How to Use M1 Finance: Avoid this Costly Mistake

hi guys this is Jonathan with elevate wealth and today we're gonna go over a quick start guide for m-1 finance I wanted to give a quick thank you to Anthony Macko for requesting this video in the comments all right let's jump into the guide now the first thing you're gonna do is actually scroll down into the description of this video and you're gonna go to this section that says use my exact portfolio now it doesn't matter if you already have an account or if you are just signing up for an account now you're gonna use the same process if you already have an m1 account you're gonna see this button here that says save to my account and if you don't you're gonna see a button that says invest in this pie now go ahead and click that button and it'll take you through the initial signup process at this point I'm going to assume that you've finished the signup process and you've been able to successfully import the pie now if something went wrong and that's not the case it's okay the way we solve it is we go to this edit button right here we're gonna click Add then we're gonna go over to my pies and you're gonna see the high-yield passive dividend income pie and your unused pies if you didn't do it correctly before all you're gonna do is click that to make sure you add that pie you'll be back at this page and then you'll click Save go ahead and confirm and now you should see the pie down here go ahead and click on that so you can see and you see and click one more time and you see the different slices or sectors now we're gonna go over the four most used sections of m1 finance starting with portfolio all right so this right here represents your pie now this just is basically all the holdings that you have in that particular portfolio right here this is your buying sell buttons go ahead and click that now most times you're you're just gonna have M one automatically invest for you if you did ever want to you know buy or sell a specific holding this is where you would enter that order but I recommend just having M one auto invest your cash as it comes in that's gonna be you know good for 99% of people now this button right here is really important this is a rebalance button now if you're in a taxable account like my main account I highly highly recommend that you do not press the rebalance button the reason is when you press rebalance it's going to sell over weight positions and then it's gonna use the proceeds from those sales to purchase the underweight positions now the problem with this is that you create a taxable event when you sell those securities it's not something we want to do it's much much better to just you know if you want to change your allocations or something like that just change the allocation when you deposit new money it'll automatically go into the underweight positions effectively doing the same thing as a rebalance but you're not going to create a taxable event now with that said if you're in a non-taxable account such as a Roth IRA that grows tax-free like like we see right here you can press the rebalance button as many times as you want it doesn't matter because you're you don't pay tax on any of that any of those gains and you're not gonna have a taxable event when you when you press the rebalance button so I would only recommend doing that in a non-taxable accounts such as a Roth IRA all right now edit if we go ahead and click Edit right here this is where we're able to edit you know the allocation of this of this pie here if we go in here and we click the the slice we can actually go and see the sector's and we can actually edit the allocations of these sectors so say you know say you weren't as comfortable as putting 85% in real estate you can go ahead you could lower this if you wanted to but this is what I've come up with and this is optimal for me we'll just go ahead and confirm that all right so let's take a look here this is our this is the value of our account and this this account just started on the thirteenth year so you can see the net cash flow this is how much money was deposited in the account and this is the market gain here moving to the right we have the gain which is market gains and then earn dividends another important note earn dividends obviously there's nothing here that's just started yesterday but when an earn dividend shows up here it's it doesn't mean that you've actually received that dividend it just means that you've earned it receive dividends well actually be on a different screen and another important point here the return now normally when a return is quoted it's actually the time weight in return but in an m1 fineness it's actually a money weighted return and all that means is that it's it's a more accurate look at your return it includes cash inflows cash outflows and it also includes your dividends so it's just giving you a much more accurate way to look at your return it is a little strange though because not many platforms use it and then jumping up here this is just a way to to see your returns either all time or you can you know see your returns for today week month quarter or the year so it's pretty pretty handy next up we have the activity page and this is basically where all the transactions for your account live you'll see pending transactions that are going to happen and you'll see transactions that have already happened obviously since this account was just started there's really not much going on here but let's look at this one right here with the investable cash transaction it was oh it was a one-time you know pushing there so you can see here shows you the cash here and then it shows you the trades that it took now keep in mind all of these trades were totally automatic there's no intervention for me whatsoever if I had earned some dividends as well they would show up here and those dividends would use to would be used to make these trades you can see here you'll you'll see the shares that were purchased and that's another great thing about about m1 finance you actually purchase fractional shares this is really really important I shouldn't be understated the ability to purchase fractional shares is really really awesome it's actually one of the things that I'm most excited about with them one finance and the reason for that is because it vastly accelerates your your compounding right so anytime there's a there's at least ten dollars in your m1 finance account it'll go ahead and it will it'll go ahead and invest those automatically for you so it's it's pretty pretty awesome and what that does is instead of having to wait for you to you know say you wanted to buy a share that was two hundred dollars in a normal brokerage account you're gonna have to wait for you know your cash to get to that level where you can buy that one share but with this with a small with as little as ten dollars that ten dollars will automatically be invested in in all of the different parts of your portfolio according to the allocation of the slice and then within that slice it's further you know divvied up by the allocation of the individual holdings in the slice pretty awesome stuff it's done all automatically and it really allows you to take those dividends reinvest those into more shares and then those more shares will create more dividends for you and it just creates this really nice compounding that will accelerate the growth of your account now this is actually the one that's probably the most self-explanatory but in the interest of being complete we'll go over it as well so first here we have the holding name so these are just all the different stocks that you that you own and then next over here this is the amount of shares right so we can can filter here and we can basically figure out you know how much or what holdings we have the most shares in and and and vice versa now obviously more series you have that means the more dividends you're gonna get because every single share has a certain dividend payment alright so we want to be able to maximize those over over time and that happens automatically you know based on your allocations and you know your contributions the average price here is just the average price per share that you have that you purchased you're a cost basis so this is basically just your average price per share times the number of shares over time or a goal is to keep reducing our cost basis as much as we possibly can you know that's that's always it's quite helpful we always like to get things cheap as cheap as we can value this is just the current value of your under holdings okay so it's just the current market price times your shares and then lastly over here unrealized gain or loss this is just the value increase or decrease of your holdings in in total now the reason it's unreal eyes is because you haven't you haven't sold those Holdings yet when you you know if and when you did sell those then it would be a realized gain and then again it would be a taxable event all right so the last page we're gonna go over is the funding page so first of all over here on the Left you're gonna see this when you start your account you're not gonna have a bank that's been added so what we're gonna do is we're going to click add Bank now supposedly your you know easily able to connect your different banking out here I never had any any luck with it I had to do with the manual way so what I did is I went here connect using your bank and routing number I just put my bank name selectiveness checking their savings routing number account number then you press submit and basically what they do is they send to small amounts to your account they're in the cent range so like I don't know 14 cents and 18 cents those are just random numbers once those hits your accountant about one or two days you'll come back here and you'll click a button it'll say verify here and you'll enter those amounts and that way your bank account will be connected with your m1 account okay now after that's done this this button right here that says add by a bank is gonna say deposit and you'll be able to go in and you'll be able to set up a deposit either a one-time deposit or you can click a button and it will automatically deposit every single week now I definitely recommend that you get in the habit of depositing and contributing into your account every single week so what I recommend is just setting it up whatever is comfortable for you every single Monday just have a hit your hit your account and it'll automatically be invested if you so choose so talk to speaking about that you have a couple options here you can either auto invest all of my cash this is what I personally do I just like it to automatically happen you can automatically invest your cash over a certain amount so say say you wanted anytime there was over two hundred dollars in your account you could set it as as two hundred ollars anytime there was over two hundred dollars in your account it would automatically invest that but it wouldn't invest that two hundred dollars lastly if you wanted full manual control you can just say don't invest any of my cash you know you'll basically make all your own trades I really don't recommend doing that that's just you know this the whole point of this is is to be you know passive and as fast as possible so don't create more work for yourself if you have transfers set up they would be displayed here then it would show any recent recent transfers there now III said I was only gonna go over the portfolio activity holdings and funding but I'm actually gonna give you one little bonus tip here it's kind of cool so we're gonna go ahead and click the research right here then we're going to go ahead and click my PI's and if we go in here we'll be able to click our portfolio here our big PI and it's gonna give us some important data about our PI what we really wanted to see is the dividend yield of the whole PI here as you can see it's at 7.3 percent but what's what's really cool is you can actually go in and you can go into the different sectors and you can see what the dividend yield is for those particular sectors so you can see my real estate my real estate slice has a dividend yield of 7.7 telkom has a dividend yield of 5.9 you can kind of just go you know go down the list here 4.4 so it's just an easy way to see the dividend yield of your entire you know portfolio or you can see the dividend yield per individual slice if you guys have any questions feel free to reach out in the comments and if you found this video useful go ahead and drop a like all so be sure to subscribe so you don't miss any episodes of the dividend growth investing series well that's gonna do it for this one catch you guys in the next video

Channel: Elevate Wealth

Views: 19,873

Rating: 4.8945055 out of 5

Keywords: how to use m1 finance, m1 finance tutorial, m1 finance, m1 finance portfolio, m1 finance dividend portfolio, m1 finance rebalancing, m1 finance app, m1 finance review, m1 finance app review, how to use m1 finance app, m1 finance guide, m1 finance for beginners, m1 finance beginners guide, m1 finance beginners, stock market, m1 finance roth ira, is m1 finance legit, how to invest, best investing apps for beginners, how does m1 finance work

Id: BX_LSnYjbXc

Length: 13min 5sec (785 seconds)

Published: Wed May 15 2019