Investing for millennials: A new app

Stash, the investment app that’s got young people talking and investing, is coming to the iPhone. We took a closer look.

People want to believe in the companies they invest in.

This is where Stash comes in – the investment app already available on Android.

The app has seen over 17 000 South African downloads since May. Good news for Apple fans – the app is also coming to iOS in October.

Getting the younger generation interested in investment, however, can be challenging. Younger people have no real interest in playing the market. Most are too focused on building a career, a family or working on their social lives.

It’s important, though, to give these vital financial activities some attention. We know that just mentioning the JSE has most millennials’ eyes glazing over with boredom.

Add to that a general sense of indifference – a few days ago Rand Merchant Bank released their ‘Where to Invest in Africa’ report for 2018. In it, South Africa was knocked off the top spot for the first time in seven years – replaced by Egypt.

South Africa has seen sluggish growth rates. Over the last seven years our economic activity score has, shall we say, crumbled, declined, deteriorated, languished, regressed and been cast headlong into a swirling abyss of hopelessness.

Good times. And this sort of news is yet another reason why young people couldn’t care less about investing their money anywhere.

Stash aims to change that.

What is stash?

Launched by insurance and investment company Liberty, Stash aims at getting South Africans to invest. How does the app do this? Every time you swipe, every time you sweat and every time the sun shines.

You can link any credit, debit or cheque card from your major South African bank to the app. When you make a transaction with the linked card the amount is rounded up to the nearest 10 and the spare change is stashed into a Liberty fund that tracks the top 40 companies on the JSE.

All this spare change accumulates. Before you know it, you’ve got a significant Stash balance. Another good thing is that the app won’t interfere with your day-to-day life. The app will check your daily bank balance and won’t transfer more than you can afford, so you don’t have to worry about running into the red. There are no minimum deposits, either. If you spend R9.99, that 1c gets invested.

Stash is incredibly easy to use. It’s perfect for those who are slightly intimidated by the idea of investment or the power of the stock market. You don’t need to fill out any forms, print, scan, or send in any documents.

It takes a lot of time and energy to do proper homework on individual stocks. Make a bad choice and, just like that, your money is gone. Stash makes it easy and painless. Their ETFs (exchange-traded funds) are already researched and less risky.

Stash investment tools

Liberty is primarily targeting users between the age of 18 and 28. Young people don’t tend to invest or save their money. This is mostly because of how complex it can get. So, Liberty have made the app really easy to use and designed it in a way that it ‘speaks’ to younger people.

Their Sweat option is designed for people who like to keep active. The app can stash money based on your fitness data. Stash uses Google Fit to work out how much money to stash on a daily basis. For every 100 steps, 100 metres, 20 calories and 20 seconds of activity, you’ll collect one drop. One drop stashes 5c.

With Sunny Money, the app receives weather data from Open Weather Map using your location. On sunny days, you stash money, presumably for those dreaded rainy days.

You can choose to stash R5, R10, R20 or the maximum temperature of that day in rands. Bad news (or good) for people living in Upington, then.

With both of these features, you can also set a monthly limit to the amount that gets stashed.

Any problems?

With Stash, beginners can take advantage when it comes to tax-free investments. In other words, you don’t pay tax on the cash you’ve stashed. You’re not taxed on the growth of your money, nor penalised when you cash out – and you can put in or withdraw money whenever you like. That sounds great, but only for beginners.

There’s an annual limit on the amount of tax-free money you can invest, and the app only offers a tax-free version, for now.

So, for those who have already assumed the ultimate adult form, you won’t be able to exceed the R33 000-per-annum limit without excess penalties.

If you want to invest more than R2 000 a month or want to cash out – you’ll have to be FICA registered. This is usually a hassle. With Stash, all FICA requirements are completed in-app. Users are able to submit proof of address by snapping a picture of, let’s say, an account statement, with their smartphone. Easy.

Just to sweeten the deal, Liberty is giving all new users R50 to start out with, and an additional R10 for every friend you get to sign on.

Now that we think of it, there don’t seem to be many problems at all.

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