M1 Finance Review: free and easy to use
Updated: Apr 24
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Are you considering M1 Finance as your go-to investment platform but unsure about its features and benefits? In this comprehensive M1 Finance review, we'll delve into its user-friendly interface, diverse investment options, and customizable portfolios.
Plus, we'll explore the pros and cons to help you determine if it's the right fit for your financial needs. We'll also reveal how you can take advantage of the limited-time M1 Finance Bonus to enhance your investing journey. So, let's dive in and discover how M1 Finance can revolutionize your personal finance experience.
If you find this review helpful and want to start an account, you can find the M1 Finance Login here.
How does M1 Finance Score:
Cost and Fees: 10 out of 10
Ease of Use: 9 out of 10
Features and Tools: 9 out of 10
Overall: 9 out of 10
What is M1 Finance?
M1 Finance is an innovative investing and portfolio management platform offering a wide array of investment options, including stocks, mutual funds, and expert-curated "pies." With diverse filters, M1 Finance empowers investors to tailor their portfolios according to their preferences, such as industry focus, women-led or AAPI-led companies, and more.
This flexibility allows users to invest in causes they're passionate about or simply those that offer the best potential returns.
How does M1 Finance work?
M1 Finance operates similarly to other well-known investment platforms like Fidelity, E*Trade, or Robinhood. However, M1 Finance distinguishes itself from competitors by offering a comprehensive suite of financial tools and research resources beyond investing. Continue reading for our in-depth "features" section, where we discuss each of these unique tools.
How can M1 Finance help you?
M1 Finance is a versatile platform catering to both beginners and experienced investors. If you're seeking an all-in-one solution for investing, saving, and checking, M1 Finance has got you covered. With its user-friendly interface and valuable data insights, M1 Finance streamlines the investment process.
The platform also provides extensive educational resources to help users better understand their investments. Alternatively, if you prefer a hands-off approach, you can set up a recurring investment plan and let your portfolio run on autopilot. Overall, M1 Finance is among the top personal finance tools available in today's market.
M1 Finance Features
M1 provides a plethora of features for investors, including:
As you would expect, this feature allows you to invest your money. M1 makes this really easy when you first log into their system and set up an account. They take you step by step through individual stocks you can buy, then mutual funds or you can dive into their "Pies" option as well. All provide you with easy-to-understand information about what you are investing in. Take a look:
A custodial account is an account you set up for your kids. It is managed in just the same way as a regular investment account just under your child's name. Once your dependent reaches the legally defined age their investment account will be transferred to them and M1 will restrict you from trading.
At this point, your dependent can either withdrawal funds or transfer them to their own investment account.
Trust accounts are another great investment option on M1 Finance. You are required to have a $5,000 minimum to set up an account. These are required to be US domestic trusts in good legal standing, but for many investors, that shouldn't be an issue.
This is a sub-feature of Investing where you have the ability to invest in something like Black-run businesses, or Warren Buffet's portfolio, or environmentally friendly businesses. Basically, it is how your pie is sliced, but M1 does it in advance and gives you a ton of options based on what you prefer to invest in.
M1 offers you the option to set up a "Spend"/checking account. You get 1% cashback and 1% APY, which is a big deal if you are planning to keep your account long-term. The important part of the 1%/1% is that you have to open an M1 Plus account, more on that below.
Borrowing money from an investment account isn't the best use of saved funds over a long time horizon. Depending on your situation it might make sense to borrow from an investment account. If you are saving up to buy a home and want to make some interest on your savings as you are doing so, then go ahead and borrow from this account, especially if that was the intent all along. If you are borrowing due to financial hardship, then again, this makes sense, and borrow to ensure you can eat and have a roof over your head.
On the other hand, if you are borrowing to pay for a vacation or some other non-essential expense then you should think twice about how you are saving for those. I would suggest a CD because you don't have to pay that back when you cash it out.
Lastly, the Borrow feature is truly nice to have as an additional liquidity tool. Like I mentioned above it's not a great idea to pull money from an investment account, but the ability to do so, vs other accounts that are harder to pull funds from, creates a nice safety net should you need one (and in these modern times, who doesn't need one, am I right!?!).
M1 Plus is free for the first year and $125/year after that. You will want to ensure you are making the most of that $125/year to make it worth the cost. The way I justify the annual cost is using the card for purchases + my account balance at/above $12,500 (because 1% of $12,500 is $125).
Pros and Cons
M1 Finance is a popular investment platform that offers a wide range of features for investors. To help you make an informed decision about whether it's the right choice for you, we've compiled a list of pros and cons.
Pros of M1 Finance:
User-friendly interface: M1 Finance boasts an intuitive and easy-to-navigate platform, making it suitable for both beginner and experienced investors.
Customizable portfolios: M1 Finance allows users to create personalized portfolios or choose from expert-curated "pies" based on their investment preferences, such as industry focus or specific causes.
Diverse investment options: With M1 Finance, users can invest in stocks, mutual funds, ETFs, and more, providing a wide range of choices to suit different investment strategies.
Fractional shares: M1 Finance offers fractional shares, enabling users to invest in expensive stocks with a smaller amount of capital.
No commission fees: Users can trade stocks and ETFs without incurring commission fees, making M1 Finance an affordable option for those looking to minimize investment costs.
Rebalancing: M1 Finance automatically rebalances your portfolio to maintain your target asset allocations, ensuring your investments stay on track.
Educational resources: The platform provides a wealth of educational materials and research tools to help investors make informed decisions.
Cons of M1 Finance:
Limited trading window: M1 Finance offers only one or two trading windows per day, which may not be ideal for active traders who require more flexibility.
No options or margin trading: M1 Finance does not support options or margin trading, which may limit the strategies available to more advanced investors.
Limited customer support: M1 Finance's customer support is primarily available through email, which may not be sufficient for users who require immediate assistance.
Minimum account balance: To use M1 Finance's investing features, users must maintain a minimum account balance of $100 ($500 for retirement accounts).
No mutual funds: Although M1 Finance supports stocks and ETFs, the platform does not offer mutual funds, which may be a drawback for some investors.
In summary, M1 Finance is an excellent choice for investors seeking a user-friendly platform with diverse investment options and customizable portfolios. However, it may not be the best fit for active traders or those seeking more advanced trading features like options or margin trading.
How to get started with M1 Finance
Getting started with M1 Finance is straightforward, just like any other investment account. Set up your username and password, provide some basic information, and M1 Finance will guide you through the rest of the process.
Once the initial setup is complete, you can move on to creating your first portfolio or "pie."
Who can benefit from using M1 Finance?
M1 Finance is suitable for anyone planning to invest for a long time horizon, utilizing a buy-and-hold strategy. The platform is designed for both novice and seasoned investors, providing all the necessary tools for success.
The auto-investing tools you can set up, similar to automatically investing in your company 401k, are great. M1 will pull money from your bank account at a date and time you determine and automatically invest that money as you see fit. One of the easiest ways to build wealth over time is to set up automatic investing like this. However, you should ensure you are maximizing your employer 401k before setting up an investment account.
One key consideration for M1 is whether or not you want financial advice. There are great research tools available within the platform, but they don't offer human advisors (check out Sigfig if you want unlimited access to human advisors).
M1 Finance Bonus
For a limited time M1 Finance is offering a bonus deposit of up to $500 into your account,