Streamline Your Finances with M1 Finance: Investing and Banking in One App
NOTE: Photos on this story are screenshots from the author
M1 Finance is a new investing platform that gives investors access to the stock market at no cost. M1 doesn’t charge any fees to buy stocks and only has a $100 minimum to get started. Because of this, it’s fantastic for young investors with little start-up capital who want to get started.
M1 isn’t like traditional brokerages where you can trade daily. Rather, it’s more automated and uses trading windows to execute trades. This means you tell M1 what you want to buy/sell and during a time block during the day it executes it. The first window starts at 10 AM EST and the second window starts at 3PM EST (requires M1 Plus).They’ve recently added a window for afternoon trades to give traders more flexibility. It is only available to M1 plus ( more about this below) members at the moment.
You can open a M1 account and get a bonus offer using this referral link.
How Does Investing Work on M1?
On M1, everything is setup in “pies and slices ”. Each slice is a stock/etf that gets a percentage of the portfolio. After you choose each slice’s percentage, they are put into a pie. Whenever you deposit money and make a purchase, the money will be divided up according to how the slice percentages are divided up. Because of this, M1 Finance does not require you to buy whole shares and instead focuses on fractional shares. This makes it easier to buy stocks that cost huge amounts like Amazon or Google. Below is an example of a pie I made with Dividend Aristocrats ( stocks that have raised dividends for 25+ years).
Naturally, some stocks will outperform others causing the slices to be unequal portions in your portfolio. M1 tries to balance your portfolio out by sending new deposits to parts of the portfolio that have underperformed and less to parts that have outperformed.
If your interested in trying out the dividend aristocrat pie, click here.
What else does M1 have to offer?
M1 Plus
M1 Plus is a paid version of M1 that upgrades your account to have additional features. These features include multiple trading windows, increased M1 Spend abilities, and reduced interest from M1 Borrow.
M1 Spend
M1 Spend gives FDIC insured banking abilities on the platform. This allows you to streamline your finances since everything is in one place.You can do direct deposit, get a debit card, and treat M1 like a regular bank. As a bonus with M1 Plus, M1 Spend gives 1% APY and 1% cash back.
M1 Spend has no monthly management fees, no minimum, and comes with 1 ATM fee reimbursement each month. All these things together makes M1 Spend a competitive option for banking!
You can open an M1 account to get the process started for getting an M1 Spend account here.
M1 Borrow
M1 Borrow is M1’s “lending arm”. Users with $10k+ are eligible to borrow at low rates through the platform without the need for extra paperwork or a credit check. When your account hits $10k, it will instantly be able to pull from a line of credit. You can borrow at 3.5% or 2% if you have M1 Plus ( at the time of this writing).
With M1 Borrow, users have access to a low interest line of credit.This further streamlines your finances because it is easy to make payments and manage everything from the app or website. You no longer need to login to multiple accounts to keep track of everything.
The Short Version: What is good about M1 Finance?
1) It Offers Automation: M1 finance is designed for those that want to setup an investment strategy and automate it. Once you design a portfolio on M1, you can setup automatic deposits and M1 will automatically execute trades for you. It will also attempt to rebalance with new funds to meet the target portfolio weights.
2) No Fees: It has no fees for trading and allows you to get started with only $100. This low startup cost allows everyone to get access to the stock market.
3) Personal Customization: You can setup a pie anyway you like. M1 does not require you to buy whole shares. They instead focus on fractional shares making it easier to get into more pricey stocks ( think Amazon). This allows you to build unique investment strategies that are truly personal. You can also recreate ETFs and avoid paying fees associated with owning ETFs.
4) Personal Finance Efficiency: With M1 Spend, you can make M1 a bank account. This makes it easier to manage your finances since everything is in one place. You can use direct deposit, pay bills, and get a debit card for everyday spending. Upgrade to M1 plus, to get an extra 1% APY and 1% cash back.
5) Borrow at Reduced Rates: With M1 Borrow, you can borrow directly on the platform. There’s no paperwork or credit check needed. Upgrade to M1 Plus to get reduced interest rates. Current ( June 2020) rates are 3.5% for non-M1 Plus and 2% for M1 Plus users.
Want to get started on M1? Use this link to get a bonus for opening an account.
If you have enjoyed this article, you might also like
Disclosure: This post may contain affiliate links which may provide compensation to me if you sign up through them at no cost to you.
This writing is an opinion based piece and should not be considered investment advice.
