M1 Finance Brokerage Review

I am attempting to build a $100,000 portfolio using M1 Finance. It’s a robo-adviser platform that is incredibly easy to use. You can sign up for your free account here. Once you sign up, if you want to use the same portfolio that I use in the video, click here.


In this M1 Finance review, I will explain why you should definitely check out their platform. I am an affiliate, however, I only receive anything if you sign up using my link, and it is of no cost to you. Either way, I hope you give them a look since they really have a lot to offer!

What is M1 Finance?

M1 Finance is a free brokerage platform that allows you to invest in stocks, bonds, and ETFs commission-free. Because it is a robo-adviser, it eliminates a lot of costs traditionally associated with brokerages and passes those savings to its users. It has a very slick interface and gives you a lot of flexibility in creating your ideal investment strategy with the least amount of headaches. Let’s take a look at some of those features:


This is arguably the best feature of M1 Finance. The user interface is sleek and makes it really easy to understand your exact holdings very quickly.

You can see you total holdings on the left, with a detailed breakdown next to it. You can click on each of the holdings to see how specific stocks have performed over various time periods.

M1 Finance also has a detailed research section that let’s you quickly search for stocks, bonds, and ETFs that might fit your investment strategy. You can organize them by things like dividend yield, market cap, and historic returns among many other characteristics. This research section makes it very easy to build your custom portfolio with a variety of companies and funds.

Their mobile app offers all of the same features and a similarly great interface. You can even catch up on market news within their platform to stay up to date with all of the latest financial headlines.

Create Your Own Index Fund with M1 Finance “Pies”

Once you have selected some items to invest in, you can put them into your own sort of fund, or “pie” as M1 Finance calls it. You build your pies by adding stocks, bonds, ETFs, or even other pies to them.

M1 Finance also offers “expert pies” which are pies that their team have specifically created if you do not want to pick stocks yourself. For example, they have a “Berkshire Hathaway” pie which mimics what Warren Buffett’s company has invested in based on their last SEC filing. It lets you invest in all of those publicly traded stocks that Berkshire holds without having to do the digging yourself.

You can also copy other people’s pies. I personally copied a pie from Joseph Carlson’s dividend portfolio that he is also documenting on YouTube. That pie makes up a significant portion of my pie, which also has other pies within it.

If you want to use the same portfolio that I use in the video linked above, click here. You can easily adjust the holdings within my portfolio if you want to use a different strategy. M1 Finance makes it very easy to share pies so that other people can copy them or adjust them for their own strategies and risk tolerance.

Portfolio Auto-Balancing

Once you have your pies created and your portfolio funded, M1 Finance can get to work. Based on your initial target allocations within your pie, M1 Finance will constantly rebalance your portfolio by using any new cash invested into it (or by using dividends that your holdings earn) to prop up “under-weighted” holdings.

For example, when Tesla stock soared in February 2020, one of my pies that had Tesla in it became “overweight.” The next time I added money to the account, M1 Finance did not add more money to Tesla. It instead tried to rebalance my portfolio by funding all of the other holdings so that they would no longer by underweight compared to my other pies.

You can also tell the platform to manually rebalance the portfolio by selling current holdings to get back to target allocations. This can have tax consequences so consult a tax professional if you are unsure about what to do next! However, as long as you keep investing into M1 Finance, it will keep rebalancing your portfolio by putting new cash towards underweight holdings and not putting more money towards holdings that have grown faster than all of the rest.

Either way, this feature makes it very easy to invest mindlessly. Your portfolio will always try to maintain your target allocations without you doing anything else.

Fractional Share Investing

Fractional share investing is when you buy a portion of a stock rather than the entire thing. Not every brokerage platform allows for this style of investing. Thankfully, M1 Finance does.

What does fractional share investing allow you to do? Basically, it lets you fine tune your portfolio so that you can maintain a very specific portfolio allocation. Rather than needing to save over $1,000 to purchase an Amazon share, you can just buy a small portion of one. You get to enjoy the upside of otherwise very expensive stocks without having to fork over a huge amount of money. It also let’s the platform’s auto-balancing stay very precise since it can just invest a few dollars at a time into each holding.

M1 Finance Borrowing

One of the (potentially) most powerful features of M1 Finance is the fact that you can borrow against your portfolio at an extremely competitive interest rate.

You can borrow up to 35% of your portfolio’s value instantly once your account reaches $10,000 or more. This allows for a lot of flexibility, especially if you invest in other things like real estate. You can also use the loan to invest in even more of your M1 holdings. Rather than having to sell portions of your portfolio for liquidity, you can just borrow against it at a very low interest rate.

Of course, whenever you use any debt, you have to be very careful. Over-leveraging yourself is a dangerous game, and can cost you a lot of money and can wreck your credit score. Consult a licensed financial professional if you are not sure about what types of risks you are willing to take!

How does M1 Finance Make Money?

Since it is commission free, M1 Finance has to find other ways to make money. M1 Finance makes money by charging interest on margin loans, as mentioned above. It also makes money through optional premium membership fees for those investors who want a couple of added perks, like an even lower interest rates on margin loans! It also lends cash holdings and some securities as a bank would, so it makes interest there as well. For more details, here is their site page explaining how they make money.

But, if you do not borrow or use their premium membership, using M1 Finance is of no cost to you. If you want to check them out, click here.


M1 Finance is a very easy to use free investing platform that lets you create your ideal portfolio quickly and easily. It is super convenient and allows an investor to maintain a portfolio tailored exactly to their personal strategy with minimal effort. And, on top of all of that, you can borrow against your portfolio in the event you want extra liquidity but do not want to sell shares. I highly recommend giving them a try, whether you are a new or experienced investor.

Jack Duffley

Jack Duffley is a real estate investor and attorney based in Houston, TX.

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