M1 Finance Review: Is It Worth It? (2024)

Nowadays, people look for ways on how they can invest their money. M1 Finance is one of those ways. In this M1 Finance review, you will learn everything to get started with automated investing and self-directed trading.

Most people are eager to earn more money that would add up to their savings. There are many opportunities to make money. It may be a side hustle or a full-time gig for which you need high-income skills. Regardless of the two, both should help you earn more in order to achieve the financial freedom you want in your life.

With the pandemic that we are experiencing, many people opt to stay home and have more time for their extra income activities while spending less.

What could you do with that money?

You could invest it. Passive investing is a popular trend that doesn’t only have to be low-cost index funds. With M1 Finance, you can be a passive investor with a more complex investing strategy.

Are you ready? Then, let’s get started.

What Is M1 Finance?

M1 Finance is a stock and ETF brokerage that helps you invest in stocks. You can start investing with M1 Finance with as little as $100. That $100 is all that is required to open your investment account.

Many people even consider M1 Finance to be one of the best robo-advisors currently available on the market. You have the option of self-service or automated investments, whatever fits your needs.

M1 Finance is a one-of-a-kind online money management application that allows self-directed investments, automated investments, an IRA account, buying and selling shares, and much more. These tools should help you with your investment journey. Even if you are new to the platform, these will help you in the long run as an active or passive trader.

M1 Finance has transformed its investment platform to a whole new level. In this way, users can manage their finances with a lot more options and invest their money for later (retirement) goals.

A one-stop shop for your investment needs.

With M1 Finance’s automated investment options, it can help you generate a passive income stream without putting in much effort to continuously keep up with the stock market.

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But what makes it better than the rest of the other similar applications available?

Well, this M1 Finance review is here to help you figure out just what makes M1 Finance so unique!

How Does M1 Finance Work?

Before we start with our M1 Finance review, let’s look at how it works and what makes it different from the other online brokerages. From here, you will be able to study and learn the platform more before you start your investment journey.

Create Your Own Investment Strategy

The thing that stands out right from the beginning is the interface. M1 Finance has made excellent use of showing your investment portfolio in the form of a Pie. The pie represents 100% of your investment, and each slice corresponds to a specific stock or ETF fund that you have invested in.

You can customize your pie in terms of investment priority and percentages. For example, if you have decided to invest 0 and have chosen Apple and Microsoft to be a part of your profile, you can set up the percentage of your investment that would go to each stock.

Each stock represents a slice. You have complete control over your portfolio, wherein you can set the target weight of each slice. The percentage of the stock remains the same with future investments in your portfolio.

At times, the percentage might get pushed around a bit. However, as soon as new capital is invested, the app will automatically rebalance the allocation to assume your target goals.

Take Industry Expert Strategies

If you are new to day-trading and are looking for help to get you started, M1 Finance has predefined pies designed by industry experts to help. This would help you decide which stocks, ETFs, or portfolios you want to allocate your investment.

The predesigned pies are divided into the following categories:

• General Investing
• Socially responsible investing
• Retirement Investing
• Sector-specific investing
• Hedge fund-based investing
• Stocks
• Bonds

A user can select the amount of risk involved and the levels of profit they could expect.

Making It Easy With Auto Invest

The ability to auto-invest is the one thing that M1 Finance offers that is different from any other online brokerage. It allows you to reinvest your profits and dividends as soon as they reach a specific predefined benchmark. This is an option to set auto-invest to automatically spread your money from the stocks and ETFs that you choose.

Dividend reinvestment provides a fully automated investment portfolio where you don’t need to worry about moving investments or balancing your portfolio!

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M1 Finance Fees

M1 Finance is free to use for its users, unlike most stock-trading applications present on the internet. There are no trade commissions, mark-ups, or bank transfer fees.

You can set up an account and start investing without having to pay a single penny in fees. This allows new investors to see the platform first and check the services being offered. Instead of being pressured to recover the initial fees paid during registration, you can browse the platform and decide if you want to use it.

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Now, that’s an excellent way to start investing, especially for beginners who are just starting to grow and invest their hard-earned money.

The day you deposit money into your account is when you can begin buying and selling stocks, bonds, or ETFs.

There are no hidden fees or brokerage charges. You will not be charged any trade commission or markups on transactions. There is no platform usage fee nor a deposit or withdrawal fee when you use your bank account.

However, there are additional services that have a fee. Some of them are:

There are a few other added services that you can use at a cost. Although, most of these services are not something that you, as a regular trader, would need. But these are available in the platform whenever the need arises so it’s good to have these features at your disposal.

You would only pay for the fees upon additional request from time to time. You can read more about them here.

Most of these fees have to do with abandoned accounts and the reclamation of assets by the state. As long as you can check up on your portfolio once every 90 days, you should be able to avoid these inactivity charges.

Additional Features of M1 Finance

M1 Finance has taken the step forward to being a one-stop shop for anything that has to do with money management. Their added features make M1 Finance unique compared to other investment platforms.

Additional features of M1 Finance allow users to not only invest and trade in stocks but also have other options on how to grow their money.

M1 Finance offers many additional features that would allow you to do so much more than investing money into an application. Let’s look at some of the most significant features that help M1 Finance stand out amongst the competition:

• M1 Spend
• M1 Borrow
• Trade Windows
• M1 Plus

M1 Spend

M1 Spend is a personalized checking account created under your name upon request, and it comes with a debit card that you can use for daily transactions. It also allows you to use this checking account as a salary account. Besides that, you can direct your paycheck to the checking account through a routing number and an account number.

M1 Spend is optional and free to use. This is quite an attractive feature since you can manage all your personal finances from one place.

M1 Borrow

M1 Borrow, on the other hand, is a dedicated line of credit that allows a user with an investment of over $5,000 to borrow a certain amount as credit. It is a loan where the investments in your taxable portfolio are the collateral. For $5,000, you can borrow up to $3,500 with M1 Borrow.

The credit provided through M1 Borrow is subject to an interest rate usually lower than the market interest rate and provides you with more flexibility. It is also very convenient and less hassle for creditors who want to borrow money.

You can use the borrowed funds for reinvestment purposes in M1 Finance or transfer them to an external bank account for more personal uses. The software also helps you keep track of the accumulated interest over the amount you have borrowed. Not only that, the app keeps track of your credit score as well.

If the score falls below a specific limit, then M1 Finance can liquidate some of your assets to make up for the borrowed amount lost. But that is set in place to avoid fraudulent activities, and you will be constantly reminded of the required credit score to stay in the green. Thus, you will be able to manage your loan and keep a good record with them.

Trade Windows

Now, you want to know the secret behind M1 Finance being able to continue operations with almost zero fees? M1 Finance will allow you to trade on designated time slots. This allows all the trades to occur at the same time, minimizing maintenance costs and transaction management.

M1 Finance has its trading window at 9:30 am EST (Eastern Standard Time) when the stock market is open. It runs all trades that are completed before that time simultaneously. Here are the exact stock market hours and days the stock market is closed outlined for you.

M1 Plus

M1 Finance also provides its users an upgrade to premium membership with more perks. M1 Plus is the premium version of M1 Spend. Although, the app is entirely usable without signing up for the M1 Plus membership.

There are plenty of perks that come with M1 Plus, especially if you have an advanced investment strategy.

With an annual subscription of $125, you can get yourself registered to M1 Plus, which brings you an extra trade window along with the usual daily window. This is very beneficial for people who are looking for more short-term investments.

Also, with M1 Plus, you can get extra perks on all three features of M1 Finance.

• You get 1% interest on your M1 Spend checking account per year.
• You would be entitled to 1% cashback on all your transactions using your M1 Spend debit card.
• You will receive reimbursem*nt of foreign transaction fees and four monthly ATM fees.
• And a 1.5% reduction in the interest rate on M1 Borrow with the membership to just 2%.

If you plan to take this investment plan for the long run, this membership could be worth considering.

Is M1 Finance For Me?

With almost no fees and an easy-to-use interface, M1 Finance might be the best choice if you are someone who is just starting their investing career. This is an attractive strategy for new investors since you can invest for as little as $100. Setting up an account in M1 Finance is a very simple and straightforward process, and it comes with a very low initial capital investment.

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M1 Finance is suitable for investors who prefer their finances managed by a robo-advisor and want to have a more personal touch over their portfolios. In M1 Finance, you are ready to invest in no time with their easy portfolio allocations. M1 Finance also offers a high level of control over your portfolio.

As you can start your investments with little to no money, M1 Finance allows you to test the waters before you jump in headfirst. This gives you time to study and familiarize yourself with the platform.

Pros & Cons Of M1 Finance

Listed below are the pros and cons of M1 Finance.

Pros of M1 Finance

• Free to use
• Easy-to-understand interface
• Predesigned pies for beginners
• Perfect application for those who are just starting on stocks and ETFs trading
• You can buy partial shares
• Auto-invest features
• Automated rebalancing
• You have complete control over your investments
• You can get a $10 bonus upon signing up using a referral link

Cons of M1 Finance

• Focused mostly on passive and long-term investing
• Not suitable for active day-to-day traders
• One trading moment per day

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How To Create An Account With M1 Finance?

Getting started with M1 Finance is relatively simple. All you have to do is download the application, set up an account, design a portfolio, and start investing. The application is available for both iOS and Android. It is very easy to navigate, so creating your account is not that challenging.

The app guides you through the entire process and helps you better understand what you are getting yourself into. The M1 Finance platform is very straightforward so creating an account is very simple. Listed below are the steps to follow.

The process is not that complicated and just involves the following steps:

• Sign up for the application
• Build a portfolio
• Create brokerage account
• Start investing

All the steps involved in setting up an account are very self-explanatory.

The only thing you need to look out for is the portfolio-building part, as this is where M1 Finance introduces a unique feature of building your investment pie.

Your pie will represent your entire investment portfolio, whereas the slices represent individual stocks or ETF funds. If you are not sure what stocks or funds you want to invest in, M1 Finance also provides you with predesigned pie portfolios.

Once your portfolio is created, all that is left to do is fund your account, sit back, relax, and let the application do its thing.

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M1 Finance Bonus Offers

M1 Finance currently has two bonus offers:

The first bonus is where you get $30 when you sign up for M1 Finance with our link and deposit $1,000

Get $30 When You Invest $1,000

Another promotion is to transfer your account over when opening your M1 Finance account and earn up to $4,000

• Transfer $10,000 to $19,999 – $40 Bonus
• Transfer $20,000 to $49,999 – $75 Bonus
• Transfer $49,999 to $99,999 – $150 Bonus
• Transfer $100,000 to $249,999 – $250 Bonus
• Transfer $250,000 to $499,999 – $500 Bonus
• Transfer $500,000 to $999,999 – $1,000 Bonus
• Transfer $1,000,000 to $1,999,999 – $2,500 Bonus
• Transfer over $2,000,000 – $4,000 Bonus

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M1 Finance Alternatives

M1 Finance may have a lot going on for it, but there are alternatives to M1 Finance if you want to try something new. We just want you to get the most out of your investments.

To do that, let us look at some alternatives to M1 Finance that might suit your taste of investing better.

Betterment

Considered to be the best robo-advisor in the business, Betterment is a lot better for people who just want to invest in a variety of ETFs. Betterment does offer a lot of diversification when it comes to investment portfolios.

They also offer socially responsible investing, which excludes companies in industries like oil and tobacco. If you want to focus on the social and environmental impact of investing, they offer Climate or Social Impact portfolios.

Robinhood

Robinhood is one of the most established investment platforms in the business.

It rewards people for holding their investments for an extended period and enables them to partake in day trading with no trade windows. So, if the trade constraints of M1 Finance sound like a hassle to you, Robinhood just might be what you are looking for.

Robinhood is also very user-friendly and appeals to the younger audience with a game-esque feel to it. It has paved the path for many millennials to become investing professionals.

Webull

Webull has recently become more popular due to its ability to trade in cryptocurrencies. A lot of people now are into crypto trading, and Webull provides this opportunity for people.

Webull is a money management application that is marketed mainly towards millennials. Webull introduced crypto trading to the investment application platform and gave one-point access to every possible investment opportunity you can find.

This made Webull such a success as many young investors have recently transitioned towards crypto trading, moving away from traditional trading instruments.

Is M1 Finance Safe?

M1 Finance is one of the most reputable Fintech companies currently in the industry and is known for its data security. To the extent that Forbes considers it to be the best investment app for data security. This is one important factor to consider, especially when putting your money into the platform.

M1 Finance comes under the jurisdiction of SIPC Insurance (Securities Investor Protection Corporation), which is one of the biggest insurance names in the country.

Besides your usual two-factor authentication, M1 Finance has also incorporated 4096-bit encryption for data transfer and information storage. This allows your data and transactions to be as secure as possible when it comes to online trading. Trusting the platform is important as you are investing your money in it.

Thus, user confidence is a big factor, as good reviews in platform security mean more users will register and enroll in the platform. M1 Finances takes this very seriously, so the platform is safe.

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Is M1 Finance Worth It?

M1 Finance has something for everyone. However, according to the CEO, the application is catered to attract mostly a younger generation of investors. The app has a lot to offer for both new and experienced investors.

Unlike other investment platforms, M1 Finance lets you create an account for free. Select one of the predefined pies, and you can start investing by just funding your portfolio.

If you are an experienced investor, then M1 Finance provides you with freedom of customization. You can design your portfolios and invest in the stocks that you want. You can put your knowledge to use quite effectively with M1 Finance.

So, the final verdict is that although M1 Finance only provides one trade moment a day, it quite easily makes up for it with free trading, automatic investing, and hands-free rebalancing. Also, its automated account features suit passive investors as well as active traders. M1 Finance allows you to invest in an easier and cheaper way.

So we believe that M1 Finance is entirely worth investing your time and effort in and can help you start up your investing career.

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Summary – M1 Finance Review

To sum it all up, let us take one final look at M1 Finance.

Overall, we can assure you that M1 Finance is one of the best money management applications currently available to use, and it provides you with low fees.

Sign up for M1 Finance now and start your investment journey!

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