Finally, A Brokerage That Fucking Gets It

I feel like I’ve spent the past few years screaming at the top of my lungs about free stock trading, and my favorite brokerage, Robinhood. I have a system that I’ve shared in detail, using robots to help build my ideal portfolio, and gradually building up that portfolio on Robinhood and with my IRAs.

And I have to say, it works. Because of that system, I had $3000+ extra going towards my down payment, which would make or break my house purchase. That’s an average 8% APY, for us number-nerds out there, even though I bumbled through my first year or two of trading.

This takes time, though. Each month, I devote a healthy portion of my paycheck to Robinhood and get that much closer to my ideal portfolio, but every trade means I’m off balance. It won’t be until I can invest in every single preferred stock or ETF, with the right balance across the board, that my robot overlords stock pickers will be happy. And even then, I’ll have to go in and re-balance just about every week or month, depending on the market and my attention span.

I think I just found something even better than my current system. M1 has blown me away by hitting this problem square on the head. They’re a startup built by fellow millennials who looked at the current trading platforms out there and decided they could be better. Now that I’ve had the chance to play with it a bit, I’m singing their praises from the mountain tops like I’m Julie Andrews in Austria.

Oddly happy for a movie about Nazis, but I digress.

So what’s so great about M1?

Free Trades, Check!

Before this moment, Robinhood was the only platform I use that touted free trades! M1’s trades are free, and just like Acorns, it does take a small percentage as a fee – less than 1%. Here’s the breakdown:

M1 Fees

That kicks the market standard’s butt.

Intelligent Advice, Check!

You know how I feel about robo-advisors. If you’re investing smart, your money is working for you. And I don’t care what they say, picking stocks is not just a gamble – it’s work. I spent who knows how many hours fastidiously researching every little stock ticker, only to have it lose money in the end. Zacks stock picks aren’t reliable, Seeking Alpha is great if you can devote several hours a week to verifying their sources, and Reddit gave out terrible advice – although that one’s my fault for trusting a subreddit called r/WallStreetBets. And, as I’ve mentioned before, I’m not psychic.

Even worse, I can be an emotional investor. Once I let myself lose several hundred dollars on solar stock picks because “the world has to catch on at some point.” Sure, the world will catch on, but that doesn’t mean every company in the space is a winner.

So, since I’m not clairvoyant and am an emotional investor, I’ll let someone who focuses on the numbers do the picking for me. Give me a tool that assesses my goals and portfolio, and spits out better stock picks, and I’m happy. That said, I’m of course still double checking with my trusted robo-advisors, Personal Capital and Future Advisor.

One-Click Diversification, Check!

M1 Options

What M1 actually does is a combination of suggested, diversified stock picks (ie. Retirement Target Date Funds, ETFs, etc.) and complete customization. I could buy shares of Apple and Tesla and the like through this platform, but I’m much happier not putting so many eggs in one basket.

So not only am I able to create a custom portfolio for myself, but my portfolio is built of mini-portfolios, which I can choose and change to suit my investment needs. Never again will one stock take up 10% or more of my portfolio. I’m nerding out over the simplicity, but my point is that it’s hands-off and smart investing.

Automated Investing, Check!

Of course I’m going to talk about the set-it-and-forget-it aspect. I love Robinhood, but the best they have in this department is an automatic deposit that you can schedule monthly or weekly. M1 doesn’t just let me schedule deposits just after my paychecks, but it takes it a step forward by investing those new funds for me. It not only keeps me balanced for my target portfolio, but it keeps it growing as long as I leave it to do it’s thing. That’s huge.

In addition, they have the added benefit of using banking login credentials instead of account and routing number. Sure, it’s a one-time hassle, but it’s still a nice touch!

Hands-Off Rebalancing, Check!

Ok, now that we’re caught up with my current system (which requires at least 2 tools, by the way), let’s talk about where M1 goes the extra mile. This is where we eclipse my free trading through Robinhood, coupled with my two favorite robot investors, Personal Capital and Future Advisor.

Instead of putting an extra $1,000 a month towards a handful of stocks, trying to slowly but surely build up a portfolio that achieves balance (according to my robot overlords), M1 lets you constantly stay balanced, automatically. Sure, I could do the math and buy X amount of stock A, Y amount of stock B, etc. but it’ll never really be perfect.

M1 Pie.PNG

M1’s pie chart system takes my preferences into account, and lets me invest in the perfect “slices” of the shares I want. Even better, it rebalances for me as the market changes, free of charge.

Conscious Investing, Check!

This one’s an added bonus for me. As soon as you create your account, you’re given options on how you want to invest your money, and not just in terms of the companies or the asset classes, but in terms of your social conscious or needs. I thought that was a nice touch!

Compatibility with Mint, Check!

And, finally, where would a financially savvy girl be without her favorite budgeting software? I use Mint just about every day, and it does a great job of tracking my investments – everywhere except Robinhood, where I’m trading and investing the most every month. Is anyone else frustrated that both Mint and Robinhood have been saying they’re working on compatibility for, literally, several years now?

No hate to either tool, really, but it’s such an upgrade to invest with M1 and see it when I check into Mint – especially because they’re rebalancing my portfolio for me. I’m not checking my Capital One or CitiBank apps constantly, and now I don’t have to check my top brokerage. It’s all aggregated for me in one place.

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After playing with this for the past month or so and basing my “pies” on fairly conservative goals, I’m happy to report a 1% ROI (or 12% APY, but it’s too early to call it that). I’ll keep an eye on it, and hopefully continue to see it grow.

That said, I am pretty spoiled with Robinhood’s fee-free investment platform. It’s more work, but I’ll keep running both for now to see whether it’s worth it in the long run. Still, at 1/4 of 1% or less, the fees aren’t exactly sending me running… but 0.00% is still better than 0.25%.

So, obviously I’m smitten with this service. It’s made my minimal-effort investing even easier, and hopefully much smarter. I’d love to hear from you if you’re trying it out as well! Your first $1,000 is managed for free, so test it out for yourself, and let me know if you’re as excited as I am!

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M1 Finance

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