What are /r/M1Finance's favorite Products & Services?

From 3.5 billion Reddit comments

The target date funds are not bad. Also sure you can try to make your own pie with a bunch of stuff you like. But what you really need to do is learn a bit about the market and choose things according to your risk tolerance.

I would HIGHLY reccomend Bogleheads' Guide to Investing. If you are cheap like me find it at your local library and then you spend no money on it ;-) It talks a bit about choosing investments, what, why, how. And it breaks down a lot of interesting history about the market.

3 ETF's can diversify you into thousands of companies/funds/bonds. It can be that simple. 3 ETF's. You can try to pick companies too.

Seems like you are option 5 on this page. I wouldn't mix it with your IRA or have another in M1. You may really be better off speaking with a fee only financial advisor since the distributions may impact your tax bracket and how to best work around that. Meaning you pay for an hour of advice including where to set it up and never talk to them again. don't let them hook you into something.

https://www.schwab.com/resource-center/insights/content/inheriting-ira-understand-your-options

The above post is blatantly wrong. You shouldn't be using to /r/m1finance post for financial advice. You DO NOT need "employer" income. The IRA technical definition is "earned income" which you can read about from many authoritative sources such as: https://www.schwab.com/resource-center/insights/content/can-you-contribute-to-an-ira-if-you-don-t-have-a-job

Read the links on Google carefully.

Here's one I found for you and u/juiceboxzero :

https://www.schwab.com/ira/roth-ira/withdrawal-rules

Roth IRA (post-tax) contributions are free to withdraw ANY time. Even before 59.5 years old.

If you're over 59.5, contributions and gains (earnings) are tax and penalty free when withdrawing.

Traditional IRA (pre-tax) is treated differently:

When you withdraw money before age 59.5, you will be assessed a 10% penalty in addition to the regular income tax based on your tax bracket. If you're over 59.5, both the initial investment and the gains it earned are taxed at your income tax rate in the year you withdraw it.

Sounds like I should just transfer my 6+ figures in M1 and stop M1+ and instead use Robinhood, which now has exactly what I want (along with every 401K brokerage out there): https://robinhood.com/us/en/support/articles/recurring-investments/

> It seems like they are increasing the amount I can borrow based on how much borrowed money I invest. Is it supposed to be like that?

How can you ask this, when you then...

> Other brokers would not include borrowed/leveraged money when calculating how much I can borrow/leverage.

Say this... That's exactly how it works.

https://www.schwab.com/resource-center/insights/content/margin-how-does-it-work

> Because margin uses the value of your marginable securities as collateral, the amount you can borrow fluctuates day to day along with the value of the marginable securities in your portfolio. If your portfolio goes up in value, your buying power increases. If your portfolio falls in value, your buying power decreases.

>And if you had a 3k tax loss harvest credit, you would owe 1,342$ in taxes, saving yourself 3k.

Nope.

​

https://www.schwab.com/resource-center/insights/content/reap-benefits-tax-loss-harvesting-to-lower-your-tax-bill

>...you can use the remaining losses to offset up to $3,000 of your ordinary taxable income

​

You don't straight up receive the $3k. It's a limit of $3k that you can use to offset your ordinary income that year (and you can defer anything over $3k to the next year). Notice that the math in the example works out to show that it's ($20,000 to offset capital gains + $3,000 to offset ordinary income) * 35% marginal tax rate = $8,050 in tax savings that year from TLH.

u/Causal_Impacter might be referencing outgoing transfer fees on Robinhood's side. On their website it says they charge $75.

Source: https://robinhood.com/support/articles/360001226666/transfer-stocks-out-of-your-robinhood-account/

These started as a way to give people the option of investing with pre-made portfolios if they didn't want to build their own right away. We have some work ahead of us when it comes to a long-term focus for these. I know our Product team is always interested in hearing suggestions: https://forms.office.com/Pages/ResponsePage.aspx?id=4uiQd5Vbu0aO4vynxcHsSyr0-VqvW6lGuJC_0Ph1rqdUMVJCT0k4NEtONUk5UlNCTTFTRVk0NjhHVy4u

Interesting idea! I believe the regulatory restrictions can get tricky, but care to share this suggestion directly with our Product team? https://forms.office.com/Pages/ResponsePage.aspx?id=4uiQd5Vbu0aO4vynxcHsSyr0-VqvW6lGuJC_0Ph1rqdUMVJCT0k4NEtONUk5UlNCTTFTRVk0NjhHVy4u

Thanks for the feedback and for being a client! We do send a monthly newsletter (The Investor's Mindset), which will now include a Q/A section and any relevant updates from different members of the M1 team.

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Interesting feedback! Have you considered joining our user research program? https://forms.office.com/Pages/ResponsePage.aspx?id=4uiQd5Vbu0aO4vynxcHsSyr0-VqvW6lGuJC_0Ph1rqdUMVJCT0k4NEtONUk5UlNCTTFTRVk0NjhHVy4u

Thanks for your feedback! Have you considered joining our user research program? https://forms.office.com/Pages/ResponsePage.aspx?id=4uiQd5Vbu0aO4vynxcHsSyr0-VqvW6lGuJC_0Ph1rqdUMVJCT0k4NEtONUk5UlNCTTFTRVk0NjhHVy4u

Any further dev is always appreciated :) I'll be the first to admit I'm not a web-dev by any stretch of imagination - my daily drivers are assembly, c/c++, and android/ios lol. A far cry from javascript.

If we were to take this to the next level, it'd be nice (for the people that need it), to auto import into a pre-selected spreadsheet.

I've been working on a script using script.google.com to run this on a weekly basis, but I've been so busy at work I haven't gotten a chance to work on it in a while.

Anyways, nice job man

https://robinhood.com/us/en/support/articles/robinhood-gold-cash-management/#:~:text=If%20you%20borrow%20money%20by,money%20you%20borrow%20over%20%241%2C000.

Just google margin spending on robinhood. I already switched to their new cash card.

He can’t roll it into his IRA, it’s an inherited IRA. He has a certain period of time and then needs to pull it out. Usually it is to be pulled out by 10 years.

https://www.schwab.com/ira/inherited-ira/withdrawal-rules

You can’t just pull it into your IRA, depending on the situation you have a certain period of time before you have to pull it out. Here is all the rules:

https://www.schwab.com/ira/inherited-ira/withdrawal-rules

OP u/interested-investor:

Besides what u/Ninjapirate2000 said, you can withdraw contributions from a Roth IRA at any time without penalties.

There are penalties if you withdraw earnings (gains) prior to 59.5 years old, but there are exceptions to this rule.

A traditional IRA (pre-tax contributions) comes with penalties when withdrawing contributions and earnings (gains).

Read very carefully:

https://www.schwab.com/ira/roth-ira/withdrawal-rules

Bottomline: Try not to withdraw early from your retirement accounts unless you're retired early or retired. You want to let your equities continue to produce compounded returns over the long term.

> I am logged into FB through the browser though

This is most likely the culprit. I have less than 10 interactions, all due to "viewing content" for a small timeframe.

If you download the data, you should be able to see more information on which data is being shared.

> Is there a way to turn this off? AFAIK I never connected FB with m1finance

You don't need to connect Facebook with M1 in order for a cookie to be placed on your computer.

If you really don't want to change how you browse the internet, I'd suggest using a browser like Brave, it's essentially like Chrome, but with a bigger emphasis on privacy.

Congrats for getting yourself on the path when you are young. :)

I'd recommend reading this book:

Simple path to wealth

And likely sticking your money in something like vanguard's 'VTI' fund, which is a cap weighted market index fund and then just backing away.

Even though we have lots of neat tools at our disposal, the best tool you have is a long timeline. Invest often and invest broadly and the market will take care of the rest.

Best of luck!

Here's info on foreign tax credit and the difference between claiming a credit or deduction:

https://www.bogleheads.org/wiki/Foreign_tax_credit

https://www.schwab.com/resource-center/insights/content/claiming-foreign-taxes-credit-or-deduction

Note: You can't claim it in a Roth IRA. This is why Bogleheads wiki and other sources recommend holding foreign securities in taxable accounts. Not a big deal though.

Directly from the 2nd link:

"Withdrawals from Roth accounts are not taxed by the IRS, so you’re not able to get a benefit from the foreign taxes you paid."

Also I've heard The Odin Project is a great free course for learning web development.

I wish someone had told me but you should learn JavaScript, React, Java, and sql. Once you've learned JavaScript and react, make a web page and so you can put it on your resume. Once you learn all of the above, learn how to make a CRUD application. Those 4 languages and CRUD are all and everything you need to know for tons and tons of software jobs. Just warning you though, software is really competitive rn and finding a job likely won't be any easier.

Age 59 and under:

You can withdraw contributions you made to your Roth IRA anytime, tax- and penalty-free. However, you may have to pay taxes and penalties on earnings (gains) in your Roth IRA.

https://www.schwab.com/ira/roth-ira/withdrawal-rules

That said, you will soon have another $500 so why not wait until then so you don't need to withdraw now?

You can then let your retirement account compound for decades uninterrupted.

Or go with a different brokerage?

gg no re.

Just FYI if you weren't aware: You can withdraw contributions from a Roth IRA (without penalty) at any time because contributions are already after-tax. It's the capital gains and dividends earned that don't apply to this rule.

https://www.schwab.com/ira/roth-ira/withdrawal-rules#:~:text=You%20can%20withdraw%20contributions%20you,had%20less%20than%20five%20years.

That said, while I can see how others can use a Roth IRA as an account to fund their first home purchase, I personally wouldn't withdraw from my retirement accounts (Roth IRA and 401k) until retirement. House fund sits in immediate liquid cash.

>Then give me a timestamp or something and I'll take a look at it. I really don't want to sit there and listen to Graham Stephan for 10 minutes.

I don't really want to watch it all over again either, so I'll just link the study for you to read https://www.schwab.com/resource-center/insights/content/does-market-timing-work .

>You're starting off telling people that time is not a key component.

What do you mean? I'm just saying that trying to time the market is most likely going to lead to worse results for OP.

>Well we could just get rid of the statement all together.

I just really didn't guess that I'd need to break down each word to define the meaning of the adage, but hey, I guess it's my fault for assuming other people could fill in the very tiny gaps.

https://www.schwab.com/ira/roth-ira/withdrawal-rules

You need an emergency fund for things like a car repair, you shouldn’t keep that money in any kind of brokerage. A brokerage is for long term investing, not saving for car repairs. Saving for college should be done in a 529 plan not a taxable or custodial account. The Roth IRA is for saving for retirement, with the way compounding works though if you start this at a young age you will have a lot more in retirement even with putting in small amounts.

A Roth IRA is the absolute best type of account for anyone eligible.

Because you're contributing post-tax dollars, all gains sold in retirement and dividends earned aren't taxed.

Tax free growth in a Roth IRA.

You can even withdraw contributions from your Roth IRA any time without penalty (and that's because contributions are made with post-tax dollars).

Here are the income maximum limits:

https://www.schwab.com/ira/roth-ira/contribution-limits

If you make less than $124K per year and file taxes as Single, then you can contribute the Roth IRA max of $6K.

Being as tax efficient as possible makes rational sense under IRS tax codes. Especially if you earn more than $40K per year.

Personally, I keep all bond funds in my 401k and Roth IRA because like REITs, bonds pay ordinary dividends, not qualified dividends.

Stock funds are held in both my retirement and taxable accounts.

I don't track any REITs because I will own property in the future and there are other ways to achieve similar returns with 65% small-cap value and 35% corporate bonds. This would also provide better risk-adjusted returns than REITs and is more tax efficient even if held in a taxable account. There's research done on this type of factor investing.

Bottomline: Try to max your retirement accounts if you're a long term investor. And then focus on taxable accounts.

You are correct that any member of the SIPC is covered for $500K in securities and up to $250K in cash. Some brokerages have an agreement with a Reinsurer such as Lloyd’s of London who only step in if SIPC and other insurance held by the company is not enough to cover the account. An example of official wording can be found Here for Charles Schwab.

Just as an FYI, schwab just post this link on their website that fractional shares is coming soon: https://www.schwab.com/stock-slices

Fidelity already offers fractional investing on their mobile app as of February 2020

Just as an FYI, schwab just post this link on their website that fractional shares is coming soon: https://www.schwab.com/stock-slices

Fidelity already offers fractional investing on their mobile app as of February 2020

I disagree. Fidelity and Schwab both call it margin but explicitly state the funds can be withdrawn and used for personal reasons (eg covering a health emergency). Also margin matches your definition of securities-based lending - it’s a LOC that uses your portfolio as collateral.

“Because margin uses the value of your marginable securities as collateral, the amount you can borrow fluctuates day to day along with the value of the marginable securities in your portfolio.” Source: https://www.schwab.com/resource-center/insights/content/margin-how-does-it-work

Perhaps margin and securities-based lending are delineated at other brokerages... but I’m pretty sure margin always collateralizes your securities / cash (like a securities-based loan).

And from M1 themselves: “Borrowing using your investments as collateral is referred to as a portfolio line of credit, a portfolio margin loan, a margin loan, or portfolio borrowing.” https://www.m1finance.com/articles-1/portfolio-line-of-credit-guide/

>Do you have any links confirming that M1 finance actually pockets price improvement, instead of passing that onto us?

They don't say it explicitly here (see where it says "Payment for order flow") but they slightly graze over order flow and price improvement.

Compare that with Schwab's page about price improvement.

So without my explanation at all, you tell me who is being more transparent about price improvement. If you want me to show that M1 is giving you price improvement and not telling you, I can't do that because I don't use them. So far I have not met anyone who has claimed price improvement and it's not been put on any transaction history. Compare it with the big brokerages and price improvement happens quite often and it's itemized.

>There is a big difference in my mind between being paid for my order flow, and actually taking a cut of my actual payment for the security.

Why? You're paying them to acquire a security for you. Why do you care if they actually got it cheaper from a market maker whom you don't have access to? That's like saying you have a problem if the car dealership got you the car for X if they only paid Y to a different dealer for it.

You're ok with the market maker paying the broker for them paying for securities, but you're not ok with that money coming from your account? I'm lost. You want them to make all the trades before you make them and then separate out the money? How does that even work?

Separate question: how long have you been trading? Are you new or have you been trading for 10 years and now all of a sudden have an issue with how market books work? I'm just curious because it feels like you're starting to understand the difference between retail and wholesale and are upset about what profits are.

Maybe read this from Schwab:

https://www.schwab.com/resource-center/insights/content/importance-tax-efficient-investing

Clearly says what is and what isn't tax efficient.

REITs and most bond funds are best held in a tax advantaged account like a 401k or IRA.

Stocks held for over a year and most broad index funds that pay around 2% dividends or less, and muni bonds are appropriate for taxable accounts.

Personally, I keep most of my bond funds in my retirement accounts as they pay out monthly. I also track the global stock index and the S&P 500 in my retirement accounts.

My core taxable holding is VBIAX which is a single mutual fund that tracks 60/40 US stocks/US bonds. It yields around 2% so it's considered tax efficient.

In my M1 taxable, I track 28 companies and few other things. I intend to hold my stocks for at least a year to lock in the 15% long term capital gains rate. Before 1 year is up, I'll be sure to sell any holdings to tax loss harvest, but I don't forsee that happening. And I'm aware M1 isn't the right app for selling since it's better for buy/hold.

I Googled "Roth IRA withdrawal" for you:

https://www.schwab.com/ira/roth-ira/withdrawal-rules

And that's so unfortunate you have to use a portion of your retirement funds for a home purchase.

Good luck!

You can withdraw that $10k in contributions anytime tax- and penalty-free. You put $10k in. You can get $10k out anytime.

Any interest/dividends/growth/earnings that have occurred from that $10k - let's say you've had 50% growth so $5k (total $15k in the account) - would potentially be subject to taxes and penalties if withdrawn, depending on your age, age of the account, and withdrawal reasons.

This page does a good job breaking down these rules: https://www.schwab.com/public/schwab/investing/retirement_and_planning/understanding_iras/roth_ira/withdrawal_rules

Just going off of these

$75 fee https://robinhood.com/us/en/support/articles/360001226666/transfer-stocks-out-of-your-robinhood-account/

Incoming direct transfer $0 (unless that refers to cash only) https://www.m1finance.com/legal/disclosures/misc-fees/

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Thanks for sharing! I'd love to invite you to participate in our user research program. You can learn more and sign up at https://forms.office.com/Pages/ResponsePage.aspx?id=4uiQd5Vbu0aO4vynxcHsSyr0-VqvW6lGuJC_0Ph1rqdUMVJCT0k4NEtONUk5UlNCTTFTRVk0NjhHVy4u.

Product requests are best directed at our research program. You can learn more and sign up here.

Thanks for sharing. This feedback would be great for our new research program, which will help us plan improvements to M1, test new features, and collect feedback. It’s the best way to share your suggestions. 

You can learn more and sign up here.

This is a great suggestion to share with the team: https://forms.office.com/Pages/ResponsePage.aspx?id=4uiQd5Vbu0aO4vynxcHsSyr0-VqvW6lGuJC_0Ph1rqdUMVJCT0k4NEtONUk5UlNCTTFTRVk0NjhHVy4u

Thanks for sharing this detailed feedback! If you or anyone else is interested in sharing more thoughts about M1, we’re starting a research program. It’s the best way to voice your thoughts to our product team.

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You can literally copy the Acorns picks in M1. Then you don’t have to pay the monthly fee, don’t have a ridiculous 2-3 day “trading window”, don’t have to worry about them creating taxable events without your knowledge and just overall better tools/utilities.

You can piece together the portfolio depending upon what setting you have from this list of ETFs and these allocations.

Only if you used the borrowed money to pay for additional investments.

Great article by Schwab hereLink

I will probably copy the Schwab 2060 Fund’s bond allocation once I’m around 30-35. But I didn’t like the fact that it had 5% bonds already which is a bit conservative for me. They have 10% bonds at 30 years before retirement which is fine with me. Here is what they do

Just want to point out that the S&P500 is a benchmark, not the best investment. Two examples: (1) $VTI, being total market, has outperformed $SPY, an S&P500 index, over the past ten years ($VTI returned 10.3% annualized while $SPY returned 10.1% annualized); and, (2) the Schwab 1000 index has outperformed the S&P500 index for more than twenty years. All in all, $VTI is a great ETF to have in the portfolio, and there is no reason to replace it, partially or fully, with an S&P500 index fund unless you believe the S&P500 will outperform $VTI going forward.

Interesting. I've been using Wallmine. It's also free. The portfolio view is pretty good, though I can't send a link since it requires a login. How do they compare?

My takeaway is that anyone, regardless of how much starting capital they have, can still invest simply thru index funds (or insert a target date fund) and keep up with the big fish (while saving on fees).

Working in finance and reading thru the Bogleheads wiki has only solidified my conviction to continue to index for most of my stock exposure.

The Redditor's experience also reminded me of this book I was browsing one day at a nearby Amazon book store about how many of the current wealth managers and talking heads in financial media themselves keep it simple by investing in index funds:

https://www.amazon.com/How-Invest-My-Money-Finance/dp/0857198084/ref=nodl_

An observation about the wealthy: When hitting a certain net worth, they have access to private equity, which a small fish like me would like to have access to.

Like others said. Good for you in wanting to open an account and get going BUT. You need to do some reading and research first....

Go pick up a copy of this book at a local library. https://www.amazon.com/dp/1118921283/ref if they don't have it there it's only about $20

Also start here https://www.bogleheads.org/ tip left corner click on start here.