Inside: M1 Finance is my favorite investing app. It’s super easy and fun to use (even for a newbie investor like me), and most importantly, it’s FREE!
You know you need to invest. I know I need to invest.
It can seem so confusing at first though. Where the heck do I start? What’s a trading fee, and can I pay them in Pokemon cards and pogs? Don’t I need a million dollars and a monocle to be an investor?
False!
You do not need a million dollars to be an investor, my friend. In fact, if you don’t have a million dollars, you need to start investing more than the millionaire does. And it doesn’t have to be difficult, believe it or not.
I went on an epic quest through the drudges of the Interwebz to find the best investing platform for new millennial investors. I had strict criteria. It had to be:
- Easy to use
- Fun
- Low-cost, or even free
- Low investment minimums (I ain’t rich…yet!)
- Available in app form (we’re millennials. Let’s not kid ourselves.)
Thus, I bring to you: M1 Finance.
Overall rating: 9/10
About the M1 Finance app
I decided to try out M1 Finance because I’d heard good reviews of it from people who know more about this stuff than me. They also satisfied the five conditions in my epic investing app quest.
M1 Finance, with one exception that’s easily overcome, is extremely easy to use. If my Nana knew anything about how apps work, I’d feel comfortable handing this over to her to use. In fact, I’ll tell you exactly how to use the app in the next section.
This app is also fun to use. It’s easy to pick investments, and they have a lot of good ones. Once you remove all the traditional hoity-toity barriers, it’s actually fun to invest.
You only need a minimum of $100 to start investing with M1 Finance. It’s not a huge barrier, but you might need to save up some cash if you don’t have any free money available yet.
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Finally, it is indeed available in app form. However, if you’re not an app fan (boo!), you can still log into and manage your account in a more traditional way over on a computer.
How to use the M1 Finance app
Sign up for an M1 Finance account
It wasn’t too difficult to sign up for an account through the app. Just answer basic questions (name, social security #, etc…). They even let me log into my bank to link the accounts right then and there so I could get started immediately.
Pick your investments
The way M1 Finance works is that you specify how much of what investments you want in what they call a Pie — basically, just a pie chart. You can select from individual stocks, ETFs (ready-made baskets of stocks, like the entire stock market or real estate).
If you ain’t super fancy, you can also just pick a ready-made Expert Pie, such as General Investing, Responsible Investing, or Plan for Retirement. You can even add slices of these Expert Pies to your own pie (a pie within a pie—how meta!).
I’ll be honest here. The way you create your pie was a little confusing to me at first. I went to the Discover tab to see what investments they offered. Great—but how do I actually add the dang things to my pie?
I figured this out a little bit later. You have to go to your portfolio, click the little i button at the top, toggle over to Targets, and then click on the blue + button. From there you can actually add whichever investments you want. Then, specify what percentage you want each investment to make up in your portfolio.
Here’s what it looks like:
Admittedly, it is a bit easier to do this on the computer-based platform. But once you learn how to do it on mobile, it’s not that tough. Besides, it’s best to do this just once so you can set it and forget it.
Keep investing regularly
Once you have your pie all set up, all you have to worry about is depositing money into your account. It’ll automatically be funneled to the correct investment slices you chose so that you don’t have to worry about buying, selling, trading fees, or any of those shenanigans.
For example, I deposited $20 later. I didn’t have to specify that I wanted the $20 to go to the VTI ETF. Instead, it was doled out in the correct proportions to VTI, Responsible Investing, and the Vanguard REIT.
What I like about the M1 Finance app
The really cool thing about the M1 Finance app is that it automatically rebalances. Normally, over time, some of your investments will do better than others. This skews the ratio of your pie slices.
If you want a risky REIT to make up just 10% of your pie and it has a good run and gains a lot of value, it might become 20 or 25% of your pie. That puts your whole portfolio more at risk of wild swings rather than being steady over the long run.
Instead, M1 Finance will automatically keep all the pie slices in line like a sexy dominatrix with a cat-o-nine-tails.
(be glad there is no gif here)
I also love that it’s basically totally free. Normally, a lot of investment platforms charge a monthly fee. This eats away into your bottom line.
A few dollars here and there don’t seem like much. But if you’re investing over the long term, those dollars could have earned many more dollars down the road if you’d instead kept them invested rather than making it rain at Investment Platform X’s headquarters. And the more dollars you can earn, the more freedom you’ll have later.
What I don’t like about the M1 Finance app
Figuring out how the hell to actually make my pie through the app was a little confusing at first. Once I figured it out, though, the rest of the app makes sense and is pretty easy to use. It does appear slightly easier to pick your pie slices using the computer version of M1 Finance rather than the app, but still, it ain’t rocket science.
There aren’t really any other things I don’t like about this app. In fact, I’m kind of in love with it right now.
Will I keep using the M1 Finance app?
Definitely. I love this app. I can see using it on a regular basis.
I’m not sure if I’m going to move all of my IRA money over here yet (it’s tempting!), but M1 Finance does offer that capability. You can also set up recurring deposits to contribute regularly to your IRA or your regular investing account.
You can also add money whenever you want, of course. I’m actually super excited about this because I mostly want to use the M1 Finance app for something else entirely: rewarding myself for good behavior to help develop new habits.
Let me explain. I wanted to find something like the Tip Yourself app, but that was free and that I could invest with so that I’ll earn more in the long term.
After all, my guitar won’t play itself. But, if I pay myself for playing my guitar, I’ll be more likely to put this damn computer down and start practicing more.
Have you tried out the M1 Finance app? What did you think? Leave a comment below!
I became familiar with M1 Finance after I had to research it for an article I was writing. I ended up really liking it! The best way I can describe it is that’s it’s a customizable robo-advisor.
With popular and well-known robo-advisors like Betterment and Wealthfront, you answer some questions and they create an investment portfolio for you with little room for customization (outside of the risk tolerance score you can move up or down).
I like the different options they provide for their pies. Like you, I found it a little confusing how to go about creating my own pie. Love the service overall though! Still not sure I would move my IRA from Wealthfront though. I may open a taxable account there.
Thanks for the info on the app! How does the app provide information for your taxes?
Hey Alisha!
It looks like M1 Finance acts like most other brokers. On their website’s support center, it says they send you IRS documents at the end of the year detailing any money you’ve contributed to your IRA, as well as any dividends you’ve earned in a taxable (i.e., a regular, non-retirement) account. If you sell off any of your investments in a taxable account and earn money from the sale, you’ll owe taxes on that money. Just round up all the documents they send you at the end of the year and bring them to your tax preparer, or plug them into the relevant lines if you’re DIYing it – shouldn’t be too hard! 🙂
Hey, Lindsey. Thanks for the review. I’m very intrigued by M1. It could a nice platform for young people to begin their investing careers. I may give this company a whirl. Do they happen to have an affiliate program? If they do really offer free investing, I wouldn’t mind promoting them.
Actually, they DO have an affiliate program! Here are the deets: https://m1finance.getambassador.com/
Great review. I started looking into M1 Finance because I’m a current customer of Capital One Investing, but they are being acquired by E*trade. So I was looking for alternatives in case E*trade doesn’t keep the same pricing plan as Capital One Investing. Specifically, I was grandfathered into their advantage program where I pay $12 per month for 12 trades, which works out to about $1 per trade. My portfolio with Capital One only has 12 stocks.
M1 Finance seems to be the solution I was waiting for. Rather than spend the $144 per year in commissions, I could spend $0. Moreover, with M1 Finance, there is automatic re-balancing without the need to sell stocks. I’m a buy and hold investor. So, I never sell. But that means that my current portfolio with Capital One Investing is out of whack, relatively speaking. The point is that for the type of investment approach I follow, M1 Finance seems like the perfect solution.
Thanks again for the detailed review.
Thanks for stopping by. Yikes – $144 per year in commissions! That sucks. I hope M1 Finance works out for you better if you give it a shot – it’s been working great for me so far (minus the recent market swings – but that’ll occur wherever you invest).
We will see. I opened an account and will set to purchase two stocks the next trading day. I’m testing out the firm before I move my core holdings from Capital One and/or E*Trade. My only hesitation is just how new M1 Finance is and so it doesn’t have that long track record. Also, other brokerage firms like Loyal3 that offered free trades closed down, so it’s just a bit concerning.