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My Experience Signing Up With M1 Finance

Micah McDonald

My Experience Signing Up With M1 Finance

I originally heard about M1 Finance through my financial mentor, Paul Merriman. Everything I had been told about M1 Finance made me think, finally, somebody has built the perfect platform for the long-term DIY investor. Partial shares, zero trading commissions, one button portfolio rebalancing, the ability to pick your own ETFs without worrying whether they are on the commission-free list, automatic investment of cash; what more could a long-term investor ask for?

After hearing about M1 Finance, I didn’t initially sign up with them because I am an investor who goes overweight ETFs that are going down in value and I purposely do not make any attempt of keeping a balanced portfolio. I like my portfolio the way I run it and I thought that M1 Finance could not serve my needs as an investor. Well, I was wrong. I have recently been able to save money above and beyond my retirement account, and I was putting this money in our brokerage account. I was determined to continue my own investing philosophy inside my brokerage account that I was employing in my retirement accounts. But, the more I thought about this, the more I realized that M1 Finance is a better solution for our taxable account holdings. The reason is that we may potentially be tapping these assets in the not-so-distant future, while the retirement assets are ‘off-limits’ for another decade or longer. M1 Finance’s methodology for withdrawing funds from these working assets is yet another perfect modern-day personal finance solution. If you want to withdraw funds from your account, the securities are sold in the most profitable and tax efficient methodology.

So, I spent the week of July 7th – July 13th, 2018 doing my own due diligence on this new company, M1 Finance. During that week I read all the disclosure documents at M1 Finance and I read many online reviews. Once I was satisfied that M1 Finance was indeed a legitimate, licensed, insured and reputable company, I decided to open and fund a standard brokerage account with them. Below, I have listed the time-line of the steps I took to open and fund this account.

The speed at which I was able to open, fund and invest in my selected securities was very impressive. This is definitely a PLUS for M1 Finance. At this speed, I will assume that it is possible to get paid on a Friday and have my savings working for me by the next Monday or Tuesday.

My original intent was to set up this M1 Finance account just to see if I liked it or not. I thought I would just monitor it for 6 to 12 months and then commit more savings to it. But, the more I’ve thought about the power of this investment vehicle and gotten use to their website, the more I believe I will be putting more of our saving here.

As I stated earlier in this article, I did review all the disclosures at M1 Finance. While reading these documents, I was satisfied that my money would be safe at M1 Finance. But, there was one red flag that I think investors need to be aware of. They loan out your securities while you continue own them. This is a normal practice that is done at most brokerage houses and this is one of the ways M1 creates revenue. But, I believe investors need to read, understand and accept the risk of this disclosure statement before they invest: “THE PROVISIONS OF THE SECURITIES INVESTOR PROTECTION ACT OF 1970 MAY NOT PROTECT YOU WITH RESPECT TO YOUR SECURITIES LOAN TRANSACTIONS IN THE PROGRAM. THEREFORE, THE COLLATERAL HELD FOR YOU MAY CONSTITUTE THE ONLY SOURCE OF SATISFACTION OF APEX’S OBLIGATION IN THE EVENT APEX FAILS TO RETURN THE SECURITIES.” There is a lot more to read in the disclosures, but I wanted to highlight this particular statement. As always, please perform your own due diligence prior to investing in any securities or with any broker.

Now, I’d like to move on to some screenshots that you may find useful if you are considering signing up with M1 Finance.

Here’s a link to the sign-up page: Start Using M1 Finance Today

Here’s how to build a portfolio or your first “Pie”:

When you click “Create New Pie” you’ll come to this page:

After you put in a symbol, hit enter and it will bring up the selected security:

Once you click the “+” symbol, you’ll come to this page, now click the “ADD” button:

Next, you’ll see the “New Pie” with the selected security in it:

Now you can click the “EDIT” button to change the name of this Pie and/or add more securities to this Pie.

Below, I’ve built a “SAMPLE” Pie with four securities in it and chosen “EQUALIZE” for equal weighting of this portfolio. Don’t forget to save your first Pie when you’re finished building it.

I’ve shown in the above steps how to build a portfolio or “Pie” with the M1 Finance desktop website. Below is a screenshot of the same portfolio in the iOS App.

Although I could show screenshots of the entire M1 Finance website; I think it would be better for new investors to just sign up without funding their new account and explore. There’s no obligation; if you don’t like M1 Finance, you can just delete your account without funding it.

If you want to invest in the same 31 ETFs that the Deep Value ETF Accumulator invests in, click this link:  DEEP VALUE ETF ACCUMULATOR  – EQUAL WEIGHT

If you are looking for a more comprehensive review of M1 Finance, I would suggest an article other than mine. The reason for this article was to simply introduce people to M1 Finance and to share my experience with signing up with them.  Here are a few reviews about M1 Finance that I found useful:

Thank you for taking time to read this review of M1 Finance. If you found it useful, please share it with a friend.

Respectfully yours, Micah McDonald, aka the Deep Value ETF Accumulator

Disclosure: I have a brokerage account with M1 Finance. I also have affiliate marketing links inside my website that go to M1 Finance. Please perform your own due diligence or seek the advice of a Registered Investment Advisor prior to investing in any security or investing with any company mentioned in this article.

 

 

 

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