Finance News

M1 Finance Vs. Robinhood; How to Start Investing Through a Brokerage App

By Jeremy Biberdorf

Posted on November 23, 2021

Investing in the stock market has never been easier. In the last few years, the explosion of brokerage apps has taken the investing world by storm. Available on i0s and Android, M1 Finance and Robinhood have created investing platforms accessible through the palm of your hand. Here’s what you should know before you dive in.

Compound Interest

Compound interest can be your best friend or your worst enemy. If you’re new to investing, then you might not even know what compound interest actually does. This is the interest that causes your stock investments to grow astronomically. On the flipside, compound interest can also make your debt grow. So, how do you make this type of interest work for you and not against you?

It would be best if you were smart with your brokerage apps. Start by researching everything you can about making wise investments, like this complete guide to investing or investing for beginners. Do not jump into day trading unless you have assessed your financial goals and understand the process. Then you can choose the brokerage app that best fits your financial needs.

Financial Assessment; Is M1 Finance or Robinhood better for you?

What are your goals with joining a brokerage app? Do you want to day trade, or are you trying to invest in your retirement? Assessing your financial situation and goals will help you decide whether you should utilize M1 Finance or Robinhood. Let’s take a look at what each app has to offer.

M1 Finance; a hybrid financial app.

Often referred to as M1, M1 Finance is the latest super app that allows you to monitor your cash investments, credit lines, and financial services on one platform. This financial institution offers an automated advisor or hands-on investing options. You will have a daytime window to conduct your own trades, or you can choose from expertly assembled portfolios.

Is Robinhood worth the hype?

The Robinhood app is known for all the bells and whistles, literally. This app’s interface has bold colors and styling to lure in younger patrons. You’ll get emoji notifications upon investing, with other animations sent to your phone through notifications. This creates a game-like dynamic that can make day trading quite addicting.

M1 Finance Vs Robinhood

First-time investors enjoy the simplicity and uncomplicated nature of M1 and Robinhood. These easily navigatable interfaces allow you to start investing in no time with little to no income. However, the beauty is in the details.

If you need an all-encompassing service that helps you meet long-term financial goals, M1 might be the best option.

With needing very little down to get started, M1 and Robinhood are great for first-time investors that don’t have a considerable amount to invest.

Premium Services; What do M1 and Robinhood have to offer?

As no commission-based platforms, will M1 and Robinhood really work at no cost to you? The answer is yes. You can utilize these services for no cost. However, both companies do offer advanced features with premium access. See how M1 Finance and Robinhood stack up against each other in costs.

M1 has an upgraded option in their M1 Plus accounts. With M1 Plus, you can expect lower interest rates, cashback rewards, higher interest returns on savings accounts, custodial accounts, and another window for day trading for a little over $10 a month.

Robinhood offers a gold upgrade with four distinguishable features. These features include making more significant deposits, access to margin investing, Morningstar research, and Nasdaq data for an extra $5 per month.

Investing; Skill or Luck?

You can choose an app like Robinhood and empower yourself on this financial trek. Your options are that you can pay a little extra for expertly researched metrics, or you can go it alone. There are no options for financial advice through Robinhood.

However, M1 works as a Robo-advisor. This means that there are no live financial advisors to answer questions or work with you. But the Robo-advisor generates increased efficiency through computer-automated data. Algorithms work by automated rebalancing and diversifying your portfolio.

So, which is it skill or luck? As you have read, these free brokerage apps are great for beginning your investment journey. M1 and Robinhood walk a fine line between their cost differences. So, which app offers the ability for low-risk and high returns. It depends on whether you are comfortable being in control or are much happier with a passive approach.

How do these companies compare to other brokerage services?

M1 Finance and Robinhood aren’t the only brokerage services to explore on your investing journey. If you are familiar with the stock market, you have probably heard of Vanguard, and you might be curious how these brokerage apps stand up against it. Vanguard is the king investing platform for high-end investors but for how long?

Young investors are flocking to the simplicity of low-cost mobile apps. This is the future of investing. Compare the vast array of brokerage apps to stay up to date on the leading services already being utilized by millions of investors.

Start Investing Today

You don’t have to be a financier to start making your money work for you. You don’t even have to thoroughly understand the complexity of compound interest or have the time to research stock choices. M1 offers secure investments with low-risk guided opportunities. However, you do have to start. Set back and let your money work for you by signing on to M1 Finance today.