M1 Finance vs Acorns: Which Investing App Is Better?

TL;DR

M1 Finance is a free investing app that offers customizable portfolios and allows for individual stock selection, making it ideal for proactive investors. In contrast, Acorns charges a monthly fee and is designed for passive investors, utilizing a roundup feature that automatically invests spare change. Ultimately, choose M1 Finance for flexibility and hands-on management, while Acorns is best for those seeking a more automated approach.

Transcript

• So in this video today we're going to be talking about the two investing apps out there known as M1 Finance and Acorns and kind of comparing these two different apps out there to help you understand which one may be a better fit for you in terms of your investing. Now at the end of this video if you guys do decide that you wanna open up an accoun... Read More

Key Insights

• 🤗 M1 Finance is a better fit for hands-on investors who want to select their own investments, while Acorns is suitable for passive investors.
• 🏛️ M1 Finance offers over 30 expert-built portfolios and the option to build custom portfolios, while Acorns only provides five portfolios.
• 🔬 Acorns is popular for its pain-free approach to investing through roundup, where spare change is automatically invested.
• 🤑 Acorns is beneficial for individuals who struggle with saving money, as it automates the process.
• 👻 M1 Finance allows for fractional shares, automated rebalancing, and customized investing strategies.
• ✋ Acorns charges a monthly fee, which can be high in percentage terms for small accounts.
• 😀 Both apps are not suitable for active trading.

Questions & Answers

Q: How does M1 Finance make money if it is free?

M1 Finance makes money through interest on cash held in brokerage accounts and by directing order flow, but users are not charged any fees.

Q: Can I start investing with Acorns without any money?

Yes, Acorns has no account minimums, so you can start investing even with just a few dollars.

Q: What is the main difference in the investment methods between M1 Finance and Acorns?

M1 Finance requires users to set money aside and transfer it to their brokerage account, while Acorns automatically invests spare change from purchases using the roundup feature.

Q: Can I invest in individual stocks with Acorns?

No, Acorns only offers five predetermined portfolios and does not allow for investing in individual stocks.

Summary & Key Takeaways

• M1 Finance is a completely free investing app that makes money through interest and order flow, while Acorns charges a monthly fee for non-students.

• M1 Finance requires a minimum investment of $100 ($500 for retirement accounts), while Acorns has no minimum investment.

• M1 Finance allows for customizable portfolios and investing in individual stocks, while Acorns offers only five predetermined portfolios and does not permit stock selection.