M1, a personal finance management firm, will soon be offering crypto wallets to its investors

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M1 Finance, a personal finance platform with over $ 5 billion in assets, announced last week that clients will soon be able to allocate funds to cryptocurrency wallets. Investors will be able to choose the percentage of recurring deposits they wish to assign and choose from 10 cryptocurrency coins to invest in cryptocurrency wallets designed by investors or M1 experts, the company said.

Cryptocurrency investments are not yet active on M1’s platform, but M1 investors can sign up for a waiting list to start cryptocurrency trading on its new interactive portfolio dashboard called Pies. M1, however, hasn’t provided a date on which investors will be able to start trading cryptocurrencies other than to keep an eye on it in the coming months.

Available cryptocurrency includes Bitcoin, Ethereum, and, according to the company’s blog post, “other large-cap liquid cryptocurrencies.”

M1 seeks to remove some of the barriers to investing by automating certain aspects of investing such as fund allocation, risk management and recurring investing. With M1, it’s less about trading and more about long-term investing through portfolio management.

“In our investment vertical, it’s an automated investment, so it’s a bit like a robo advisor, but you can customize your portfolio to your liking,” said Brian Barnes, CEO and founder of M1. ZDNet. “Then, you can choose the individual titles and [exchange-traded funds (ETFs)] that make up your investment portfolio. It is almost a mixture between an online trading broker and a robo advisor. We think it combines the best of both worlds into something that is better of both, ”added Barnes.

Investors can choose what percentage of funds they want to allocate to stocks – and future cryptocurrencies – and set up recurring deposits on a weekly, bi-weekly or monthly basis. The minimum investment amount is $ 100, but no other fees are associated with the platform. Clients can sell and withdraw money from the platform whenever they want, without incurring commissions.

Users can design their own portfolios when setting up their investments based on their risk tolerance and investment philosophy and then choose to continually allocate funds to the portfolios of their choice.

“This is what makes the M1 different from a robo advisor,” Barnes said. “[With robo advisors,] you tell them you have a risk score of 7 out of 10 and they give you a portfolio based on that. With M1, you design your wallet with whatever you want, but it’s on a percentage basis. Like this [investors] say: ‘I want 10% of my money in this investment and 10% of my money in this investment.’ ”

In addition to recurring investments, investors can also set up investment rules that they want their account to follow. For example, if your M1 checking account reaches a certain balance, you can set it up so that M1 moves excess liquidity to the wallets of your choice.

“There are many ways to set up automatic rules, like, ‘until I tell you otherwise M1, just run these rules’ and the money goes to work wherever you want,” Barnes said.

M1’s investment platform also has a feature called “dynamic rebalancing” as a way to automate the low buy strategy, sell a high investment strategy, add some protection against volatility and avoid taxable events.

Plus: This high yield savings account can earn you up to 5%

“Let’s say you want half your money in one investment and half your money in another,” Barnes said. “Investment A and Investment B. If ‘B’ increases a lot, it becomes more than 50% of your portfolio, and then when new money enters the platform, we will direct it to ‘A’ until it matches 50%, and then divide it 50 / 50 “.

Investors choose a target allocation of how much they want to invest and in which portfolios and dynamic rebalancing always ensures that the target is met.

“With dynamic rebalancing, we are doing what we can without having to sell stocks to push you towards that allocation,” said Barnes. “You stick very tightly on that allocation without having to have taxable events. So the process is to invest more money in underweight stocks, minimize the need to have taxable events, keep the risk weight of what you want, keep the diversification and automate buy low, sell high. ”

In addition to its automated portfolio investment platform, M1 features a checking account, loan product, and credit card and debit card.

M1’s current account has an annual percentage return (APY) of 1.70%, which – according to the FDIC – is well above the national average of 0.10%. The debit card connects to the account and earns 1% refund on purchases.

M1’s Owner’s Rewards Card has the unique rewards structure of offering higher refund rates when shopping with retailers where the cardholder owns shares. Cardholders can earn up to 10% cashback with eligible merchants. According to Barnes, M1 has around 70 brands in industries such as retail, airlines, online stores, and gas stations.

At a time when inflation was measured at 9.1% in June, having passive income from automated investments, a high-yield checking account, and a credit card that could earn 10% for gas purchases would do a lot for customers struggling with the rising cost of goods.

“I think we have a different mentality [compared to traditional banks] where we try to push the customer as much as possible, “Barnes said.” We have absolutely no silver bullet [for inflation]but earning more cash and making it easier to invest are the two easiest ways to protect yourself from a higher cost of living. “

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