Saving the first dollar you earn, versus saving what is left after you spend, is always a smart way to go. And making it automated is key. Set it and forget it!
A new smartphone app, Stash allows you to automatically save as little as $5/month and then immediately invest the same in Berkshire Hathaway Class B shares. They’ll even buy fractional shares with no trading costs. The B shares are changing hands these days at about $164/share. If you send Stash $5, then they’ll buy you 5/164th of a B share. Stash does charge $1/month or 0.25% annually, whichever is higher.
Another one, Acorns, rounds up your credit card purchases to the nearest dollar and saves the difference. You can have the pennies that Acorns vacuums up go into a savings account. And you can have Stash periodically move those savings into Berkshire.
My friend, Jason Zweig, wrote an interesting piece on Stash, Acorns and a third one, Digit in his column “The Intelligent Investor” in the Wall Street Journal past weekend:
When you buy that latte at Starbucks for $4.27 every day, it adds up. Taking those 73 cents every day and automatically investing them is such a no-brainer.