No joke.
I have seen people complain about the limited number of stocks on the STASH app. As a long time STASHer I am actually happy with the availability of stocks on the app presently. When I started there were NO STOCKS in the STASH app, only ETFs (Exchange Traded Funds).
For those of you who do not not an ETF is a fund that you can purchase like a stock, but it actually represents a group of Stocks. For example Internet Titans is invested in 43 different stocks including Amazon, Netflix, Microsoft, Google and Facebook. So depending how all 43 stocks do determines whether your ETF goes up or down. This reduces your risk of just one individual stock having a bad day or week and affecting your investment.
Since then STASH has added over 60+ individual stocks, and at first I was concerned about this because I know people will see that individual stocks allow for the greatest return. This means that they also have the opportunity for the greatest loss. There are over 400 stocks on the New York Stock exchange. No human being can know all those investments inside and out. STASH has kept your selection low for a reason. They are presenting you with tried and true companies. None of the stocks in the stock market are in danger of going under anytime soon. Well, all except GE maybe. That also means that you can do your due diligence on those 60 stocks and not be distracted by the noise of the market. I’m going to help with that.
You still need to be wary of the stocks on the STASH app. All stocks are not created equal case in point, GE (General Electric). This company has been going through a challenging couple of years, however the industry that they are in has not felt the same negative pressures. Over the past 1 year GE is down over 13% but if you had owned an ETF that included GE you would not have been as effected by GE’s downturn. One example is The Blue Chips ETF, which owns General Electric as a part of its portfolio but was actually up over 16% over the past year while GE was down. I appreciate what STASH has done by allowing people to invest in individual stocks. It is allowing them an opportunity to build wealth at a faster rate.
One of the greatest examples of this is Netflix. CNBC recently reported that if you had invested $1000 with Netflix 10 years ago it would be worth $51,966. That report was dated December 4th 2017. Do you know that since that story was reported over 6 months ago, that same $1000 would actually be worth close to $74,000 IN TEN YEARS!!! That’s crazy. That is partly due to Netflix being up over 100% year to date. So on that note I respect STASH, but I want to temper your expectations. Those returns are not typical, they are entirely possible but not typical. Keep your expectations along the lines of 10% per year, and hopefully you get lucky and invest in a Netflix. The old saying is especially true when it comes to the stock market. It is better to be lucky than good.
I am not a fan of long posts, because I know the human attention span is limited and it has gotten even worse in the age of twitter and Instagram. So I will wrap it up. The point of this post is to let you know that If you have started investing in STASH you’re on the right track. The hardest part of any journey is that first step. Don’t get discouraged, you will have a down day a down month or even couple of months. But if you invest in good companies things will eventually turn around.
Open a STASH account & get $5 to get started
A lot of people remember the 2007 market crash and it was enough to keep some people out of the stock market forever. They lost everything. Here is what you don’t usually hear, they lost everything only because they sold. If you did absolutely nothing and kept the same stocks, you would be up today. In fact the stock market is up 33% from the high before the 2007 market crash. That’s great you literally had to do nothing and would still be up. Even more awesome, if you actually bought as the market went down you would have made even more money. The stock market is up over 200% from the low it hit in March of 2009. So if you were patient you are in the green. If you were smart, and saw the downturn as a buying opportunity you would have quadrupled your money.
I know guys this post is entirely too long, but I only do it because I love you. Let’s keep each other going and build this wealth together.
KEEP STASHing!
