I've been investing with both of these apps for about two years now and they are very very different
So if you're looking for guidance on which one to go with you're in the right place
So keep watching for a detailed honest review. What is up everyone? I'm rose and welcome back to my channel
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I'll compare betterment versus stash in terms of investment approach or how your money gets invested
also in terms of safety and a discussion of the risks involved cost and
Finally of funding options and account types offered. So let's get started before signing up for any investing app. It's important to understand
How is your money going to get invested staff and betterment have very different approaches to investing? So let's talk about that
Stash is a platform that simplifies investing for the everyday person
So what's cool about this app is that they completely eliminate typical financial jargon on their interface
For example when you're scrolling through the list of investments on the stash interface
You'll see that everything is in really easy to understand language this small
but mighty
ETF if you click into that you'll see that it's actually an ETF that gives you exposure to a bunch of companies that have small
Capitalizations now if you're a beginner, if you saw an investment called small cap companies, you're not gonna know what that is
So that's kind of the good thing about stash is that they list everything in terms of everyday language that anyone can understand
This is cool
Because for most people what they say is what is most intimidating about getting started investing is navigating through a bunch of financial
Jargon, so stash completely takes out all this intimidating technical language to make choosing investments as easy as possible for you
Now the thing with stash is that it's totally up to you to do your own research
And pick what stocks you want to buy on the other hand betterment will create a portfolio for you
For example, here's my betterment portfolio. They created this for me based on basic inputs
my my timeline the target amount and
Etc. So my money is invested in all these ETS and I'm actually not the one picked them versus ATS - my money is invested
in just two ETS that I've picked the women who lead and the do the right thing fund and
You know
It was kind of like shopping in a grocery store and I was just picking what ETF's I wanted in my stash portfolio
Investing at stash is like having someone hand you an empty grocery basket and they tell you here
Just put whatever you want in it and then investing at betterment is like having someone who's very knowledgeable
And qualified just hand you a ready-made basket that has a bunch of goodies already in it
Do you want to pick your own investments or do you want someone to do it for you?
It's definitely more fun to choose your own stocks the way you can do on stash
But that also means you have to do your research and you have to know what you're doing
I could easily see someone who doesn't know what they're doing
Just kind of put all their money into stocks and then they're hoping they'll have enough in there to buy a house in five years
But the thing is if you need to cash out on your investments in five years
You should have most of your money invested in bonds not stocks
So there needs to be a lot of intent
Intentionality and thought behind how you invest your money and the average person doesn't know how to do this
So that's where a betterment wins over stash for beginners
You don't know what factors to consider when choosing your own investments
so letting
betterment create the portfolio for you is better than shooting in the dark and trying to figure it out on your own other things you'd
Need to consider as an investor is things like taxes, you know short-term versus long-term capital gains
so
that should factor into when you buy and sell and this is all stuff that you wouldn't necessarily know how to do if you're just
Starting out betterment will take care of all those things for you. They do something called thrift loss harvesting
So they'll only buy and sell investments in a way that is
That makes sense for your tax situation to minimize your tax bill now with stash. They're not gonna do any of that
so if you don't
You know know about the tax considerations you should have as an investor
Then I think betterment would be better for you get it betterment better now
Let's talk about safety and some of the risks involved with each app
They're both registered with the SEC
Which means that both betterment and stash are legit and they can't lie and cheat you they're also insured by the S
IPC which means that even if the but he goes bankrupt you'll get your money back because they have insurance
These are basic requirements for any investing app
So I'm happy to say that both stache and betterment are covered in that sense
But I also want to make a comment about investing risk as with any type of investing
There's no guarantees that you'll make money all investing involves a risk of loss
But the question is do know what you're doing over time informed investors make money
so
You know stash and betterment are no different in that regard
Whether you make or lose money will depend on how good of an investor you are
So if you make an investment just because you feel like it and then you sell it when you get scared
Then you're probably gonna lose money
So regardless of whether you go with stash or betterment, what's risky or not?
depends ultimately on you and how you use the app now for a quick comparison of cost betterment charges an annual percentage fee of
0.25 percent and stash charges a monthly fat flat fee fab fee
$1. So if you had say 1,000 dollars to invest then betterment would charge you an annual fee of
$2.50 and then at stash you'd pay a $1 a month or annual fee of
$12 a 12 dollar fee on
$1,000 is 1.2 percent. Annually, that's almost five times more than betterment
You also have to keep in mind the level of service that you're paying for
So stache doesn't really do anything other than presenting investments to you in easy-to-understand language
They do have a lot of in-app education and articles to help you learn
But they're not really doing any investment management for you
you know with betterment you're getting full service advice and
24/7 portfolio management and they're buying and selling and you know adjusting your portfolio at all hours of the day
So you definitely get a much higher level of service and I think more bang for your buck at betterment and finally
Let's talk about funding options and account types offered by each app - offers roundups
So that's a really cool funding option where you can invest with your spare change by rounding up your debit card and even your credit
card purchases
Betterment on the other hand doesn't offer the roundups feature
I really don't mind this about betterment because it's not like investing spare change is gonna make me a millionaire. That's just ridiculous
What's actually gonna make you a millionaire is committing to making regular deposits?
Weekly bi-weekly monthly and then automating it so while the roundups feature is nice and every cent counts
I still don't think stash is worth the fees
Especially if you're investing tiny amounts of money betterment also offers a couple of accounts
That stash doesn't offer such as joint accounts and SEP IRAs
Step IRAs are meant for anyone who's self-employed and doesn't have a 401k. So if you're self-employed
Make sure to check out this video here to find out more about SEP IRAs, but bottom line is betterment offers more account types
So that it's a little bit easier to have all the accounts you need in your financial life just in one place
Where a stash is a lot more limited in their options. Which one are you leaning towards stash or betterment?
Let me know in the comments and let's discuss in a nutshell betterment creates a fully diversified investment portfolio
For you while stash just gives you the tools and the easy to navigate
Interface so that you can create an investment portfolio on your own while both apps are registered with the SEC and they are SITC
insured the level of risk involved ultimately depends on how thoughtful you are about choosing your investments as
for costs you get a lot more for your money at betterment since they do full portfolio management for you and stashes flat fee is
Especially not worth it if you have $1,000 or less
Because the monthly fee works out to be a big percentage of your account balance lastly betterment offers more account types than stash does
including joint accounts and SEP IRAs
So if you have a significant other or you're self employed then betterment might be a better fit for your needs
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