Choosing the right investment platform can make or break your financial situation.
Fees and other expenses can mount up to tens of thousands of dollars throughout a lifetime. So, if you hear about a company like M1 Finance, which claims to be able to develop an investment portfolio for free, you’re probably curious.
Which one is free?
Is there a catch?
How does M1 Finance stack up against other free brokerage services?
This review will go over M1 Finance to see if it really is the best investment tool out there.
You’ll learn whether stock investing is the right online business for you.
And at the end, you’ll find answers to some of the most frequently asked questions regarding M1 Finance and stock investing in general.
But most importantly, you’ll see the exact system many others have used to build their own internet marketing business to over $40,000 a month in mostly passive income.
This system made them swear off stock investing for good, because it uses some of the same skills but in a much more powerful and profitable way!
M1 Finance is a robo-advisor and financial platform that incorporates elements of several existing investing services.
The company was established in 2015 & is situated in Chicago, Illinois. M1 Holdings Inc. is its parent company.
M1’s assets under management now exceed $3 billion.
Brian Barnes, the company’s CEO, founded M1 because the financial services industry has lacked substantial innovation for far too long, and he decided it’s time for a change.
Barnes then did just that: he built a one-of-a-kind, revolutionary product. M1 is an excellent place to start if you’re not sure how to purchase stocks.
M1 Finance automates your investing, so you don’t have to. However, it also allows you to hand-pick your investments, which is something that most other robo-advisors do not provide.
It is similar to other robo-advisors in that it refers users to a questionnaire that assists in risk assessment.
Other robo-advisors may merely use this questionnaire to establish your stock/bond allocation, while M1 uses it to recommend multiple portfolios.
Those with a lower risk tolerance will hold more bonds, while those with a higher risk tolerance will hold more stocks & exchange-traded funds (ETFs).
However, these are merely recommendations. You can still build your own bespoke portfolio from the bottom up.
M1 Finance is a FINRA member. The SIPC insures each investment portfolio up to $500,000 in value.
Furthermore, the FDIC will protect up to $250,000 in cash in M1 Spend. In addition, unlike other popular apps like Robinhood, there is no trading commission.
M1 Finance gives you the best of both worlds: it’s a free robo-advisor that helps you find the ideal mix of assets based on your goals and risk tolerance, as well as a classic online brokerage where you may invest in individual stocks and ETFs with no trading fees.
M1 Finance’s key advantage over other robo-advisors is that it does not charge asset management fees.
For comparison, many robo-advisors charge .25 percent. Financial advisors typically charge around 1% each year.
M1 Finance provides brokerage services since you can invest in individual stocks & ETFs (but not crypto). When trading equities or exchange-traded funds, there are no costs.
Aside from selecting which stocks and ETFs to invest in, M1 allows you to design a “Custom Pie” or select from an “Expert Pie.”
M1’s “pie” investment technique is similar to mutual funds in that it helps you diversify your portfolio by allocating portions of it.
You have the option of creating unique pies, selecting professionally curated “expert” pies, or allocating your investments to a combination of both (for example, a pie of pies).
When your cash balance reaches $10 or more, M1 Finance will invest new funds.
M1’s investment pies are the major characteristic that distinguishes it from other investing platforms.
Pie investing allows you to create a personalized, easy-to-manage portfolio. Furthermore, you can purchase fractional shares, making investing both enjoyable and profitable.
Investment pies enable investors to design “pies” in which each asset represents one slice. These slices could be bonds, stocks, or exchange-traded funds (ETFs).
M1 will automatically balance each piece to match your goal allocation each time you invest.
These pies are what they sound like: individual “slices” of specific stocks, bonds, or low-cost ETFs. They can also be adjusted to any level of risk tolerance.
When you initially sign up, you’ll be asked to choose three stocks, funds, or expert pies. You can also conduct your search if you prefer.
M1 Finance’s site contains thousands of different equities, stocks, and ETFs, so you should have no trouble choosing the ones you want to buy.
M1 Finance, however, does not provide mutual funds.
You will not be asked to submit an initial deposit when you go through the setup procedure. However, to begin investing on the platform, you must first deposit at least $100.
A $500 initial minimum investment is required for retirement accounts.
It’s also worth noting that there’s a $10 minimum for each deposit if you wish to enable automated deposits.
You’ll be asked to add your bank account via Plaid during the setup procedure. You’ll see a list of popular banks, or you can search for your bank if it isn’t listed.
You can also manually add your bank by entering your routing and account details.
M1 Invest allows you to open taxable accounts, joint, and Roth IRA accounts. You can also put your money into a Traditional IRA, Rollover IRA, or SEP-IRA.
The M1 Invest platform from M1 Finance provides pie templates for a variety of investment categories.
This encompasses all types of investing, such as general, retirement, income portfolios, and hedge funds. As an extra bonus, M1 provides tools for socially responsible investing, allowing you to invest while making a good impact.
M1’s new service, Smart Transfers, was launched in October 2020.
As previously stated, M1 Finance offers the standard taxable and joint account options and Roth, Traditional, and Rollover IRAs.
A minimum deposit of $500 is required to start a retirement account. Each retirement account enables you to select your own investments.
We enjoy how the program incorporates pie portfolios for impact investors. Fortunately, socially responsible investing is not a fad or a trend; it is here to stay.
Other leading robo-advisors are also incorporating choices for socially responsible investing into their portfolios.
What are the disadvantages of M1?
We discovered two: there is no provision for tax-loss harvesting, and there is no possibility to invest in mutual funds. Investors can invest in a wide range of ETFs and purchase fractional shares of stock, so your options aren’t precisely limited.
M1 Borrow, on the other hand, is a low-cost line of credit that enables you to borrow against your M1 Invest balance.
You can borrow up to 35% of your portfolio account value at a base interest rate of 3.5 percent if your total account balance is at least $5,000.
This line of credit can be used as an emergency fund, for a significant purchase, or to consolidate higher-interest obligations. Members of M1 Plus can borrow at a base rate of 2.0 percent.
Borrow can also be viewed as a Margin Account, implying that you can use and reinvest the money you borrow.
Please consider that there are certain additional risks associated with margin accounts, but the idea is that by investing it, you can make more than the borrowing rate (2.0 percent – 3.5 percent ).
M1 Finance released its M1 Spend account in mid-2019, a free checking account with direct interaction with your other M1 services.
This checking account requires no minimum balance, has no monthly or annual fees, and is FDIC-insured up to $250,000.
If you like to keep track of your personal finances in one location, M1 Spend is an excellent alternative.
You’ll be able to transfer funds between M1 Spend, Invest, and Borrow accounts. M1 will also send you a Visa debit card to use at stores and at ATMs.
An M1 Plus account adds additional perks to this account.
M1 Plus is the premium membership program offered by M1 Finance. You get various benefits for the $125 annual fee:
Yes, M1 is a secure & reliable company. M1 is a member of FINRA & your cash deposits are FDIC-insured. In addition, investments are SIPC-insured.
Thus, M1 Finance is trustworthy, and you do not have to fear that your money isn’t secured.
Regardless of the fact that M1 is pretty new, there is little cause to have worries about the company. Moreover, M1 is an American corporation situated in downtown Chicago, IL—not some distant foreign country.
M1 Finance is an outstanding, free robo-advisor for individuals getting started with investing and others who want to set it and forget it.
Free trades, fractional shares, and simple asset allocation are excellent features that make investing effortless on the platform.
If you’re only getting started or want to eliminate friction in your periodic investment, I highly recommend M1 Finance.
There is no access to futures, mutual funds, FX, or options investment. There are also limited charting tools and indicators. Lastly, the basic educational courses cater only to relatively new investors.
If you borrow money through M1, your account may be subject to maintenance calls if the value of your investments falls.
Having too many alternatives can be detrimental at times. While it’s fantastic to have a variety of portfolios to select from, complexity isn’t always a good thing.
Investing entails risk, including the danger of losing the money you put up. Past performance is not a guarantee of future results.
Utilizing M1 Borrow’s margin account can add to these risks, & users should understand more before borrowing. When it comes to your personal finance and cash management, it is important to seek professional advice.
Below are the initial deposit minimums:
Individual accounts: Minimum of $100.
Retirement accounts: Minimum of $500.
After the initial deposit, you can deposit any amount greater than $10.
SIPC (Securities Investor Protection Corporation) safeguards against the loss of cash & stocks held by a client.
SIPC protection is up to $500,000 which includes a $250,000 maximum for cash.
SIPC does not protect you against any drop in the value of your securities. The company’s clearing firm, Apex Clearing, has also obtained extra insurance if SIPC limitations are exhausted.
M1 Spend & M1 Plus accounts are FDIC insured up to $250,000 and further covered by Lincoln Savings Bank.
Yes, you can make money using M1 Finance app.
There’s a lot that comes along with stock investing that many people struggle with.
Now, don’t get the wrong idea…
It’s not impossible to make money with stock investing, but if you’re gonna put in the amount of grueling work to do this business (which, trust us, isn’t easy), you might as well bring in some REAL money while you’re learning the ropes.
The program that helped skyrocket many online businesses to over $40,000+ per month is so simple that making money really does become second nature.
M1 Finance is not a scam.
It is entirely possible to build a profitable, successful stock investing business… But there are better ways to build a business other than with stock investing.
Because unlike M1 Finance, it actually provides real proof of real success from real people as recently as a few days ago.
M1 Finance is a legitimate company.
But, when it comes to building a business, you have plenty of options.
And even if you’re dead set on becoming an investor, you’ve got way better options than M1 Finance.
Keep in mind, we don’t get paid to promote any of the programs we review. We personally think stock investing is a great business model, but you could end up leaving way too much money on the table.
Our review team has come across a program in the real estate industry that is next level!
Although it’s not real estate in the traditional sense, it’s all digital.
Where M1 Finance falls short is in scalability.
There’s only so much time in a day and there’s only so much money you have to start with.
Let’s face it, unless you have a lot of money to start with, you don’t stand to make much money with cryptocurrency.
But what if you could make even more money off of little local websites without having to worry all day about losing your money in the blink of an eye?
With this digital real estate program, you can make recurring monthly income without worrying about losing all your money overnight!
Sound too good to be true?
Of course it does! But it isn’t…in fact, business owners wish they had this skill!
All you have to do is build and rank a LOCAL website and forward the jobs off to a business owner in town, you could even email it to them!
This works for literally any service based business, tree service, plumbing, towing, etc.
Simple, after you forward the jobs off to a business owner and he makes some money off of them, you simply ask to make the deal beneficial for each other.
A fair price to charge per lead, depending on the industry is 10-20%…let’s just use the tree service industry for example, and go by worst case scenario.
Let’s say you build and rank the site and only 10 jobs a month come in. The average tree service job is anywhere from $500-$2000!
That means at bare minimum you have an asset worth $500 a month!
See why they call it digital real estate now? That’s a rent payment.
The great thing is how easy it is to scale. You don’t have to worry about the constant and crazy market volatility that cryptocurrency entails.
So, getting back to M1 Finance, if you take one of their picks…you could lose BIG TIME.
The course we recommend actually allows you to collect HUGE FLAT RATE DEALS. Truly passive income!
The training program takes making money online to a whole other level. The owner of the program walks you through how to build and rank a site hand in hand, with the occasional voice over when he is sharing his screen.
You will learn the importance of keywords, website name, how to send call notifications via email, backlinking, etc.
Once the training program is completed you will also have access to their Facebook group.
A business will always want more leads and another job. In fact it doesn’t even matter that the job isn’t coming from their website name…they see it as it is…expanding digital real estate.
Unlike M1 Finance, more people have been able to walk away from their 9-5 job as well.
Digital real estate allows you to have passive income with most of your day being spent ENJOYING your money, NOT losing it.
Now, I know you probably have tons of questions…