M1, a personal finance management company, will soon offer crypto wallets to its investors
M1 financingInc., a personal finance platform with more than $5 billion in assets, announced last week that customers will soon be able to allocate funds to cryptocurrency wallets. The company said that investors will be able to choose the percentage of recurring deposits they want to allocate and choose from 10 cryptocurrencies to put money into cryptocurrency wallets designed by M1 investors or experts.
Crypto investing is not currently on the M1 platform, but M1 investors can sign up for a queue to start trading cryptocurrencies on the new interactive portfolio dashboard called Pancakes. However, M1 did not provide a date when investors could start trading cryptocurrencies other than to follow it in the coming months.
Available cryptocurrencies include Bitcoin, Ethereum, and according to Company blog postOther high-cap liquid crypto assets.
M1 looks to remove some of the barriers to investment by automating certain aspects of investing such as fund allocation, risk management, and recurring investments. With M1, it’s not so much about trading as it is about long-term investments through portfolio management.
“In our investment segment, it’s bot investing, so it’s a bit like a bot advisor, but you can customize your portfolio to your heart’s content,” said Brian Barnes, CEO and founder of M1. ZDNet. So, you can pick individual stocks and [exchange-traded funds (ETFs)] that includes your investment portfolio. It is almost a mix between an online trading brokerage and a robot advisor. We think it combines the best of both worlds into something better than either,” Barnes added.
Investors can choose what percentage of money they want to allocate to stocks – and crypto coming soon – and set up recurring deposits on a weekly, fortnightly or monthly basis. The minimum investment amount is $100, but there are no other fees associated with the platform. Customers can sell and take money from the platform whenever they want, without incurring any fees.
Users can design their own portfolios when creating their investments based on their risk tolerance and investment philosophy, and then choose to allocate funds to the portfolios of their choice consistently.
“This gets into the difference between M1 and a bot 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 can design your portfolio however you want, but on a percentage basis. So [investors] Say, “I want 10% of my money in this investment and 10% of my money in this investment.”
In addition to frequent investments, investors can also set investment rules that they would like their account to follow. For example, if your M1 checking account reaches a certain balance, you can set it so that M1 will move excess funds into the wallets of your choice.
“There are a lot of ways to set up automatic rules, to say, ‘Until I tell you a different way M1, just run those rules’ and the money goes to work where you want it,” Barnes said.
The M1 investment platform also has a feature called “dynamic rebalancing” as a way to automate a buy low, sell high investment strategy, add some volatility protection, and avoid taxable events.
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“Let’s say you want half of your money in one investment and half of your money in another,” Barnes said. “Investment A and investment B. If B goes up a lot, it becomes more than 50% of your portfolio, and as soon as new money enters the platform, we will channel it to A until it matches 50%, then we will split it 50/50.”
Investors choose a target allocation of how much they want to invest and in which portfolios and dynamic rebalancing always makes sure that the target is achieved.
“With dynamic rebalancing, we’re doing everything we can without having to sell securities to push you into that allocation,” Barnes said. “You severely constrain that allocation without the need for taxable events. So the process puts more money into lower-weighted securities, it reduces the need to have taxable events, it keeps the risk weighted to what you want, it maintains diversification, and it works. on automating buying low and selling high.”
In addition to its automated portfolio investment platform, M1 features a checking account, a borrowing product, and a credit and debit card.
The M1 checking account has an annual rate of return (APY) of 1.70%, which – According to the FDIC Much higher than the national average of 0.10%. The debit card is linked to the account and you earn 1% cash back on purchases.
M1’s Owner rewards card It has the unique reward structure of offering higher cash back rates on purchases made with retailers where the cardholder has inventory. Cardholders can earn up to 10% cashback with qualified merchants. According to Barnes, M1 has about 70 brands across industries such as retail, airlines, online stores, and gas stations.
at the time Inflation was measured at 9.1% in JuneHaving passive income from automated investing, a high-yield checking account, and a credit card that can earn 10% on gas purchases would go a long way for customers with higher cost commodities.
“I think we have a different mentality [compared to traditional banks] Where we try to push as much as possible into the customer, Barnes said. “We certainly don’t have a silver bullet [for inflation]but earning more money and making it easier to invest are the two easiest ways to protect against the rising cost of living.”