Introduction
M1 Finance has been gaining traction in the world of personal finance and investing due to its unique blend of features that empower users to take control of their financial futures. While many investors are aware of the basics—such as automated investing and zero commissions—there are several hidden features that can enhance your experience and make M1 Finance an even more powerful tool. In this article, we will explore some of the top features of M1 Finance that you may not know about.
Fractional Shares
One of the standout features of M1 Finance is its ability to allow the purchase of fractional shares. This means you don’t need to buy a whole share of a stock, making it easier to invest in high-value companies like Amazon or Google, which may otherwise be out of reach. With fractional shares, you can invest any dollar amount, which helps in diversifying your portfolio without breaking the bank.
Custom Pies
M1 Finance uses a unique “Pie” investing approach, where users can create custom investment portfolios called “Pies.” Each Pie can consist of various asset classes, including stocks, ETFs, and even bonds. You can allocate your investments according to your preferences, and M1 will automatically manage your allocations as the value of your investments changes. This feature allows for personalized investment strategies tailored to individual goals.
Automated Rebalancing
One of the biggest challenges for investors is maintaining their desired asset allocation over time. M1 Finance takes care of this with its automated rebalancing feature. Whenever you add new funds or if your investments shift due to market fluctuations, M1 will automatically rebalance your portfolio to keep it aligned with your original Pie allocations. This helps in maintaining your risk exposure and investment strategy without requiring manual intervention.
Tax-Loss Harvesting
Another powerful feature that many users overlook is M1’s tax-loss harvesting. This strategy involves selling underperforming investments to offset taxable gains. M1 Finance automates this process, helping you minimize your tax liabilities by selling losing investments while keeping your overall investment strategy intact. This can be particularly beneficial at tax time, allowing you to retain more of your investment gains.
Smart Transfers
M1 Finance offers a Smart Transfer feature that allows for seamless fund transfers to your investment accounts. This feature automatically moves money from your checking account to your investment account based on your spending habits and investment goals. It helps in ensuring that you are consistently investing and building your portfolio without having to manually transfer funds each time.
Borrowing Against Your Investments
Did you know that M1 Finance allows you to borrow against your investments? With their “M1 Borrow” feature, you can take out a loan at a low-interest rate using your portfolio as collateral. This can provide you with access to cash without having to sell your investments, which can be especially useful during emergencies or for funding significant purchases.
Retirement Accounts
M1 Finance isn’t just for regular investment portfolios; it also offers a range of retirement accounts, including Traditional IRAs, Roth IRAs, and SEP IRAs. This allows you to grow your wealth tax-efficiently while planning for your future. The platform’s automated features apply to retirement accounts as well, making it easy to manage your long-term savings.
Community Insights
Lastly, M1 Finance provides a unique feature called “Community Insights,” where you can see how other investors are allocating their investments. This feature can help you discover new investment strategies or asset allocations you may not have considered. By seeing what others are doing, you can gain valuable insights and potentially improve your own investment approach.
Conclusion
M1 Finance is more than just a simple investing platform; it offers a myriad of features designed to enhance your investment experience. From fractional shares and automated rebalancing to tax-loss harvesting and borrowing against your investments, M1 Finance provides tools that can help you achieve your financial goals more efficiently. If you haven’t explored these features yet, now is the perfect time to dive in and make the most of your investment journey.