Automated investing is a growing trend in the digital age and is a popular choice for investors. It’s also known as “passive investment.”
This can often be achieved with index funds, but you may want to go a little further.
M1 Finance is a powerful tool that can help you grow and build your wealth.
Many of us are busy and don’t always have the time or interest to become an expert in investing.
Platform offers many options for investing to help you achieve your goals.
Here is my M1 Finance Review and a complete overview of this tool. Use the table of content to jump directly to any section.
Short Review: I HIGHLY RECOMMEND the M1 Finance platform. It’s a solid platform for automating your investing. I rate it at 8.5/10. Sign up here to start.
Table of Contents
What is M1 finance?
M1 Finance: Is it Really Free?
M1 Finance Investing Works
M1 Finance Pros & Cons
Additional FAQs
What is M1 finance?
M1 Finance, as I mentioned in the introduction, is a brokerage platform and financial trading system that anyone can use to automate their investing.
The popularity of “passive investment” and “robo-investing”, which has skyrocketed in the past few years, is a part of this company.
M1 Finance has been registered as a broker-dealer with the SEC. M1 Finance is a member of both the Securities Investor Protection Corporation and the Financial Industry Regulatory Authority. It is important to make sure that any financial firm you choose offers money protection and adheres to the law.
M1 Finance provides a variety of personal finance tools, but investing is their bread and butter.
You can invest in fractional shares or ETFs.
Other money features include the ability to borrow money. The company boasts no paperwork, no credit checks or loan officers.
Their interest rates are among the lowest in the industry.
M1 Finance will soon offer a checking account with FDIC insurance that is directly integrated into their M1 App.
This checking account offers direct deposit, easy money transfers, and the option of a debit card.
M1 Finance: Is it Really Free?
This is indeed true. M1 Finance used to charge a fee of only 0.25%. However, they switched over to a platform that is free.
Yes, you read it right! No trading commissions or account fees are charged.
Only unique transactions are subject to fees.
If you decide to close your retirement account with M1 Finance, you will be charged a $100 account closure fee. This is standard for brokerage firms.
There are also fees that may apply if you want to receive paper statements or wire transfer. Here you can find out about all of the fees.
They also offer investors an upgraded tier, called M1 Plus. This is currently $125 a year. You now have a few more options with M1 Finance.
The upgrade, for example, offers a discount on interest rates on loans, increased investing options, 1% back on debit card purchases, interest earned on your account, and other small benefits.
How does M1 Finance earn money?
How else does M1 Finance make money now that you’re aware of the free tier and paid option?
In most cases, the company makes money by charging interest to account holders on loans.
M1 Finance lends securities purchased by its customers to other investors who will also earn money on these loans.
M1 Finance Investing Works
The robo-advisor offers other services but their investment feature is their most powerful product.
There are many account types available, including a joint account with a relative or spouse. Retirement accounts (traditional IRAs, Roths, SEP IRAs) and Trust accounts are also available.
Their Pie-based investment interface is unique. It makes it easier to build and manage an investment portfolio.
You can choose from more than 6,000 funds and stocks to create Custom Pies. Or, you can select from over 100 Expert Pies that are designed to meet different investment and financial objectives.
Customization:
Choose investments to add to “Pie” – these are the slices
You can set the weight target for each slice
Your pie will be funded and money added according to your percentages
Add, remove or edit your slices anytime
M1 Finance has a variety of templates that you can select from.
Your options will be carefully created by experts and brokerages.
M1 Finance Investing
Why M1 Finance is the best choice for investors
Many people prefer to invest money in a way that is simple and does not require constant monitoring and headaches.
Here are some reasons why people use M1 Finance.
After you select or build your portfolio, M1 will do the rest.
Rebalancing is easy and helps you keep your asset allocation on track.
You can set a deposit schedule to control the frequency and amount of cash that is deposited into the app.
You can build wealth by investing fractional shares as low as pennies
When you sell securities, they use a tax efficient allocation strategy that helps reduce your taxes.
With their platform, you can earn more and compound your interest.
Platform that is easy to use, visually appealing and provides news and insights about your investments
Getting started
Opening an account at M1 Finance is easy. It takes very little time to get started.
To get started with M1, you will need a $100 minimum balance. After the $100 minimum account balance is reached, you can deposit any amount over $10.
For retirement accounts, the minimum investment is $500.
You will need to provide some basic information in order to create a free account. These details will be used to verify your identity.
The next step is to link your bank account. You will use this account to deposit money into your M1 Finance Account. This is also the account where you can transfer money back to your bank.
After creating your account, you can start investing and building your “Pie’ portfolio.
Pros and cons of M1 Finance
After all of that, you may be wondering what the pros and cons are of the platform. Here are some pros and cons based on my research into M1 Finance and my interest.
M1 Finance has its pros and cons
Options for trading fractional shares
No account management or trading fees
Open a low-minimum investment account
Multiple account types (IRA, Trust, Taxable, etc.)
Options for investing in stocks and ETFs
Automated investment and portfolio rebalancing
Cons of M1 finance:
Other robo-advisors do not offer tax-loss-harvesting.
The free version only offers a morning trade window, while the paid version also includes an afternoon trade.
You cannot contact a financial advisor if you need help.
M1 Finance would be a good option and choice for new investors. Due to the low minimum deposit and lack of fees, anyone can get started for a relatively small investment.
M1 Finance will help you get started and learn about investing. It also allows for a hands-free approach.
GET STARTED WITH M1 FINANCE
Additional FAQs
There are always questions about any platform. M1 Finance has a fantastic education center, but here are some common questions that people have.
M1 Finance: Is it a reputable company?
M1 Finance can be trusted to invest your money. The company has been registered as a broker-dealer with the SEC and is a part of the Financial Industry Regulatory Authority, Securities Investor Protection Corporation and Financial Industry Regulatory Authority.
M1 Finance also uses 256-bit SSL data encryption and keeps your money with a third party custodian.
Can M1 Finance issue fractional shares?
M1 Finance allows fractional share investing, which is beneficial to you as an investor. It doesn’t really matter whether you own a full share or not. M1 will buy fractional shares of your contribution, regardless of the amount.
What is M1 Finance good for beginners?
M1 Finance offers a good choice to both beginners and experienced investors. M1 Finance’s easy-to-use platform, simple investment options and choices and automated approach make it a great choice for beginners and advanced investors alike.
