Beginner’s Guide To Using M1 Finance!
Financial Investor is affiliated with M1 Finance, but the relationship does not influence our opinion of this platform.
M1 Finance went free over a year ago on 13 December 2017, and was one of the first brokerage accounts that let you automate your investments for free using partial shares. M1 Finance offered flexibility in how investors were able to invest. Inside M1 Finance you can choose from thousands of Stocks and ETFs that fit your investment plan. The best thing? It’s FREE with $0 Commissions on Stocks and ETFs and you can open up your very own retirement account!
The Basics Of M1 Finance!
M1 Finance refers to your portfolio as a Pie. You can build your pie using a selection of Stocks, ETFs or a combination of the two it is 100% up to you. Once you’ve designed your pie, you can fund your account and begin investing in the stocks and ETF’s you have selected.
Unlike traditional brokerage accounts, within M1 Finance it takes your minimum deposit and always has it invested and working for you. When you want to re balance your pie or make a withdraw, M1 Finance will sell off equal portions of your portfolio in order to remain balanced.
Below, we cover more about what happens when you buy, sell, or adjust your pie.
Many new investors struggle with being too busy to manage their investment portfolio. M1 Finance was designed to make your life easier by making investing free and automated. M1 let’s you set your investments and forget about them, knowing that your cash, and dividends are 100% invested into your portfolio. This allows you to to go about your busy life free of having to constantly check on your investments.
M1 Finance Offers A Variety Of Benefits:
- M1 Finance is completely free: $0 Trades, 0 Fee’s, I’ve made hundreds of buys during 2018, and will continue to do so into the future, Watch The Video Here.
- Fractional Shares: With M1 Finance I can start with $100 in a Taxable Account or $500 in a Retirement Account and be able to be truly diversified by allowing you to buy 1/10,000th of a share of ANY company.
- Scheduled Investments: M1 Finance can be setup to automatically withdraw from your bank and allow your funds to be invested without any manual input, Watch The Video Here.
- Re-balance: Should you choose to, M1 Finance automatically re balances your portfolio by investing the excess amount of equity % into the set target %’s so all your positions stay equally balanced.
Opening An M1 Finance Account:
Step 1 Building Your Portfolio: You’ll be guided to build your portfolio or Pie. You can choose to create your own custom pie from a selection of Stocks and ETFs on M1 Finance. You can also choose from the selection of expert pies that were designed by M1 Finance. Your pie must contain at least 1 Stock or ETF equaling a total of 100%.
Step 2 Create Brokerage Account: Here you’ll be able to choose an account type, I highly suggest all investors start a Roth IRA, but the choice is yours. During this process you will be able to decide which type of account your going to open up, (Individual Investing, Joint Investing, Retirement, Other Account Types).
Step 3 Fund Your Portfolio: After you have selected your M1 Finance account, you will enter your personal information, and will be required to make a minimum deposit of $100 taxable account or $500 for retirement account.
If your new to investing or M1 Finance, you may want to consider averaging into your account weekly, this is called dollar cost averaging. By doing this, you reduce your risk in an elevated market, but it can also reduce the reward of an exceptional market.
In the video below I added $5,500 in Jan 2018 to the Roth IRA, guess what happened in February of 2018? The market corrected by 10%, but had this been 2017 where the market gained 17%+, dollar cost averaging would of been a disadvantage.
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I am not a Financial Adviser or Tax Professional the information provided is my opinion for entertainment and fun. This is just me a Financial Investor trying to help others make their money work for them.