After a Year of Using M1 Finance, Here’s What I Do & Don’t Love


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M1 Finance is an funding app that provides expert-built portfolios, recurring investments, dynamic rebalancing and the power to borrow in opposition to your taxable accounts, amongst many different options.

Its premium possibility offers entry to custodial funding accounts on your children, a high-yield checking account, crypto buying and selling, margin loans, and a rewards bank card.

I’ve been an M1 Finance buyer for greater than a yr and I believe it is a strong investing app for brand spanking new buyers.

There are fairly just a few issues I like in regards to the app, and a few issues I believe they might do higher. I jotted down just a few notes on my expertise utilizing the app to share with you. Here’s my frank evaluation of M1 Finance.

The Short Version

  • After utilizing M1 Finance for my Roth IRA for greater than a yr, I’m very happy with the app general.
  • The investing pies, recurring investments, entry to shares and funds, dividend tracker, and fractional share investing are all wonderful options.
  • Where M1 Finance may enhance is the restricted commerce home windows, dividend reinvestment and entry to custodial accounts.

My Year of Using M1 Finance

After researching and making an attempt out greater than a dozen investing apps over time, I opened a Roth IRA with M1 Finance in 2021 to assist automate my investments and provides me entry to my favourite index funds. The sign-up course of was easy, and the cellular app walked me by the whole lot.

At first, I solely needed to put money into a single index fund, however I used to be pressured to decide on three investments to construct my “investing pie” after I began. It was a little bit of a trouble to regulate my asset allocation, however this was a wonderful technique to initially diversify my account.

After that, I may switch funds with just a few clicks, and the app routinely invested the cash in accordance with the pie I created. Over the previous 12 months, I deposited funds periodically. Though the market isn’t doing nice proper now (boo!), it’s straightforward to see my steadiness, asset allocation, and complete return on funding inside the app.

Overall, the app is straightforward to make use of; I can present my household and buddies the way to get arrange pretty shortly. The fast entry to hundreds of funding selections is good, and enhancing my asset allocation in my funding pie is simpler than with another app I’ve used. So, after greater than a yr I’m nonetheless a fan of the app, although there are some things I’d prefer to see enhance.

Five M1 Features That I Love

M1 Finance retains including options, however listed here are just a few of my favorites:

1. Investing Pies

The funding pies are an important visible illustration of the property in your portfolio. They make it really easy to see how my cash is invested. I can shortly add or take away property from the pie, after which M1 Finance will routinely readjust my portfolio primarily based on my pre-selected asset allocation.

When I created my preliminary pie M1 Finance needed to make me put money into three funds (at a minimal). I get why they require this (for diversification), however on the time, making an attempt to create a single-fund pie was a ache. However, since them M1 Finance has up to date the function, and it’s now insanely straightforward so as to add or take away a “slice” out of your pie.

Overall, it is a unbelievable function that helps newbies to grasp their asset allocation.

Read extra >>> Asset Allocation: Filling Your Portfolio with the Right Mix

2. Recurring Investments

M1 Finance makes automated investing straightforward. You can arrange a recurring funding on a schedule. You can select how a lot you wish to deposit and choose the frequency, whether or not or not it’s weekly, bi-weekly, or month-to-month — or no matter you want.

Since I’m an enormous fan of dollar-cost averaging in my investments, that is one of the best set-it-and-forget-it method.

And, since M1 Finance has you create a pie beforehand, it’s going to routinely make investments your cash the place it must go.

For instance, if you happen to set your pie to include pie 60% in index funds, 30% in bonds, and 10% in shares, M1 will break up up your deposit accordingly. Overall, its an important function and tremendous straightforward to arrange.

3. Access to Stocks and Funds

Unlike another robo-advisors and investing apps, M1 Finance offers you entry to extra than simply index funds. With hundreds of shares and a whole bunch of funds out there from all the highest corporations, M1 Finance is like combining all one of the best brokers right into a single app.

For instance, I’m a fan of Vanguard funds, however I additionally just like the zero-fee funds from Fidelity. With M1 Finance I can add whichever funds I like, plus I can decide shares from just a few of my favourite corporations, all inside the identical portfolio. I may even share these pies with family and friends who wish to study extra about how I’m managing my cash (dangerous, I do know). Overall, the choice is nice, and there aren’t any buying and selling charges.

Read extra >>> Investment Fees Matter… a Lot!

4. Dividend Tracker

While I haven’t constructed a sizeable-enough portfolio within the app to get pleasure from a hefty dividend payout (but), it’s good to have the ability to observe all of my dividends in a single place. On the app, I can click on on my funding pie and swipe over to see the main points of my portfolio beneficial properties and losses.

The dividend part exhibits the cumulative dividend payouts for every funding. While I haven’t constructed a whole dividend portfolio but, it’s good to see that my investments create passive revenue, and its straightforward to trace efficiency over time.

Read extra >>> How to Invest in Dividend Stocks

5. Fractional Share Investing

M1 Finance gives fractional share investing, which suggests I can put money into my favourite index fund or inventory for as little as $1. With different funding apps, I’ve had to purchase complete shares. This made it difficult to plan my investments since share costs are ever-changing and typically value a whole bunch of {dollars}.

Fractional shares are additionally best for recurring investments; I can switch small quantities of cash to make common purchases as an alternative of sitting out of the market ready for extra funds to make a single bigger buy.

Note: While you’ll be able to make investments as little as $1 at a time in particular person shares, the minimal Auto-Invest quantity is $25.

Three Things I Don’t Love About M1 Finance

M1 Finance is a well-designed app, however there are some things I don’t like about it:

1. Limited Trade Windows

While M1 Finance gives entry to particular person shares and ETFs with no commerce charges, you’ll be able to’t benefit from a drop available in the market throughout the day as a result of there are restricted commerce home windows when M1 executes trades.

For free customers, there’s a single commerce window at 9:30 am when the market opens. That means if you happen to purchase a inventory after all of the trades execute and the window has closed, the commerce gained’t execute till 9:30 am the following day. If the inventory drops by 10% and recovers throughout the day, you miss out on some severe beneficial properties.

You can entry a second commerce window with an M1 Plus account (at 3 pm), however that is nonetheless very restricted in comparison with different inventory buying and selling apps like Robinhood or Webull.

2. Dividend Reinvestment (DRIP) Isn’t Great

M1 Finance gives entry to a whole bunch of shares and funds that pay out dividends. One of essentially the most highly effective investing methods is to reinvest these dividends by shopping for extra of the identical asset. And whereas most apps can reinvest the dividends routinely, M1 Finance requires you to activate the “Auto-invest” function.

This function routinely invests money balances in your M1 account into your pie, however there’s a minimal restrict of $25. This means dividends beneath $25 will sit in your account until you manually place the commerce. This is annoying, and I want they’d enable me to activate dividend reinvestment with a single button.

3. You Need M1 Plus To Open a Custodial Account

I’ve 4 children, and I wish to assist them get a head begin by opening a custodial account. Naturally, I checked into M1 to see if I may simply open them by the app. Unfortunately, M1 Finance requires an M1 Plus account and limits it to 2 custodial accounts per buyer, so it was a no-go.

These limits are clearly put in place to encourage customers to improve their accounts to unlock this function. I couldn’t justify the $125/yr value for under entry to 2 accounts nevertheless, it is likely to be value paying for if you wish to maintain all of your accounts at a single dealer. I ended up going with Fidelity, which doesn’t cost something for limitless custodial accounts.

The Bottom Line: M1 Finance Is Great for Beginners

M1 Finance is a well-designed app I like to recommend to household and buddies to start out their investing journey. With the guided setup that helps customers create a diversified portfolio, entry to knowledgeable pies, recurring investments, and the power to speculate as little as $1, M1 is my go-to app. I’ll maintain funding my Roth IRA passively, however I’ll use one other buying and selling app for energetic investing.

Further studying:

M1 Invest Disclosure: This article shouldn’t be funding recommendation. All investing includes danger, together with the danger of dropping the cash you make investments. Past efficiency doesn’t assure future outcomes. Brokerage services provided by M1 Finance, LLC Member FINRA/SIPC, and an entirely owned subsidiary of M1 Holdings, Inc.
M1 Plus DIsclosure: M1 Plus is a $125 annual subscription providing services from M1 Spend LLC and M1 Finance LLC, each wholly-owned, separate however affiliated subsidiaries of M1 Holdings Inc.


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