How to Invest Your Money With the M1 Finance Robo-Advisor

By  //  March 23, 2021

Robo-advisors are the investment industry’s Industrial Revolution. By 2025, it’s estimated that robo-advisors will manage up to $25 trillion in assets globally, which is three times more than today’s largest asset manager BlackRock.

What makes robo-advisors so revolutionary is they are aimed at the little guy. This is a fast-moving, constantly developing technology that helps low net worth retail investors break into investing.

M1 Finance remains one of the best options for investing with no minimum account balances, no management fees, and no commissions. Although you’re talking about savings of two or three percent, this could be enough to put you in the black during a bad year.

Here’s how to invest your money with M1 Finance’s robo-advisor. You can also check out this M1 Finance review for more information on its features.

M1 Finance Pies

What separates M1 Finance from its competitors, like Betterment and SoFi Invest, is the way it approaches investing. M1’s Finance “pies” provide you with a simple visual representation of your portfolio.

Each slice of your “pie” is a separate investment class. You won’t find risky or speculative investments on this platform, such as mutual funds and options, but you will find:

■ Individual stocks.

■ ETFs.

■ Government bonds.

Plus, the more you save money the more you can add to this pie.

Set a target allocation percentage and your portfolio will automatically balance itself out every time you add more to your investment.

You can still change your allocations at any time. You can also have multiple pies. If you do want to invest in a hot stock, simply create another pie and invest as you see fit. This is a robo-advisor, but you’re never locked into a specific portfolio.

Do take into account that although the platform itself will never charge you any fees, certain investments may involve fees. These are not charged by M1 but by the investment itself. There’s no avoiding them if you want to invest in those assets.

Set Up Recurring Investments

Any good guide to investing will talk about the value of compounding. The more you add to your balance the faster it will grow.

M1 Finance enables you to set up recurring investments to fund each of your investment pies.

The minimum recurring investment is $10, with no maximum limit. Once you’ve set your amount, you have to decide on the frequency.

These are the frequencies you can decide on:

■ Monthly.

■ Weekly.

■ Specific week of the month.

■ Biweekly.

These recurring investments can be placed on any part of your account. Just because you set up a recurring investment on a basket of ETFs doesn’t mean you need to establish a recurring investment on an individual large cap stock you invested in.

This ability to create multiple types of portfolio is what makes M1 Finance one of the best robo-advisors on the market today.

Create Additional, Targeted Accounts

M1 Finance offers more than individual brokerage accounts. There are many ways in which you can distribute your savings. Each account can also be targeted towards achieving a different goal.

Some of their other offerings include:

■ Taxable brokerage.

■ Four different types of IRA.

■ Checking account.

If you are saving for retirement or you are just looking to move all of your financial accounts into one place, M1 Finance can accommodate that.

Take note, although individual brokerage accounts don’t attract fees, other services do. For example, there are fees associated with ATM withdrawals with M1 Spend. There are also fees associated with their personal line of credit services.

Do M1’s Portfolios Beat the Market?

Obviously, you’re not just looking for a platform that’s easy to use. You want portfolios that are going to make you money.

M1’s portfolios are split according to the investments within those portfolios and the amount of risk attached to those investments. You can choose a portfolio based on your personal values and risk tolerance.

Many reviews for the Motley Fool and other similar advisory services claim they beat the market. While this is true, robo-advisors have a strong track record as well. Many picks are shared between M1 and various online stock screeners.

Robo-advisors are not about speculation or risky options trading. They’re designed to make you money in the long-term by investing wisely.

Why Use M1 Finance for Your Investments?

The simple fact is that if you want low fees, no commissions and the ability to invest at the click of a button M1 Finance is an excellent robo-advisor to invest with.

We don’t claim that M1 Finance is going to turn you into an overnight millionaire, but if you want to build a long-term future for your retirement, this is an excellent choice.

If you just want to invest for the future and you’re not looking to become a market guru, a robo-advisor powered platform is what you’re looking for.

Have you tried out robo-advisors for investing yet?