There’s no question about it.
Investing your assets into financially viable stocks and savings plans can look very intimidating at first glance.
Along the same lines, you may feel intimidated to wade into the risky waters of investment due to perceived burdens related to the maintenance of your acquired dividends.
But today, you won’t need to hold an economics degree to securely and efficiently invest your assets, thanks in large part due to the advent of app-based investment tools like M1 Finance and Stash.
In particular, these two apps have managed to energize the app-based investment brokerage industry by providing part-time investors a unified platform for analyzing, investing, and maintaining their market-based assets.
Each platform provides a variety of investment account types, as well as opportunities to learn industry best-practices from in-app couching.
Even after taking fees (or the lack thereof – Hint: M1 Finance) into account, you’ll find that M1 Finance and Stash are two of the best options for breaking into the investment industry through a single digital platform.
However, in order to maximize your returns on investment, you should select the investment platform that provides you with the most desirable features and still manages to fall within your budget.
This guide will help you make such a critical decision by providing you with key insights into the numerous benefits (and occasional drawbacks) put forth by both M1 Finance and Stash.
By taking the time to compare and contrast these options based upon the merits, you’ll be able to take your first steps towards productive financial gains in the ever-lucrative investment industry.
M1 Finance Overview (The Free App)
At its core, M1 Finance is what industry experts call a “robo-advisor” app. In essence, this means that M1 Finance is able to provide financial advice and management services by means of computerized algorithms and a degree of machine learning.
These apps tend to cost substantially less compared to human-based financial advisement, though these apps are just as capable when it comes to safely allocating, managing and optimizing a clients’ assets.
Today, there are hundreds of robo-advisor apps and digital platforms available for consumer use.
M1 Finance continues to stand out from its competitors based upon its desirable degree of customization, both in terms of investment portfolio composition and its methods for analyzing investment-adjacent data.
Though it requires a slightly higher-than-average minimum account balance, M1 Finance manages to shine bright in the industry by way of its fee-free business model. This platform also implements tax minimization techniques, ensuring that a maximum quantity of your returns on investment remain in your pocket.
Overall, investors with a variety of goals and at any skill level can make productive use of M1 Finance’s hybrid investment model.
Day-to-day management is mostly automated as well, making it a great option for those who don’t have the time (or desire) to do the heavy lifting.
On the other hand, Stash embraces an emergent method of investment allocation and management.
Rather than leave its users out in the investment market’s wild west, this app-based platform streamlines its user experience to empower users to do more with their own money.
Along the same lines, Stash operates around the core principle that the user knows best when it comes to manipulating their investment potential.
As such, Stash allows users to fully choose which stocks and accounts they invest in rather than leveraging their power through an automated advisement system. As a result, Stash is not categorized as a “robo-advisor” app.
Stash also makes it easy for prospective investors with minimal up-front financial resources to jump in and grow their portfolio. With a $5 minimal account balance requirement, Stash users are able to maximize their investment without fear of running their principle pool dry.
Stash does support its platform through a fee-based profit structure.
These fees are not dramatically excessive, though, with a “Beginner” package available that charges only $1 per month for access to dynamic investing tools and guidance on market basics. Regardless of which package users choose, they’ll also maintain access to Stash’s proprietary banking and debit card system.
Overall, Stash is certainly the app-based investment platform of choice for beginners who want to gain hands-on experience and maintain control over the precise contents of their investment portfolio.
While this carries with it a higher degree of risk and some fees, many current users believe that these costs are effectively outweighed by the enhanced degree of control that comes with choosing one’s own investment strategy.
M1 Finance Fees
When compared to other app-based brokerage services, there’s no denying that M1 Finance is cheaper.
In fact, you might even say that it is as cheap as free!
That’s because M1 Finance does not charge management fees or commissions on any transactions concerning its core services.
As a result, the only cost incurred from using M1 Finance will be precisely equal to the amount of financial resources poured into your chosen stocks and plans.
That being said, M1 Finance does come with a hefty minimum balance requirement. In order to keep your M1 Finance active and compliant with the platform’s guidelines, you’ll need to carry a $100 balance at any given time.
In the same vein, you’ll need to carry a $500 minimum balance on any retirement plans managed through M1 Finance. While neither of these minimums are “fees” outright, they can affect how much money you have available for investment at any given time.
Also, M1 Finance users (like all other investment platform users) will be required to pay SEC trading fees. Some users may also incur banking transfer fees, depending on how they chose to collect their returns.
Like several other popular digital brokerage services, Stash operates on a month-to-month fee structure.
These fees are split into feature-based packages that are fairly affordable, even at the most featured-packed tier.
For example, new investors can pay just $1 a month to access Stash’s “Beginner” package. This bundle includes full access to Stash’s debit account system as well as access to a wealth of investment educational material through the Stash Learn database.
As a slight upgrade, so-called “Growth” users will pay $3 per month to access all of the “Beginner” features as well as options for investing a personalized retirement plan.
Regardless of your chosen membership package, all members are only required to maintain a $5 minimum account balance while taking part in investment activity. While this can provide flexibility for high-rolling investors, prospective investors with low initial financial assets can also leverage this low minimum to slowly grow their portfolio.
As expected, Stash users must also pay all appropriate SEC trading fees (many of which are automatically assessed at the time of investment). However, some Stash users may be able to forgo troublesome banking fees if they maintain their dividend balance within Stash’s in-house debiting and savings accounts.
M1 Finance Key Features
No matter how you invest, it is often difficult to visualize the entirety of your portfolio (especially as your investments and their value fluctuate from day to day).
M1 Finance has found an excellent solution to this problem with their visual Investment Pies.
In essence, this feature allows M1 Finance to create a pie chart that accounts for 100% of their investments in a comprehensive, visually-clear manner.
These pie charts can be made by hand (for experienced investors) or through an in-app automated system, such as through a questionnaire.
M1 Finance even provides pre-created pie chart option to give you an upfront taste of what a diversified investment portfolio literally looks like. As an added bonus, these pie charts adapt and adjust to market fluctuations, ensuring that you always know how each of your investment pie pieces is performing.
Tight Trading Window
M1 Finance makes it easy to gauge precisely when your stock trades will become “live.” That is because all trades made on this platform occur precisely at 10 AM (EST) when the New York Stock Exchange opens for the day.
Depending on your precise investment scheme, this reliable trading window will make it easy to make last-minute portfolio adjustments while you complete your morning routine or commute to work.
Free Consultation with Specialists
There’s no question that a new platform – for investing or any other type of economic activity – can feel a little intimidating and confusing at first glance. The creators of M1 Finance recognized the ways in which this initial hurdle could impede prospective investors.
To lower this learning curve, M1 Finance provides free consulting services with their support team at your convenience.
For example, if you’re entirely new to M1 Finance platform, you can speak with a product specialist in order to learn the lay of the digital land. During these platform-wide tours, you can ask questions and learn the basics before ever investing a single cent.
Later on, as you begin to gain your sea legs, you can speak with other product specialists in order to gain personalized insight into how you could better make use of M1 Finance’s other core features.
No one looks forward to tax time, that much is true for all Americans. But for those who manage an investment portfolio, tax time can really create a headache due to the need to account for all trades and portfolio changes. T
hat being said, M1 Finance users can rest a little easier when tax season rolls around due to its integrated tax accounting system.
Specifically, M1 Finance is designed to integrate seamlessly with industry-standard tax tools such as TurboTax. Users who work with H&R Block will also benefit from M1 Finance’s tax integration capabilities.
By using these integration tools, you’ll be able to efficiently download all of your relevant investment information and accurately drop it into the appropriate tax forms.
Spend and Borrow in One Place
M1 Finance has also added features that make it easy to complete your standard banking actions all within their platform. For example, through the M1 Spend program, you’ll be able to open a checking account and link it to their proprietary preferred debit card.
This service is free to all members, though those looking to get more out of this convenient method of collecting investment dividends can also upgrade with an annual fee to receive 1% cashback on all purchases made with a linked debit card.
Saving your hard-earned money isn’t the end of the story, though. M1 Finance has also instituted a new system, known as M1 Borrow, that allows users to borrow money against their account and pay it back progressively. These loans come with an APR as low as 4.25%., allowing you to repay the loan with a fairly low interest rate.
You can even borrow up to 35% of your account’s present value, ensuring that you can increase your cash flow responsibly.
Stash Key Features
Options for Onboarding
In person or on a digital platform, starting up a fresh investment system always comes with a million questions. Stash has found a way to make those question productive by asking you a variety of focused questions when you become a user. In turn, these questions are designed to assess your level of risk tolerance, investment horizon, and personal preferences.
Should you choose to, Stash can then use this gathered information to create an investment portfolio that is customized to meet your needs (and perhaps more importantly, your budget). Otherwise, Stash will keep this information on file so that their in-house consultants can reference and quickly learn what kind of investor you are at heart.
Should you choose this latter option, you’ll be able to dive into Stash immediately and begin by choosing what kinds of stocks and ETFs you want for your portfolio. With easy-to-understand ETF names like “Social Media Mania” and “High Voltage”, you’ll know precisely what types of securities you’ll be investing in based upon their industry or corporate values. This latter option is best suited for those looking to gain experience first-hand through experimentation, with a minimal degree of “hand-holding.”
Debiting with Benefits
Stash offers their own in-house debit card that is certainly among the best in the digital brokerage industry. In order to make it easy to spend your earned returns on investment, this card charges $0 overdraft fees and also provides options for receiving your deposits up two days early. As an added bonus, these debit accounts are FDIC-insured and are not assessed any setup or monthly fees.
Within their debiting system, you’ll have access to one of Stash’s most overall innovative features: the Stock-Back rewards program. While traditional debit and credit cards provide cashback on purchases, the Stock-Back program provides users further incentive to invest by providing them credits that can be used to grow an existing portfolio.
The Stock-Back credits are based upon who you buy from. In other words, you have every reason to buy from the companies that you also invest in. For example, if you purchase a new iPhone from Apple using your Stash debit card, you’ll be eligible to receive Stock-Back credits to use on Apple’s stocks.
Investing with Stash won’t require a master’s degree in economics due to their continuous commitment to provide investment information in easy-to-digest formats. This can primarily be seen in their ETF catalog, which includes options that are diverse in content, but simple in labeling.
For example, the “All that Glitters” ETF is aligned to prices of gold, silver, and other precious metals. The “BLOK” ETF, on the other hand, makes it easy to invest your financial resources into the every-growing blockchain industry. Stash even provides ETF options based upon systematic business goals, such as the “Do the Right Thing” ETF that collects together companies that are actively working to improve society and the environment at large.
The majority of digital investment platforms require you to buy and sell full shares, which can grow pricey for those who don’t have vast financial resources to draw from on day one. Stash lowers the bar to entry into the investment market by allowing its users to break whole investments into more affordable segments. These fractional investments are a great way to stretch your dollar, especially if you are looking to diversify your portfolio on a budget.
With Stash, you’ll be able to make investments that benefit more than you alone. In fact, through Stash+’s custodial services, you’ll be able to make investments for individuals under 18 years old and allow them to eventually gain the resulting returns on investment. By using Stash’s user-friendly system, you’ll even be able to set up a custodial account to automatically transfer to the named member when they reach a certain age.
Stash’s custodial accounts are also surprisingly flexible when it comes to long-term application. Dividends gained on these accounts can be used on anything from placing a down payment on a home to paying for higher education. As such, parents using these custodial accounts can feel secure that every cent invested through this separate portfolio will serve their child’s future financial security.
M1 Finance Pros & Cons
On the positive side, M1 Finance has certainly lowered the barrier for entry into investment by removing commissions and fees from their business structure.
Combined with their integrated tax features, M1 Finance is certainly one of the best digital investing platforms for ensuring that every red cent input into the market holds some potential to become a return on investment.
M1 Finance’s visual Investment Pies are another major positive, given how they streamline the portfolio creation and management process. Those that make use of these innovative pie charts will be better able to see the weight of their investments, especially as they fluctuate in value with the market.
On the adverse side, M1 Finance’s $100 account minimum can stand as a major turn off to prospective investors who don’t have a lot of initial financial sources.
Those that can overcome this barrier may also be disappointed to learn that M1 Finance does not connect well with 401k’s and employer-sponsored retirement accounts.
This speaks to M1 Finance’s larger lack of diverse investment options, making it harder to diversify your portfolio and do more than simply invest in colossal companies.
Stash Pros & Cons
Compared to M1 Finance and other digital brokerage services, Stash is focused on a hands-on approach to investing. From day one, you have free reign to choose your stocks and ETFs or follow the integrated advisement tools that use feedback and data to recommend a personalized portfolio solution. Once you’re ready to invest, Stash’s fractional share system makes it easy to take advantage of the platform’s $5 account balance minimum.
Stash’s debiting system shouldn’t be overlooked either, given its ability to seamlessly incentivize continuous investment. Stash’s Stock-Back rewards program is one of a kind in this regard, given its ability to provide users with the opportunity to fiscally invest in a company that they already frequent with their purchases. Stash’s diverse investment catalogue makes this program even more lucrative, with options available based upon industries and corporate values.
If Stash falls short anywhere, its within its general lack of automated investment management tools. Those looking for a hands-off experience will really flounder on Stash, as it requires a sharp user to quickly learn from and act upon their previous mistakes.
Which Investing Platform is Best?
In reality, your choice between these two platforms comes down to your existing investment skills as well as your existing investment budget.
While investments made on both platforms carry a degree of risk, you’ll find that Stash is better suited for experienced, hands-on investors while M1 Finance provides better opportunities for investment novices and those looking for an automated investment management system.
Along the same lines, M1 provides a decently low barrier to entry due to its lack of membership fees. Stash, on the other hand, provides more flexibility by requiring only a $5 minimum account balance as well offering a great many more stock and ETF options.
Regardless of your chosen platform, be sure to fully educate yourself about the risks of investment before engaging this type of economic activity.
Once you feel ready, you can download Stash or M1 Finance and begin your journey towards building a fully-fledged, financially verdant investment portfolio.