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Investing Made Easy: An Inside Look at M1 Finance’s Features

M1 Finance: Investing, Borrowing, and Spending

Investing is an integral part of financial management. With the emergence of more FinTech startups, the financial landscape has been transformed.

With this transformation came digital platforms that allow people to invest in a simple and intuitive way. One such platform is M1 Finance.

It is a commission-free, self-directed brokerage that provides users with customizable portfolios, automated investing, and an app-based platform. M1 Finance is an innovative platform that seeks to promote responsible investing.

Its investment offerings are diverse, ranging from expert-curated pies to community pies that cater to specific interests such as female executives or environmentally friendly trading. Additionally, it provides retirement planning options that ensure users have a solid financial foundation.

This article aims to unpack the functionalities of M1 Finance, its various features, as well as the overarching benefits of this platform.

Platform Features

M1 Finance is a commission-free and self-directed brokerage that allows users to invest in their preferred stocks and ETFs. Users can also align their investments with their interests by customizing their portfolios according to their goals. This means that users have the flexibility to invest in stocks and ETFs they wish to, as well as create and automate their investment strategies.

M1 Invest

M1 Finance’s primary investment offering is

M1 Invest. This feature focuses on portfolio construction, with the platform using a unique pie chart to help users visually construct their portfolios.

The intuitive design allows users to choose the percentage of their investments they want to allocate to different stocks and ETFs.

M1 Invest provides expert-curated pies created by financial professionals experienced in the stock market. These pies can be tailor-made to fit the user’s investment goals.

Alternatively, users can opt for community pies that reflect the thematic interests of the user. These are pre-made pies that mirror specific investment interests.

For instance, there is a community pie that caters to female executives, highlighting companies that champion and promote gender diversity. Another feature of

M1 Invest is responsible investing.

It promotes themes such as environmentally friendly or sustainable investment. It offers a platform that caters to traders looking to invest in companies that have a positive social impact.

M1 Invest also offers retirement planning options. M1 offers a range of retirement pies that invest in ETFs that track the performance of specific indexes.

Additionally, users within M1 Finance can use the platform to roll over their 401(k)s or IRAs to the platform, ensuring a secure financial foundation.

M1 Borrow

M1 Finance offers a low-rate margin loan feature known as

M1 Borrow. Margin loans allow borrowers to invest more than their account value.

With

M1 Borrow, users can borrow up to 40% of their total value held on the platform. The platform does not have an application process, does not conduct credit checks, nor have pre-set repayment schedules.

Users can use the margin loan for any purpose like paying off debt, reinvesting in the market, or making a large purchase. However, borrowing also comes with risks that users should weigh beforehand before engaging in it.

For instance, borrowing increases the chance of loss beyond the user’s initial investment.

M1 Spend

M1 Finance also offers

M1 Spend, an interest-bearing checking account. The account is FDIC insured, earning an annual percentage yield (APY) of 1%.

Additionally, the platform provides a cash-back card connected to the account. To access this feature, users need to subscribe to the M1 Plus plan, paying an annual fee of $125.

This plan provides a range of benefits for users of the platform, including custodial accounts for their children and access to the unique M1 credit card.

Features That Stand Out

Portfolio Construction

One of the most remarkable features of

M1 Invest is the pie chart. It’s a user-friendly feature that allows users to visualize and comprehend their portfolio allocations.

The customizability allows users to allocate their investments as per their interests. Users can take advantage of expert-curated pies or harness the power of community pies.

The intuitive design attracts both novice and expert investors alike, providing a unique user experience.

M1 Borrow

The low-rate margin loan feature is a standout feature of M1 Finance. It provides access to capital without the constraints of the traditional lending process, e.g., application and credit checks restraints.

The only requirement is that the money borrowed cannot exceed the 40% value of the user’s total assets.

Fees

M1 Finance prides itself on being a low-fee platform, with no account management fees. The M1 Plus plan requires users to pay an annual fee of $125, providing a range of perks, including the unique M1 credit card and custodial accounts.

The platform even offers an interest-bearing checking account to its users, making it a low-cost, all-inclusive investment platform.

Dynamic Rebalancing

M1 Finance provides an automated hands-free process for investors. Users do not have to worry about tedious manual rebalancing.

Automated investing at specific target percentages allows users to focus on other interests, delegating the routine tasks of investing.

Conclusion

In conclusion, M1 Finance is a unique investment platform that offers users customizability, automation, and innovative features.

M1 Invest focuses on portfolio construction, with a pie chart that enables users to visually allocate their investments.

M1 Borrow allows users to access low-rate margin loans with no application processes or credit checks required. The platform also offers

M1 Spend; an interest-bearing checking account coupled with a cash-back card and other benefits through its M1 Plus plan.

In summary, M1 Finance offers a simplified and user-friendly approach to investing, with a range of features that cater to all types of investors.

Other Notable Features of M1 Finance

In addition to the primary features of M1 Finance discussed earlier, there are several other features that make this investment platform unique.

Fractional Shares

M1 Finance allows users to invest small amounts of money in the stock market through fractional shares. This feature is particularly useful for beginners who may not have the resources to buy whole shares of expensive stocks.

Fractional shares allow users to buy a portion of a share, making it more accessible to anyone that wants to invest no matter how small the investment account is.

Dividend Reinvestment

Dividend reinvestment is an automatic process that allows investors to use their cash balance to buy additional shares of a stock. M1 Finance offers this feature to its clients, giving them the opportunity to grow their portfolio without making additional investments.

The platform enables investors to earn compound returns over time, making it an effective way to grow their portfolio.

Shareable Portfolios

M1 Finance offers a referral program known as the M1 Refer-and-Earn program. Users of the platform can refer their friends and family to M1 Finance using their unique referral link.

The program offers a $30 investment credit to users who recruit and sign up new investors on the platform.

Features that M1 Finance Lacks

While M1 Finance is one of the most comprehensive investment platforms available today, it still lacks some features that might be important to certain investors. Here are three features M1 Finance currently lacks.

Traditional Tax Harvesting

M1 Finance does not offer traditional tax harvesting, which involves selling securities in a specific order to create tax losses that can offset gains. This process is useful for minimizing taxes on investment earnings.

The process involves selling securities with the highest tax burden first to offset any gains from selling securities with a lower tax burden.

Linking External Investment Accounts

M1 Finance does not allow users to link and manage external investment accounts. This might be a drawback for investors looking to manage their entire portfolio from one location, consolidating assets, streamlining portfolio management, and diversifying their total portfolio.

Financial Tools

M1 Finance lacks money management tools like those provided by Personal Capital. Personal Capital is a financial advisory service designed primarily for investors with high net worth portfolios.

It offers retirement planning, investment management, and personal finance management. These tools may be useful to investors looking to maximize their investments and increase their financial literacy.

Conclusion

M1 Finance is an innovative investment platform that provides users with a range of features and functionalities that cater to all types of investors. It’s a commission-free, self-directed brokerage that caters to novice and experienced investors alike.

The pie chart feature offers investors a unique and intuitive way to invest in the stock market, while fractional shares provide a way for beginners to invest small amounts of money. The platform’s referral program, dividend reinvestment feature, and low fees make it an ideal platform for investors looking to maximize their investments.

However, as with any platform, it does have some drawbacks, such as the lack of traditional tax harvesting and external account linking. Overall, M1 Finance provides an accessible and reliable investment platform that will likely evolve to cater to the ever-changing financial landscape.

Best for New and DIY Investors

M1 Finance is among the best investment platforms for new investors, DIY types, and socially-responsible investors. This platform is suitable for investors looking to invest in the stock market on a budget.

It provides an intuitive and sleek app design, a low initial deposit, and fractional shares, making investing more accessible for those with smaller investment accounts.

Ideal Users

M1 Finance is ideal for new investors who want to use a straightforward and user-friendly platform to jumpstart their investing goals. The platform’s low minimum initial deposit of $100 and the ability to purchase fractional shares makes it attractive to beginners who may not have much capital to start with.

In addition, the fee structure ensures that budget-conscious investors receive value for their money. The platform is also ideal for passive investors who prefer a hands-free strategy.

M1 Finance offers dynamic rebalancing, which means that investors can set the ratio of capital allocation to specific stocks. Then, the rest of the work is done for them.

M1 Finance is also appealing to socially-responsible investors who want to invest their money in companies that regularly meet or exceed Environmental, Social, and Governance (ESG) standards. The platform provides the option of investing in expert-curated pies focused on ESG investments.

It’s these types of products that attract and retain investors that have ethical motivations.

Day Traders

Day traders and active investors may find shortcomings when using M1 Finance. The platform is not designed for day trading, and the features offered are more geared towards long-term investors.

How to Apply

To start using M1 Finance, the first step is to create an account on the platform. The application process is straightforward and can be done in a few minutes.

The application process begins by downloading the M1 Finance app to your mobile device or browsing on their site. Next, click on the sign-up button and then proceed to fill in your email address and personal information.

Once the onboarding prompts appear, follow the prompts by answering the questions and verifying your identity. After setting up your account, M1 Finance provides a range of M1-supported accounts to choose from.

The account options include traditional and Roth IRAs, 529 College Savings accounts, and custodial accounts. You can then fund your account with a minimum initial deposit of $100 using bank transfer or wire transfer.

Once your account has been funded, you can begin to select your investment strategy and set up your portfolio. M1 Finance provides a range of features, including dynamic rebalancing, fractional shares, and expert-curated pies.

Investors can use the platform to automate their investments or take a hands-on approach by customizing their portfolios.

Conclusion

M1 Finance is an innovative investment platform that offers investors a unique way to invest in the stock market. With a low minimum deposit, easy-to-use app design, and a range of features, this platform is suitable for new investors and the DIY investor.

The onboarding process is straightforward, and investors can open accounts and begin investing within minutes. However, day traders, active investors, and those that require specific investment tools may find that M1 Finance falls short.

Ultimately, M1 Finance remains an accessible platform that allows investors to gain exposure to the stock market and make their money work for them.

Trustworthiness and Security

In today’s digital age, trust and security are paramount when dealing with financial investments. M1 Finance is a registered broker with the

Financial Industry Regulatory Authority (FINRA) and a member of the

Securities Investor Protection Corporation (SIPC).

It employs the latest in security measures, including military-grade encryption and two-factor authentication.

Financial Industry Regulatory Authority

M1 Finance is a registered broker with the

Financial Industry Regulatory Authority (FINRA). FINRA regulates and oversees brokerage firms operating in the US.

It protects investors from fraudulent or illicit broker activities and ensures that firms adhere to industry regulations. As a registered broker-dealer, M1 Finance complies with FINRA’s rules and regulations, ensuring that their clients can invest with peace of mind.

Securities Investor Protection Corporation

M1 Finance is also a member of the

Securities Investor Protection Corporation (SIPC). The SIPC is a non-profit corporation that insures investments in case a broker-dealer fails.

SIPC coverage provides up to $500,000 of coverage per account. It’s an extra layer of protection for investors and adds an additional level of confidence when investing with M1 Finance.

Security Measures

M1 Finance employs the latest in security measures to ensure that its clients’ investments and personal information are kept safe. The platform uses military-grade encryption to secure accounts and protect sensitive information.

Additionally, M1 Finance uses two-factor authentication to confirm the identity of users and prevent unauthorized access to accounts.

Final Take

M1 Finance is an ideal platform for investors who are in it for the long term. Its automated portfolio management and expert-curated pies offer investors an efficient way to manage their long-term investments.

With a low account minimum of $100 to start investing, M1 Finance opens up opportunities for budding investors that may worry about fees and lack of funds.

Opportunities for Enhancement

M1 Finance is continually looking for ways to improve its services. One such area that requires improvement is in spend categories.

Currently, M1 Finance does not categorized spend, and if users want this option, they must subscribe to the M1 Plus subscription program. The subscription program provides clients with an array of benefits that include spending categories, a debit card, and a lower loan rate.

In

Conclusion

M1 Finance is an ideal platform for investors who prioritize long term investing, automation, and passive investing. With strong security measures conforming to standards set by regulatory bodies like FINRA and SIPC, M1 Finance users accounts are kept safe.

Although the platform may not be suitable for day traders or investors who seek specific investment tools, its expert-curated pies, low initial investment account minimum, and security measures make it an attractive option for beginners and experienced investors alike. While there are areas that the platform needs improving, the constant improvements and updating of the website signal significant strides towards providing an exceptional and reliable platform for long-term investing.

In conclusion, M1 Finance is a reputable platform for new investors and DIY types alike. It offers fractions shares and expert-curated pies to make investing more accessible for those with smaller investment accounts.

Additionally, the platform’s dynamic rebalancing, low fees, and strong security measures make it an excellent choice for long-term investors. While it may not be suitable for day

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