M1 Finance Simple, Easy Investing for Everyone

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M1 Finance Review

This site contains affiliate links to products. We may receive a commission for purchases made through these links.

M1 Finance had me intrigued from the very first time I heard about it. From afar it doesn’t seem that different from a typical investing platform but it really is so much more. M1 Finance allows you to choose from any publicly traded company or ETF (Exchange Traded Fund) to build your custom portfolio. If you don’t want to choose your own blend then M1 Finance offers professionally designed “Expert Pies” to meet different goals. Now layer in some automation, fractional share investing and a great interface all for free, and you have a force to be reckoned with!

Supported accounts:

  • Individual
    • Set up an individual taxable account for your general investing needs.
  • Joint
    • Establish a joint account with a relative, spouse, or domestic partner.
  • Retirement
    • Invest in your future with Traditional, Roth, and SEP IRAs.
  • Trust
    • Set up an account on behalf of an individual or group.

M1 Banner

What makes M1 Finance special?

1. Invest for free!

M1 does not charge any platform fees or commissions on any trades. If I was to end the review here, this would be enough to put M1 Finance in a class with only a handful of investment account options.

2. Fractional Shares – Put every penny to work!

What are fractional shares you ask? It is the ability for you to use your $100 to purchase 0.25 shares of that fancy stock that is currently trading at $400 per share! This is a game changer!

M1 Finance allows investors to build a high-quality diversified portfolio with as little as $100. Traditionally, without significant funds, a new investor would be forced to choose between diversification and the quality of their portfolio. However, with the introduction of fractional shares, you no longer have cash sitting idle as you save enough to buy a share of your favorite stock. As soon as you find the company or fund you would like to invest in, you can deploy your idle cash.

M1 Expert Pies

3. Expert Pies – Proven methodologies used by professionals!

This is definitely not unique to M1 but still worth mentioning because it can be extremely helpful for new investors to see how the professionals view diversified portfolios. M1 Finance has a number of “Pies” that are designed for different stages of an investing lifetime.

4. Automation is key!

Set it and forget it or constantly recalibrate, the choice is yours! M1 allows you to set your desired asset allocation for your Pie by the individual slice. It then keeps within that allocation through investing more in slices that go below the desired allocation and invests less in the slices that go above. All you need to do is fund the Pie and M1 Robo Advisor will take care of the rest. M1 intelligently allocates money from every deposit to ensure your portfolio stays on track.

M1 Discover Stocks

So, how does it work?

  1. Open your account.
  2. Research the companies and/or funds that you would like to invest in.
  3. Select your favorites to add into your pie (up to 500 individual securities). Each will be represented as an individual slice of the total pie.
  4. Add the percentages that you would like to designate to each slice.
  5. Select your investment account type (individual or joint brokerage account or IRA)
  6. Verify your identity. (Patriot Act)
  7. Link your bank account.
  8. Deposit funds to the pie.
  9. M1 will take care of the rest by automatically funding each slice to meet the allocation that you indicated in Step 3.
  10. Optional: setup recurring deposits and automatic investments to take the future work off of your plate
  11. Monitor the pie to see how individual slices are performing.
  12. As you add additional funds to your portfolio, the money will automatically invest into each slice bringing each back to your designated asset allocation indicated in Step 3.

Ok, tell me why M1 Finance isn’t for me.

We certainly had a good run with all the great functionality this platform offers, but let’s talk about some of M1’s shortcomings.

No Tax Loss Harvesting

This certainly is not a deal breaker for many but it is definitely worth discussing here since it can have a significant impact on some investors. Many Robo Advisors have this feature built-in which will automatically sell the share lots that have a loss and replace them by purchasing similar investments. M1 does not. So, if you need it, then this platform is not for you.

No Mutual Funds

M1 has every publicly traded stock and ETF but they do not offer any Mutual Fund investing at this time. If this is what you are looking for, then this platform is not for you.

Once per day trading window

This is really not an issue for anyone other than the day traders. If you were thinking of becoming one, then this platform is not for you.

M1 Finance Review

Who is M1 Finance best suited for?

  1. New investors
  2. Passive investors
  3. Set it and forget it investors
  4. Individual stock investors
  5. ETF investors
  6. Everyone, except for advanced investors and day-traders

Sign up with M1 Finance today!

How do I use M1 Finance?

We currently use our M1 Finance account for about 5% of our traditional brokerage investing with the other 95% being in our Vanguard account. My Custom Pie consists of:

M1 Custom Pie

  • 35% Domestic – VTI
  • 25% International – VEU
  • 15% Real Estate – VNQ + VNQI
  • 15% Commodities – VAW
  • 10% Bonds – BND

Summary:

M1 Finance is a free platform with a lot of unique features. It gives you as much or as little control as you desire. Custom and Expert investing strategies. Beautiful interface. Oh, and did I mention that it’s free?

Definitely worth a try!

Click here to sign up today.

-D-

M1 Finance Product Review

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