馃攳
M1 FINANCE REVIEW 馃搱 My Favorite Investing Platform! - YouTube
Channel: unknown
[0]
so in this video here we're going to be
[1]
doing a comprehensive review of the
[3]
investing app or investing platform
[6]
known as m1 finance it is by far the
[8]
most requested platform I've had in
[10]
terms of people looking for me to review
[13]
an investing platform and talk about the
[15]
pros and the cons and whether or not I
[17]
think this is a good platform and the
[19]
reason for that is because this platform
[21]
is extremely disruptive in my opinion as
[24]
far as the services and features they
[26]
are offering and the good thing is as
[28]
these other investing accounts out there
[31]
are looking to compete with each other
[32]
the offerings for the end-user the
[34]
individual retail investor like yourself
[37]
are going to get better and better and
[39]
in my opinion looking at the different
[41]
investing accounts out there m1 finance
[44]
has the best package to offer in terms
[46]
of what they're offering the investor
[48]
and so that's what we're gonna get into
[50]
in this video explain what I like about
[52]
m1 finance who I recommend it to and
[54]
maybe who it's not so much for and just
[58]
kind of get into more of an in-depth
[59]
dive here on the m1 finance investing
[62]
platform now if you are interested in
[64]
opening up an account with m1 finance I
[66]
do have a link down in the description
[67]
below it is an affiliate link and you do
[70]
not have to use it but if you do
[72]
understand that it helps to support my
[74]
channel here or help support my work and
[75]
allows me to make more videos like this
[78]
so if you are interested in using that
[79]
link it's down in the description below
[81]
but you do not have to use it so moving
[84]
on here what I'm gonna do is as always
[85]
break this review up into a couple of
[87]
different sections so if you're looking
[88]
to skip ahead and check out one section
[91]
only of this review there's gonna be a
[93]
pinned comment with all those timestamps
[95]
below but first of all let's go ahead
[97]
and talk about what is m1 finance m1
[100]
finance is a hybrid platform it's a
[102]
blend between a traditional stock broker
[105]
as well as a Robo advisor with the
[107]
automated investing so really m1 finance
[110]
covers two different categories here
[112]
it's similar to these Robo advisors
[115]
where they have plans that you can
[116]
invest in where you say okay I want to
[119]
invest in a growth portfolio and they
[121]
have pre-built plans or pies you can
[123]
invest in or if you want to be more
[126]
active and you want to pick stocks you
[127]
want to invest in you can say okay I'm
[130]
gonna set up my portfolio I'm going to
[132]
set up my
[133]
or my percentages and I'm going to
[135]
continue to allocate more money into
[137]
this investment plan so the way m1
[140]
finance would work is you're gonna pick
[141]
the stocks or ETFs you want in your
[144]
portfolio you're gonna set up your
[146]
allocation in terms of your percentages
[148]
and then you're gonna continue to add
[150]
more money into that account so let's go
[152]
ahead and go over an example of this
[153]
let's say you wanted to build a
[154]
portfolio where 20% of your money was
[156]
going in the Tesla stock ten percent was
[159]
going into Apple ten percent was going
[161]
into Walmart and the other 50 percent
[162]
was going into the Vanguard 500 ETF well
[166]
traditionally you would run into a
[167]
problem here that's the fact that all of
[169]
these stocks are going to be trading at
[171]
a drastically different share price and
[173]
in order to get that correct balance
[174]
there of your portfolio and having those
[177]
numbers where they should be you're
[178]
gonna have to have a lot of money to
[180]
make sure that exactly twenty percent of
[182]
your money is in Tesla or 50 percent is
[184]
in that Vanguard 500 ETF well that is
[187]
essentially the niche that m1 finance
[190]
has fallen into they're allowing you to
[192]
buy fractional shares up to 110
[194]
thousandth of a share of each of these
[196]
stocks that way you can have a well
[198]
balanced portfolio from the get-go think
[201]
about some of these stocks out there
[202]
like Amazon for example or Google that
[204]
trade over $1,000 per share if you
[207]
wanted to have a 10% stake in a stock
[210]
like Google you would need to have well
[212]
over ten or fifteen thousand dollars in
[214]
that portfolio because of the fact that
[216]
that share price is so high but with m1
[219]
finance you can buy a fractional share
[221]
of Google or a fractional share of
[223]
Amazon and get that correct allocation
[226]
you are looking for with a much lower
[228]
barrier to entry in terms of the amount
[230]
in your entire stock portfolio so that
[232]
is essentially the process here you
[234]
either start with a prebuilt m1 finance
[236]
portfolio or you build your own
[238]
portfolio you can start with a very
[240]
small amount of money because they allow
[242]
you to use fractional shares and then as
[244]
you add money they are going to be
[246]
automatically buying low so let's say
[248]
for example in your portfolio your Tesla
[251]
stock is going through the roof and all
[252]
of a sudden you're overweight and Tesla
[254]
well when you add more money to that
[256]
portfolio you're not going to be buying
[258]
more Tesla stock they're gonna be buying
[260]
more Apple stock or buying more Walmart
[262]
or whatever it is that you are low in at
[264]
that point in time
[265]
now that exact same thing is true when
[267]
selling when you are selling from that
[269]
account they're gonna sell what you're
[271]
overweight and not underweight in and
[273]
we're gonna also talk about this later
[275]
on they're also going to sell what is
[276]
going to be the most tax-efficient based
[279]
on the investments that you are holding
[281]
so moving on here what are the actual
[283]
investments that you can buy with the m1
[285]
finance app well you can buy over 6,000
[288]
listed securities that are both traded
[290]
on the Nasdaq the New York Stock
[292]
Exchange and then the B 80s exchange and
[294]
the B 80s is just a global Stock
[297]
Exchange so there are over 6,000
[299]
publicly traded investments that you can
[302]
invest in through the m1 finance app
[304]
this also includes ETFs and there are
[307]
almost 2,000 ETFs or exchange-traded
[310]
funds that you can invest in through m1
[312]
finance so what that means of course is
[314]
there are no penny stocks on m1 financed
[317]
and there are no mutual funds so if you
[319]
were looking to pick a penny stock out
[321]
there that trades on an over-the-counter
[322]
exchange and you wanted to allocate
[325]
money into that through the m1 finance
[327]
app you would not be able to do that the
[329]
same thing is true with the mutual funds
[331]
you cannot be allocating money into
[334]
mutual funds through the m1 finance app
[336]
but if you are using m1 financed my
[338]
guess is you're not a fan of mutual
[340]
funds anyway you want to be a DIY or
[343]
active investor and you don't want to be
[345]
paying someone to manage your money so I
[347]
don't think many people would be
[348]
honestly interested in buying mutual
[350]
funds through m1 finance and then like I
[353]
said earlier you have two options when
[355]
it comes to investing in m1 finance
[356]
number one you can build your own
[358]
portfolio or PI and you can also have
[361]
multiple different PI's within your
[362]
portfolio and then option number two if
[365]
you don't want to be active with your
[366]
investments you can utilize the
[368]
pre-built PI's or portfolios that m1
[370]
finance offers completely free and the
[373]
main advantage here that we're gonna get
[375]
into is that when you're investing
[377]
traditionally with a Robo advisor if
[379]
you're investing and you are following
[381]
their plans where they're allocating
[382]
that money for you they're going to
[384]
charge an annual fee and the best part
[386]
about m1 finance is there are no fees no
[389]
fees to trade there are no annual
[392]
management fees of any kind and m1
[394]
finance says it's going to remain this
[396]
way they're gonna make money by offering
[398]
borrowing so if you want to buy on
[400]
margin
[401]
you can do that through them one finance
[402]
that's pretty much how they're making
[404]
money is kind of similar to Robin Hood
[405]
where they have the Robin Hood gold
[407]
package for certain members but that
[410]
free plan is always going to be that way
[412]
okay moving on now what are the
[413]
requirements to have an m1 Finance
[415]
account you have to be a United States
[417]
investor age 18 and up now there is no
[420]
minimum balance to open an account but
[422]
if you want to begin investing you have
[424]
to have a 100 dollar minimum balance and
[426]
if this is a retirement account you have
[428]
to have a $500 minimum balance to get
[430]
started moving on now what are the fees
[432]
associated with them on Finance there
[434]
are absolutely no fees like we said
[436]
Commission free trading there are no
[439]
fees no limits on the amount of
[440]
rebalancing you are doing with your
[442]
portfolio and there is no kind of
[444]
management fee like you would see with
[446]
wealthfront or betterment so as you guys
[448]
know we covered a full review here of
[450]
betterment I'll link it up in the
[451]
description below and m1 finance is
[454]
similar to betterment because they offer
[456]
those pre-built portfolios however m1
[459]
finance has a 0% fee they don't charge
[461]
anything for that while betterment has a
[464]
0.25 percent fee now I will say this
[467]
betterment is going to be more tailored
[469]
to your specific needs because they are
[471]
using an algorithm they're actually
[473]
asking you direct questions about your
[475]
goals your objectives your savings and
[477]
everything like that so they are going
[478]
to be more tailored to you and so for
[481]
some people that might be worth that
[482]
0.25 percent annual fee okay moving on
[486]
now what are the pros of investing in m1
[488]
finance first of all it is a 100 percent
[490]
free robo-advisor or automated investing
[493]
platform so if you're looking for an
[495]
alternative to wealth front or
[497]
betterment this might be an option you
[499]
would consider looking into second of
[501]
all you have 100% complete flexibility
[503]
with this account if you invest in
[505]
betterment or wealthfront
[507]
you don't have much flexibility in terms
[509]
of what you're actually investing in
[510]
you're solely going to be investing in
[513]
ETS with m1 finance you can pick exactly
[516]
what you're investing in build your own
[518]
portfolio build your own pies and decide
[521]
exactly where your money is going to be
[522]
going however that can be an issue for
[525]
some people if you're completely new to
[527]
the stock market and investing that has
[529]
a lot of power to be put in your hands
[531]
and I just encourage you guys to educate
[533]
yourself before you start
[534]
vesting a lot of money into some
[537]
portfolio or plan when you really don't
[539]
know much about what you're investing in
[541]
another Pro is that m1 finance offers
[543]
those fractional shares where you can
[545]
buy as little as one ten thousandth of a
[547]
share and that significantly lowers the
[549]
barriers to entry for stocks like
[551]
Berkshire Hathaway or Amazon or Google
[554]
or some of these stocks that trade at a
[556]
very high share price you can have a
[557]
better diversified portfolio with m1
[560]
financed by buying fractional shares so
[563]
like I said for example if you wanted to
[565]
buy Google or Amazon and you only had
[568]
two or three thousand dollars you would
[569]
be very heavily weighted in those stocks
[572]
because the share price would take up
[573]
most of the amount of money you have to
[575]
invest but with m1 finance you could
[578]
have a well balanced portfolio because
[579]
you could say I only want to invest $50
[582]
in Amazon or $50 in Google stock another
[585]
proof for m1 Finance is the fact that
[587]
this takes the emotions out of your
[589]
investments and what I mean by that is
[591]
you build your portfolio you tell them
[593]
what percentage of your portfolio you
[595]
want in each asset and you continue to
[598]
add money and you're really not thinking
[599]
about this process and like we said
[601]
before m1 Finance is going to rebalance
[604]
your portfolio by buying what you are
[606]
underweight in so let's say for example
[608]
one of your stocks goes way up and
[610]
another stock starts to fall you would
[612]
be overweight in that stock that went up
[614]
and underweight in that stock that went
[616]
down well you would automatically be
[618]
buying shares of that stock that went
[620]
down also known as buying low and as I'm
[623]
sure you guys know the best strategy
[625]
when it comes to investing in the stock
[626]
market is buying low and selling high
[628]
now as good as that sounds it's often a
[631]
little bit more difficult to do that
[632]
because you're buying shares as that
[635]
share price is falling and you're
[637]
averaging down so it's a little bit more
[639]
difficult to do this when you are doing
[641]
it yourself and buying shares low but
[644]
when this is happening behind the scenes
[645]
you're really not worrying about it and
[647]
it might be a little bit less
[649]
emotionally involved for you but again
[651]
like I said make sure you know what it
[653]
is that you're investing in because if a
[655]
stock is falling at a rapid pace it's
[657]
most likely falling through a reason and
[659]
you want to make sure you have long term
[661]
confidence in that investment otherwise
[663]
you're gonna want to consider why it is
[665]
that stock is falling and if you may
[667]
have possibly
[668]
made a very bad choice with your
[670]
investment and again that is kind of
[672]
what I said earlier
[673]
m1 finance in apps like Robin Hood put a
[675]
lot of power in your hands the ability
[677]
to go out there and buy thousands of
[679]
different stocks do your due diligence
[681]
learn about investing in the stock
[683]
market before you start dabbling around
[685]
with individual stocks and like I said
[687]
as a beginner I would start off with
[689]
ETFs and stocks on the Dow Jones
[691]
Industrial Average or other blue chip
[693]
companies out there another advantage to
[695]
m1 finance is that they do offer
[697]
retirement accounts so if you want to
[699]
take advantage of that tax savings you
[701]
can do so through m1 finance and then
[703]
finally you can automate deposits from
[705]
your bank account so let's say for
[707]
example you built your portfolio you've
[709]
funded the account with $2,000 and then
[712]
you want to invest $50 a week well you
[714]
can have that automatically go out of
[716]
your account and be invested in your m1
[719]
Finance account without even doing
[721]
anything and the other advantage to that
[722]
is that by doing this your dollar cost
[725]
averaging regularly accumulating shares
[727]
over a long period of time and as a
[729]
result you're going to be paying the
[730]
market average for those shares so it
[732]
really helps you to do two of the best
[734]
strategies out there number one that is
[736]
buying low and selling high and number
[739]
two that is dollar cost averaging
[741]
regularly accumulating shares over a
[743]
long span of time okay moving on now
[745]
what are the cons of investing in m1
[747]
finance well one of the major advantages
[749]
of wealthfront and betterment is that
[751]
they offer tax loss harvesting and we
[753]
talked about that in that review of
[755]
betterment so if you guys want to jump
[756]
over check that out it's gonna have more
[758]
details about tax loss harvesting but
[760]
it's essentially a way for you to cut
[762]
down on your tax bill and your exposure
[764]
to capital gains but instead m1 finance
[767]
offers tax minimization where they're
[769]
looking to lower the amount of taxes and
[772]
they're trying to sell your investments
[774]
in the most efficient way possible when
[776]
you're looking to withdraw from your
[777]
account
[778]
so the first investments they will sell
[780]
are those that you are overweight in
[782]
that have no tax liability after that
[785]
they will sell ones where you have long
[786]
term capital gains tax and then third
[789]
and finally they sell ones where you're
[790]
going to be exposed to short-term
[792]
capital gains the highest tax rate you
[794]
will pay as an investor but if you are
[796]
looking to have that advantage of tax
[798]
loss harvesting or if you're looking to
[800]
have
[801]
direct indexing through wealthfront
[803]
you're not gonna have that available to
[805]
you through m1 finance and you're going
[806]
to want to consider those alternatives
[808]
another con is that for obvious reasons
[811]
m1 finance is not for day traders or
[813]
short-term traders but again I don't
[816]
think anybody who's interested in day
[817]
trading is looking at the m1 finance
[819]
platform it is simply not built for that
[821]
another con is the fact that there are
[824]
no mutual funds with m1 finance but like
[827]
I said earlier I think m1 finance is
[829]
really geared towards that
[830]
do-it-yourself investor and that type of
[832]
investor is not really interested in
[834]
mutual funds or active money management
[837]
so I don't really see that as a con but
[840]
some people may say that and I believe
[841]
it is worth mentioning and then finally
[843]
something else that some would consider
[845]
to be a con is that you are fully
[847]
invested at all times within one finance
[849]
so any money going into that account
[851]
above $10 is going to be invested across
[854]
your portfolio
[855]
so if you want to keep cash on the side
[857]
you have to keep that money outside of
[859]
your m1 finance account they will not
[862]
hold the cash balance within that
[863]
account okay so finally who would I
[865]
recommend m1 finance to and who is it
[868]
not for this is for intermediate or
[870]
experienced investors you've been
[872]
involved in the stock market for maybe a
[874]
year or two you know what it is that
[876]
you're doing and you're looking to be
[878]
investing in maybe some ETFs as well as
[880]
some individual stocks and you want to
[882]
be more active with your selections but
[884]
you also don't want to worry about
[885]
rebalancing your portfolio and being
[887]
overweight or underweight in certain
[889]
stocks and you want to automate the
[891]
process of dollar-cost averaging that is
[893]
pretty much exactly what m1 finance is
[896]
going to do for you and it's perfect for
[898]
this type of investor m1 finance is also
[900]
great for the cost-sensitive investor if
[902]
you're somebody who's looking to cut
[903]
down on your fees that you're paying for
[905]
a financial advisor or for a Robo
[908]
advisor or for your mutual funds m1
[911]
finances honestly your best choice here
[913]
having a 0% fee of any kind no fees at
[915]
all with them on Finance now you are
[917]
doing a lot of the work yourself in
[919]
terms of building your portfolio or
[921]
selecting that portfolio on your own but
[924]
you could always go talk to a fee-only
[926]
financial advisor pay them for a
[928]
consultation
[929]
ask them what you should be doing with
[931]
your money and then build that exact
[933]
portfolio
[934]
within m1 finance that way you do have
[936]
some sense and some ideas as to what you
[939]
should be doing with your money and what
[940]
your asset allocation should be so that
[942]
way instead of paying them a fee every
[944]
single year you pay that one-time fee
[946]
and then maybe once a year you sit down
[948]
again with that financial advisor that
[950]
fee-only financial advisor and you have
[952]
them take a look at your allocations and
[954]
determine if anything needs to be
[956]
changed based on your life events or
[958]
your goals or your objectives so that
[960]
again is a great option here with m1
[962]
finance to get some financial advice
[964]
from a third party outside of m1 finance
[967]
and then build that portfolio within m1
[970]
finance and avoid any kind of management
[972]
fee or expense ratio or annual fees now
[975]
the one thing I do want to mention is
[977]
that when you are investing in ETF there
[979]
is an expense ratio it is usually very
[981]
inexpensive if you look at the ETF's
[983]
that Vanguard offers you do pay an
[986]
expense ratio and you are still
[988]
obviously going to pay that by investing
[991]
in ETF through m1 finance but that money
[993]
is not going to m1 finance at all that
[996]
remains with Vanguard or whoever is
[997]
operating that ETF okay so who is m1
[1000]
finance not for I don't think it's great
[1003]
for beginners just because it puts a lot
[1005]
of power in your hands now if you are a
[1007]
beginner you could invest with m1
[1009]
finance but I just want to make sure you
[1011]
are doing your due diligence and making
[1013]
sure you know what it is that you're
[1014]
investing in and knowing that you want
[1017]
to be involved in this stock or this
[1018]
investment for the next couple of years
[1020]
now if you go ahead and start a
[1023]
portfolio and you invest in a low fee
[1025]
sp500 ETF and maybe some blue chip
[1028]
stocks or if you use one of the
[1030]
pre-built portfolios not a problem I
[1032]
think you could do that as a beginner
[1033]
but if you were to build your own stock
[1035]
portfolio without having much experience
[1038]
and then start putting a massive amount
[1040]
of money into your m1 finance account
[1042]
that is where I would be concerned just
[1044]
because a lot of the time beginners
[1046]
don't necessarily know what it is
[1048]
they're looking for when they're picking
[1049]
stocks and so I would recommend you know
[1052]
getting a little bit more experience
[1053]
under your belt before automating this
[1055]
whole process of funneling money into
[1057]
your investing account and buying stocks
[1059]
individually it's also not for day
[1062]
traders as we discussed and short term
[1064]
investor that is just not built for that
[1066]
there are other platforms out there
[1068]
for short-term investors and day traders
[1069]
anyways guys that's gonna wrap up this
[1071]
video here reviewing m1 finance if you
[1074]
guys are using this app drop me a
[1076]
comment down below and let me know what
[1077]
you think of m1 finance and like I said
[1079]
if you guys are looking to open an
[1081]
account with m1 finance I have a link
[1082]
for them down in the description below
[1084]
it's an affiliate link but you of course
[1086]
do not have to use it
[1087]
I certainly appreciate it if you do
[1089]
because it does help me out and support
[1091]
my channel here and allows me to make
[1093]
more videos like this if you guys have
[1095]
any other accounts out there you want me
[1096]
to review let me know with a comment
[1098]
below but thank you guys so much for
[1100]
watching this video and I hope you have
[1102]
a great rest of your day if you are
[1104]
interested in learning more about
[1105]
investing in the stock market I've
[1108]
created a free course just for you the
[1111]
link is in the description below here
[1114]
are a few other videos you might enjoy
[1116]
as well
Most Recent Videos:
You can go back to the homepage right here: Homepage