- Hey friends, in this video I am gonna take you
into my M1 Finance Investment Portfolio
to show you what I invest in.
So I know on my channel I talk about investing a whole lot
and sometimes I'll mention what I invested
but in this case I actually wanna show you
what I invest in and kind of walk you through
why I invest certain ways in certain accounts.
So we're gonna take a dive into my M1 Finance account
and I am going to take you into my four investment accounts
that I have within M1 Finance.
Now I've got some taxable accounts,
I've got some retirement accounts.
So I'm gonna walk you through each of those
and just give you an inside view,
a little behind the scenes, how the fudge is packed,
how the sausage is made
to maybe get you feeling a little bit more comfortable
about investing, you might not wanna be invest
in the same way that I do
but it's always nice to see how someone else is doing it
and why they're doing it.
I always find that super helpful.
So I'm hoping you find some sort of value in this video,
I think you will once you see what I'm doing
and if you are interested in using
M1 Finance to start investing,
if you see that you like it as I'm going through it,
then I will have a link in the description
to open an account with M1 Finance, it is an affiliate link
so I do get compensated for you using that link
in funding your account at no extra charge to you
but don't do it if you don't want to, it's okay,
as long as you find some value from this video,
that is my main goal of this video
but I would really appreciate it if you did use my link
in the description to open an account
because it helps support myself and this channel
and as always my dog, Molly,
which she's laying on the floor here somewhere.
Okay, so let's go ahead
and get into the first of my four accounts.
I'll take you into each individual one
and walk you through them, but before we do that,
make sure you hulk smash that thumbs up button,
I would greatly appreciate it.
So this first account that I'm gonna be showing you
or that we're looking at is a taxable account.
It's specifically for my future car fund account,
my free cars forever strategy is what I'm using
which I'll talk about in a second.
And this is a very high risk strategy and I don't recommend
for everyone to do it unless you have a high risk tolerance,
which I do.
The only reason that I feel comfortable doing this
is because my finances are in order,
really in order at this point in time in my life
because I've gotten rid of all of my bad debt,
I spent a few years doing that
and also because I'm currently saving 70% of my income.
So I'm in a very good financial position.
So the free cars forever strategy,
I did make a whole video about it, you can check it out,
link to that video is in the description.
Essentially what it is is, if I funded this account
for eight years, then after eight years
I'll be able to buy new cars or used cars, new to me
without spending any money for essentially ever.
The way that I'm gonna be doing that is by purchasing
those cars from the gains that I earn on this account.
Now for this one, I did choose VOO to invest in,
the Vanguard S&P 500 index fund.
The reason I chose this is because it just tracks
the stock market overall since it invests
with 500 largest companies within the United States.
I didn't add bonds into this one because I'm really trying
to maximize my exposure to the markets
because I wanna take advantage of any gain that I can earn.
So that's why you only see that I have,
I'm just holding that index fund in this account.
Now since I'm doing this, I'm also opening up myself
to some risk of loss as well.
So I'm very aware of that because I don't have any bonds
in here but I'm okay with that because like I said,
I'm in a very good financial position.
Now with this account, I actually handle
or actually deposit $150 every single month
and it gets auto deposited.
So honestly, I never really look at this account
because that money gets deposited into this account
and automatically invest it without me doing anything
because I set up auto invest with an M1 Finance.
Real quick, I'm gonna show you
what this Vanguard index fund looks like VOO
so you can click into it
and get an idea of what it's been doing.
So that was when it was last updated May 27th
and if you wanna get more details about what is in VOO,
M1 Finance really have a lot of that detail on there.
So what you do is you go to VOO details
and you can get a little bit more information
on this index fund but it's still almost not enough
to be honest with you.
So what I usually recommend doing
is if you wanna look up more information
on a specific index unto within M1 Finance,
just highlight the ticker symbol so this one is VOO,
I would do a quick Google search right here
and then you can take a look at Vanguard's Investor website
and then also I really like etf.com
that one is a good one too.
So when you go into Vanguard
because this is a Vanguard index one,
their website's gonna have the most and best details
on this but I'll show you etf.com in a second
and as you can see just invest in stocks
that are a part of the S&P 500 index
and it gives you an idea of price and performance,
it gives you portfolio.
So under this portfolio management
it actually gives you an idea of what the sector breakdown
of this index fund,
how much it holds of what
and then also it shows you the top holdings
within this index fund.
So these are a lot of well known companies
because it is a 500 largest companies
that are a part of the stock market
in United States companies.
Now etf.com is nice,
what I like about this is because you can look up any ETF
and then it has a lot of additional detail,
it gives you an idea of what it tracks,
some facts about this index bond
and then I really liked the rating portion of this, right.
So VOO is highly rated on etf.com which is a good thing,
that's what we want, we want those high quality index funds
and VOO is one of them.
So this is definitely a good way to kind of dive deeper
into figuring out what type of index fund
will be best for you,
it also lets you know some other details as well,
like if it's underweight in any certain areas.
So as you can see, it's underweight
when it comes to low size smaller companies
because like I said, VOO holds the 500 largest companies
within the index funds
so that's why naturally,
there's not gonna be smaller companies in there.
So it is a little underweight when it comes to that
but I'm very aware of that and I'm okay with that,
I'm okay with that when it comes to investing in VOO
within my taxable investment account,
my free car investment account.
Next up is another taxable investment account that I have
with an M1 Finance.
This is actually a part
of my future car fund as well, that strategy.
For this one, I'm only investing
in an M1 Finance created REIT
so Real Estate Investment Trust.
And I'm sort of using this as an experiment
because of that, I'm also using it as a part
of my car fund strategy.
So with this experiment, I'm comparing a stock market REIT.
So this M1 Finance, Real Estate Investment Trust
with Fundrise, if you're familiar with Fundrise
which is a crowdfunded real estate investing platform.
This is how we're looking right now.
I've got $990 in there,
I put in a $1,000 initially so what I did is I put a $1,000
into this and I put a $1,000 into Fundrise.
The video, if you wanna check it out
at whatever point in time I made that video
is in the description of this video.
I'll throw it down there for you so you can check it out
if you were interested in it.
Now one thing I wanna mention is with these REITs
that are publicly traded on the stock market,
they get hit pretty hard when the stock market goes down.
So as you can see right here,
at one point it was worth $1,200, right.
So watch that number right there.
So it was up to $1,200
and then once the market started to crash
earlier in 2020, you saw it went down to $739.
So this is one thing you're gonna have to get used to
if you're gonna invest in a REIT online
or on the stock market, that's traded in the stock market
because it's still gonna be volatile
because it's tied to the stock market.
Now when it comes to something like physical real estate
or Fundrise, you're not gonna see huge fluctuations
in those types of real estate investments
like you will with something
that is traded on the stock market.
So always keep that in mind.
Now you can see up here, I have a cash balance of $2.30.
The only reason for that is M1 Finance won't auto invest
until it hits $10 and because with this account,
I only put a $1,000 in, I'm not putting
any more money into it.
Once that hits $10, then it'll get auto invested.
So I'm earning a lot of money for our decent amount of money
from dividends so that's probably what's gonna make
this cash balance go up is the dividends
that I earned from this REIT.
So if we click into this Real Estate Investment Trust, REIT,
this is one, like I said, the M1 Finance chose,
they chose what's held within this REIT
and here's everything.
There are a bunch of single stocks
of kind of real estate related companies.
Don't forget, if you're getting some value from this video,
please make sure to hulk smash that thumbs up on.
Next up we have my Roth IRA so this is my baby,
this is the love of my life.
With this one, I also hold index funds.
So specifically, I hold VTI.
And I have, what is it?
97% in VTI and 3% in a BND, B-N-D.
Of the reason that I have a smaller amount in bonds
is because I don't need this money for 20 plus years
and I have a high risk tolerance as I said before.
So because of that, I'm okay with having more of my money
exposed to the market to take advantage
of the growth opportunity by doing that
so that's why I have 97% of my money, well, in VTI.
The reason that I chose VTI instead of VOO
is because VTI holds, I believe it's 35 or 3,600
different companies that are made up of large cap companies.
So what we saw with VOO, with the 500 largest companies
within the United States and also some mid size
and small cap companies as well.
So it gives you a some exposure
to the whole market that's why it's called
the Vanguard Total Stock Market Index Fund,
it makes sense, right?
So as you can see, it's got all the information here
on M1 Finance but we could always do a little bit better,
I wanna know a little bit more information.
So what we gonna do is we gonna take that ticker symbol
like I did before,
we're gonna search Google for it
and then we're gonna, we can take a look at Vanguard's
actual website and we're gonna look at etf.com as well.
So on Vanguard's actual website that kind of give you
a product summary, which is always nice
if you wanna get invested in an index fund
but you're not sure what the goal of the index fund is
this is gonna kind of break it down for you
and also has all of the other information
that you're gonna need to know
about a specific index fund, right.
What the sector breakdown is and how it's diversified.
So for VTI you can see 24% is in technology
which is quite a bit if you think about it
but if you also think about it,
technology rules this world
and it's not really going anywhere.
I kind of look at technology like a utility nowadays.
Like you could almost consider Apple or Google
like a utility company because everyone
kind of needs them
at this point in where our future is going.
So because it's a little bit heavy in technology,
I don't personally have any issues with that at this point.
Now because this is a total stock market index fund,
I'm not really essentially trying to beat the market.
My goal with investing in VTI is to keep up
with what the overall stock market is doing.
So if the total stock market is up 10%
then I just wanna try to keep up with that.
So I would hope that VTI and it should closely track
that VTI would be up 10% as well.
If the total stock market is down 30%,
then I would expect VTI to be down 30% as well.
So let's go and look at VTI on etf.com real quick,
'cause this is cool.
Once again, it shows you the rating and as you can see
an A under 99, it doesn't get much better than that, right.
So this is one of the main reasons that I invest
the majority of my money into VTI, it also get gotten award,
it looks like the best ETF choice for an average investor
in a market segment, which is what you always wanna see,
you can't beat that.
And the fees are super low,
let me go to the fees to show you, it's pretty awesome.
See 0.03%, you can't really beat that unless it's free,
which I think Fidelity does have some free index funds
which maybe I'll make a video about
at some point in the future.
Now let me go back to my M1 Finance out real quick
and show you something, let me just show you.
I do have a current cash balance of $4,000,
the reason for that is I dollar cost average
into the market every single month.
So because with an IRA, Roth IRA or traditional,
you can invest at this point this year
up to $6,000 per year.
So 6,000 divided by 12 is $500 per month
so that's what I do
and I actually had this set up for auto invest.
What I wanna dimension, Oh, these gains.
So see all these gains right here,
I have $1,800 worth of gain, so it's up 13%.
That's almost at this point, irrelevant to me.
I don't really care about those gains
because the only time that I realized those gains
or even losses as well is when I sell my investments
and because I'm a buy-and-hold index fund investor,
I don't plan on selling these things for 20, 30 years.
When I purchase something, especially in my Roth IRA,
I go into it with the mindset of I'm buying
and holding this forever.
I'm basically married to VTI at this point
to the tune of $16,000 in essentially or soon $20,000
'cause once I get that $4,000 invested,
you need to kind of have that mindset
if you're a longterm investor, don't try to time the market
and jump in and jump out and jump in and jump out.
Do your research, figure out what you wanna buy,
be okay with buying that for essentially ever
and then just go through the process of purchasing
consistently on a regular basis.
Next up, we have my traditional IRA
so this one has $4,400 in it.
And with this one, the only reason I had
this traditional IRA is because with my first job
out of college, the company that I worked for
only offered a traditional 401(k).
So once I left that company,
I can only roll it over into a traditional IRA.
So if you invest in a traditional 401(k),
you can only roll it over into a traditional IRA,
if you invest in a Roth 401(k),
you can only roll it over into a Roth IRA.
For this one, I hold the exact same investments as I do
with my Roth IRA at the same percentages targets
so 97% in VTI, 3% in BND.
For this one, I don't plan on adding any more money
until I am over the income limit
to be able to contribute to a Roth IRA.
So this one I don't plan on touching for a minute.
I do plan on making more money as time goes on
'cause I always plan on doing that
'cause I'm always working towards that.
So at some point I will have to switch over to contributing
to this traditional IRA and luckily I already have it set up
and it's kind of ready to go
so it's gonna be plug and play and super easy
to get started once I hit that income limit.
Make sure to check out this video to your top left next
if you wanna learn more about index fund investing
where I break down everything you need to know
about investing in an index fund.
The bottom one will take you to everything you need to know
about investing in a Roth IRA as well.
Make sure to hulk smash that thumbs up on,
don't forget to check out the description for more resources
in playlists to help you out
with all of your personal finance and investing needs.