M1 FINANCE REVIEW 2020 📈 Best Investing App For Beginner's! #Best Education Page #Online Earning

- There has never been a better time

to invest in the stock market than right now.

And no, this is not because of perfect market conditions

or anything like that.

The reason is because new investors now have an array

of free investing platforms available to them

that allow them to trade stocks commission free

and even just a few years ago,

it was common to pay as much as $7 to $10 per trade.

I know when I started investing in the stock market,

I traded through Scottrade

and I was paying $7 per trade.

Now, there are a lot of free investing apps out there.

I've reviewed most of them here on my channel

but one of the most popular free investing apps

out there today is called M1 Finance.

And we're gonna be focusing on this app

in this review today.

Now, I'm gonna keep this review short

and highlight some of the basics here

of why people like M1 Finance

and areas where they may fall short.

But if you want a more comprehensive review,

and a tutorial of how to use this app

and get started with it,

go ahead and click the link in the description below

because I've put together a completely free

30-minute long video training

on how to use and get started

with the M1 Finance investing app.

Now, one last thing I wanna mention

before I get into the review,

I am affiliated with M1 Finance.

So if you do use my link,

I earn a commission in the process

and I do thank you for your support

as that allows me to put videos like this together.

But that being said,

let's go ahead and get into the review

of the M1 Finance investing app.

All right, guys, so the first area

where M1 Finance really shines

and provides one of the most useful features

for investors is something called fractional shares.

Now, if you're not familiar with this,

this is the ability to buy less than one share

of a given stock.

In fact, with M1 Finance,

you can buy as little as 1/10,000th of any share

of stock or ETF that trades on that platform.

Now, you may not understand how powerful this actually is

until you consider stocks out there like Amazon,

for example, that trade close to $2,000 per share.

If you were to go out there

and purchase a share of Amazon

on a free investing app like robinhood,

you would have to buy one entire share of Amazon

and that would cost you, as you can imagine,

as much as one share close to $2,000.

Now, I don't know about you guys,

but when I first started investing,

I certainly did not have $2,000 sitting aside

that I could put into one share of a stock like Amazon.

So they take the share price right out of the equation

by offering these fractional shares.

So if you wanna go out there and buy $25 worth

of Amazon stock,

you can do that through M1 Finance.

So I wanna go ahead and open up the app now

and show you guys my portfolio

and show you what these fractional shares

actually look like.

So here we have my small M1 Finance portfolio

that I use for basically demonstration purposes

within the app.

I started out with a $100 investment

and it's actually done extremely well.

I'm up 21.5% in this portfolio.

But as you can see here,

this portfolio holds Vanguard,

the S&P 500 index fund,

it holds Amazon stock,

it holds Apple and Microsoft.

And as I'm sure you guys can imagine,

every single one of these stocks and ETFs trades

for over $100 per share.

So if we click on one of these, for example,

like Amazon, as you can see,

my position here is 0.01817 of a share

at a cost of 29.99

and I paid about $1,650

as my cost basis for Amazon.

So I didn't have to spend $1,650 on a whole share of Amazon,

I could buy just a fraction of a share,

allowing me to own whatever stocks I want

and to build a diversified portfolio

with a much smaller amount of money.

Now, another area where M1 Finance shines

is by offering retirement accounts completely free.

Now, as I'm sure you guys know,

one of the most powerful investing tools out there

is something called the Roth IRA.

If you're not familiar with this,

I'm gonna go ahead and link up to a video

in the corner that talks about how you can become

a tax-free millionaire

with a retirement account,

particularly with Roth IRA.

But most brokerages out there

that offer retirement accounts have commissions,

and different fees associated with these accounts.

M1 Finance offers 100% fee-free retirement accounts

and the real kicker here is that it's just a $500 minimum

to open one of these accounts.

So if you have interest

in following that tax-free retirement strategy

of the Roth IRA,

you can open that up with M1 Finance

and the process is extremely easy.

They also offer something called

Rollover Concierge service.

So if you wanna roll over an old IRA

or an old 401 k

from a previous employer,

they will help you out with the entire process.

All right, now the third area

where M1 Finance shines

and the reason why dividend investors are flocking

to this app is because they offer something

called portfolio-level drip

or dividend reinvestment.

Now, if you guys know this or not,

one of the best ways out there

of earning compound interest

is by buying dividend stocks

because when you take those dividends

and reinvest them, you're earning more dividends

and then you're able to earn dividends from your dividends

which allows your money to grow exponentially.

Now, a lot of brokerages out there

either don't offer dividend reinvestment

or they charge commissions on those trades.

Or the other issue you often run into

is that when you have a dividend reinvestment,

you're only able to buy whole shares.

So for example, if you invest with robinhood

and you earn a dividend from a stock you're investing in,

well, you would need to have enough money

to buy a whole share of that stock

because they do not offer fractional shares.

So here's what happens on M1 Finance

when you earn a dividend.

A couple of these investments in my portfolio have dividends

and if I go over here to the Activity tab,

you can see where I earn those dividends.

In fact, just recently on November 14th,

I earned a five cent dividend from Apple.

October 1st, I earned 26 cents from the Vanguard S&P 500 ETF

and so on and so on.

So when those dividends are paid to you,

they're going to go over here

and they're going to be in the cash balance held

within your account.

As you can see right here,

I have $1.15 in my cash balance

and I have this feature called M1 Auto-invest turned on.

So what's going to happen here

is that once that cash balance exceeds $10,

they're going to invest that $10

across the entire portfolio,

effectively reinvesting those dividends

across my whole portfolio.

And again, because you're able to reinvest those dividends,

and purchase fractional shares,

you're keeping the maximum amount of money invested here

and you are earning that compound interest.

The fourth reason people really enjoy this app

is because of a feature called automatic rebalancing.

So a lot of people are not even familiar

with the concept of rebalancing

but essentially what it is

is when you have a portfolio,

you're going to experience something called portfolio drift.

It sounds confusing but it's really not.

As you can see here, I have four different stocks

and they've all performed very differently.

The Vanguard S&P 500 ETF is up 17.29%.

Amazon stock surprisingly is the worst one here,

up only 7.14%.

Apple is up 59.63% which is crazy

and Microsoft is up 47.66%.

So all investments are going to behave differently

within your portfolio.

So you may set target allocations

or how much of that stock you want to own

but because they all do different things

at different times,

those allocations are going to drift.

So on the left-hand side,

you can see what my allocations were.

For the Vanguard S&P 500 ETF, it was 50%,

for Amazon it was 30, for Apple it was 10

and for Microsoft it was 10 as well

but because of the performance of these stocks

and portfolio drift,

my allocations have now skewed.

So Microsoft is now 12.1% of my portfolio,

Apple is 13%, Amazon is 26.7%

and Vanguard is 48.

So I am effectively overweight in Apple

and Microsoft and underweight in Amazon and Vanguard.

So what M1 Finance does here

is as I add money to this portfolio

or take money out,

they're going to buy more of whatever I'm low in

and buy less of whatever I have too much of

or if I'm selling from this portfolio,

they're gonna sell more of what I have too much of

and sell less of what I don't have enough of,

effectively rebalancing that portfolio

and bringing me back to my target allocations.

Now, there are literally so many reasons

why people love M1 Finance,

but I wanna just focus one more to keep this video short

and that is something called expert pies

and it's something I have not seen

any other brokerage offer

and it's a really useful feature.

So this right here is called a custom pie

because I built it myself.

I chose these four investments,

chose my allocations and invested my money

but let's say, for example,

you don't wanna do this for yourself.

You don't wanna build a portfolio from scratch

and you want some help

as far what you should be investing in.

Well, if you go over here to the Research tab,

we can take a look at what M1 Finance has

called Expert Pies

and these are expert-built portfolios

you can invest in completely free.

M1 Finance does not collect any fees

to invest in these portfolios

and there's over 30 different ones.

This includes General Investing portfolios

that range from ultra aggressive

to ultra conservative.

This also includes target date retirement funds,

income portfolios and even hedge fund followers.

If you wanted to follow some

of your favorite billionaire investors out there

like Carl Icahn, for example,

you could replica his portfolio.

Or there's the basic Just Stock & Bond allocations

that you can invest in.

And if you wanna learn more about each one

of these portfolios,

all you do is click on it

and it gives you a description

and you can click on Targets

and it shows you exactly what that portfolio is invested in.

So these expert pies really take the guesswork out

of investing and give you that hand-holding completely free.

So overall, for the reasons mentioned in this video,

M1 Finance is my favorite investing platform out there

for long-term investors.

And on top of that, M1 Finance also also has great features

for dividend investors

as well as target date funds specifically meant

for retirement investors.

Now, that being said,

M1 Finance is not an ideal platform

for active traders but that is simply not

what the app was designed for.

Now, M1 Finance can be a little bit complicated

to get started with and navigate the platform

but that's exactly why I put together

that free 30-minute video training on M1 Finance

that is linked up down in the description below.

So if you're ready to start that free training, guys,

go ahead and click that link down in the description below

and I will see you there

but thanks so much for watching this video.

I hope this was helpful to you

and I will see you in the next one.

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