M1 Finance is a financial app that provides a simple way to invest, borrow and spend without having to worry about managing your investments. The company’s products are designed around three main pillars: investing, borrowing, and spending. These three pillars work together to create a complete financial ecosystem for you.
What is M1 Finance?
M1 Finance is a digital asset management company that offers a suite of financial services, including online banking, mobile banking, and wealth management. The company was founded in 2013 by former Goldman Sachs executives and has raised $100 million to date. They currently operate in the United States, Canada, and the UK.
M1 Finance caters primarily to high-net-worth individuals and small businesses. Their target demographic includes people who want to invest but don’t have time to manage their money themselves. M1 Finance is also perfect for millennials who have accumulated significant wealth but don’t have enough cash in savings to cover unexpected expenses. Those who need to earn extra income while saving for retirement may also find it ideal.
How Does M1 Finance Compare to Other Similar Services?
M1 Finance is similar to other digital asset management companies such as Wealthfront and Betterment. However, they differ in two key ways. First, they don’t charge any commission fees. Second, they focus on providing a comprehensive solution rather than just offering an investment service.
M1 Finance also uses a unique approach to investing. Instead of focusing solely on the performance of individual stocks, they invest in a basket of assets. By doing so, they ensure that the returns generated by each investment are consistent across all of the baskets. In addition, they manage these baskets for you, allowing you to focus on building your business instead of worrying about day-to-day.
Why Should You Invest with M1 Finance?
M1 Finance offers a variety of benefits, including:
- No Transaction Fees: Pay no transaction fees on deposits and withdrawals.
- Comprehensive Solution: Get a complete suite of services, including investing, borrowing, and spending.
- Low Cost: No fees on investments or no minimum deposit requirements.
- Accessible Platform: M1 Finance works seamlessly on desktop computers, smartphones, tablets, and even Amazon Alexa.
- Mobile App: Download the mobile app available on iOS and Android platforms.
- Personalized Service: Get tailored offerings to meet your specific needs.
- Easy Setup: A simple process of setting up accounts, making it easier for you to sign up as a new user.
How Does Investing Work with M1 Finance?
When you first open an account with M1 Finance, you’ll be presented with a list of pre-selected portfolios. These include three types of equity portfolios: Growth, Income, and Balanced. Each type of portfolio contains several subcategories, which allow you to tailor your portfolio to your preferences. They have also recently added cryptocurrencies to their portfolio.
For example, if you want to invest in growth stocks, you can do so by selecting “Growth Equity.” On the other hand, if you prefer to invest in value stocks, you can do this by choosing “Value Equity.”
In addition, you can create custom portfolios by clicking the “Custom Portfolio Builder” link at the bottom of the screen. Here, you can build a portfolio based on your risk tolerance and time horizon.
What are M1 Finance’s Commissions and Fees?
M1 Finance does not charge any portfolio management or trade fees. This is a very unique aspect of the platform, which puts more dollars to work for your benefit. Rather, M1 earns money through interest, lending shares, the Plus membership, payments for order flow, and transaction costs. ETFs purchased through M1 have their own fee that goes directly to the fund manager. Standard industry practice is for fund managers to receive compensation based on the amount of assets under management. M1 charges a $125 annual subscription to access the platform’s services. There is also a monthly miscellaneous fee schedule for various account functions. Overall, the low price of the platform is an appealing feature for investors. If you’re planning to close an account, there are additional charges of $100 plus a $20 charge if the account hasn’t been used for at least 90 days.
Is M1 Finance Right for You?
As mentioned above, M1 Finance offers a wide range of investment options. The platform allows users to customize portfolios based on their risk tolerance and time horizon, with no minimum balance requirement. In addition, M1 Finance offers free trades and rebalancing.
However, M1 Finance isn’t suitable for everyone. If you plan to use the platform primarily for short-term investing, then it may not be ideal for you. Also, if you don’t like dealing with high-frequency traders, then M1 Finance might not be suitable for you.
Overall, M1 Finance is a great option for those who want to diversify their holdings without having to worry about managing their accounts.
How To Get Started with M1 Finance
To start with M1 Finance, visit their website to open an account:
- Enter your email address, choose a username, and provide basic personal information.
- Verify your identity via a phone call or text message, and complete the rest of the registration process.
- Get a welcome email from M1 Finance with instructions on accessing your account.
Once you have access to your account, make deposits using the available methods: debit card, credit card, wire transfer, or ACH (automated clearing house) transfer, and start investing with M1 Finance.