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Investing fees are obsolete

I remember when I started investing around 1996 or so. At the time I believe you could pay around $40 in commissions for a transaction with companies like Fidelity. But online brokers were coming into the game to change things forever.

If memory serves me right, my first transactions had transaction fees around $19.95 per transaction. This was with one of the first online brokers, E*Trade.

Over the years, competition drove commission fees downward. I remember investing fees dropped to $14.95 then $9.95. A lot of brokers now will let you buy for around $7.95 per trade. That’s a hell of a lot better than the $40 commission rates from the ’90s. There’s just one problem. It’s STILL too high!

You shouldn’t pay ANYTHING in commissions in 2019!

In 2019, we’ve arrived at the point where you can buy stocks without having to pay anything in commissions when you buy or sell. You can buy and sell stocks in a “pie” when you use M1 Finance.

M1 Finance
Buy Stocks with no fees on M1 Finance

Sign up to M1 Finance and you can create an investment “pie” like I did which include some Vanguard exchange-traded funds.

Fees Matter

Investment fees may not seem like a big deal, but over time they really start to add up. They compound along with your investment returns. You don’t just lose the tiny amount of fees you pay—you also lose all the growth that money might have had for years into the future. As such, you miss out out on the exponential compounding of investing.

Imagine you have $100,000 invested. (cha-ching!) If your investments earned 6% a year for the next 25 years and had no costs or fees, you’d end up with around $430,000.

If, instead, you paid 2% a year in costs, after 25 years you’d only have about $260,000.

Hard to believe but it’s true: The 2% you paid every year would wipe out almost 40% of your final account value. 2% doesn’t sound so small anymore, does it?

So you can see why it’s so important to avoid paying commissions and also any management fees that other robo-advisors might charge.

I’m a big fan of M1 Finance and signed up to be an affiliate. I may receive a commission on some signups generated from clicking a link to sign up for M1 Finance.

So I Created My Own Mutual Funds

Hedge fund manager life, here I come. Thoughts of a high rise condo on the Upper East Side and summering in the Hamptons are certainly in my future now that I’m curating investments for the masses. Ok, I confess this isn’t exactly true in a literal sense. (or legal sense..or well, probably ANY sense.)

Living the Hedgefund Advisor life. And then I woke up.

Ok, ok…I didn’t technically create my own mutual fund. But what I did do is select a group of stocks to purchase in an M1 Finance “pie” where they will be automatically maintained. And I can invest or sell from this selection of stocks on an ongoing basis at no cost. To me, that sounds a lot like a mutual fund with a zero expense ratio and no commissions for transactions. And that’s attractive.

The “Pies” I Created

“Boglehead Portfolio”

The first is my version of the popular lazy 3 fund portfolio, but I’ve also added real estate as well. In honor of the late John Bogle, I’ve named it the Boglehead portfolio. Here it is.

My own lazy portfolio

Not exactly killing it.

Update 4-24-19: Well things turned around.

“Go Catch Growth Fund”

I also created, what I’m thinking of as a growth fund. The selection of stocks are mostly tech-based and I chose based on the fact that these stocks don’t pay a dividend as of the time of selection. This means that as long as none are paying dividends, any gains within this fund wouldn’t be subject to income tax until you sell.

So it’s cheap or free to carry. Below is a glimpse of my “Go Catch Growth” fund. Click the link to see all my selections which if I’m lucky could beat a blindfolded monkey choosing stocks by throwing darts at a dartboard.

Hand selected by me.

It’s not all caviar and fine dining.

a quarterly return as of 2/11/2019 according to M1 Finance.

Of course in the future, any one of the companies might start to pay a dividend and thus an income tax bill. I could always kick a stock out if that happens.

Here’s my selection of companies. They say that sometimes a monkey playing darts can select stocks better than a professional MBA on Wall Street so let’s see how I can do.

If you are interested in using a no-fee robo advisor to invest, consider trying M1 Finance. I’ve loved it so far and if you sign up through my affiliate link, you’ll get a $10 credit just to try it.

Obligatory Disclaimer: I’ll point out that while I have over 23 years of experience investing, I’m not a professional financial advisor or licensed broker. This post is for entertainment purposes and you should check with a professional financial advisor before purchasing or selling any stocks.

I am also an affiliate of M1 Finance which means I’ll earn a commission on some signups generated from clicking a link on this page. If you signup based on the links on this post, you’ll get a $10 credit for opening a new account. Get the details by reading on M1 Finance site. I only recommend services I use and actually think are a good deal.

How Much I Earned From Four Months of Blogging

Tell anyone you’ve started a blog and you’ll inevitably get the question about how much money you’re making blogging. It’s pretty straightforward to answer how much money I made THIS MONTH.  But it’s not at all easy to answer how much money you CAN make from blogging or how much you’re likely to earn in the future. It’s largely dependent on how much effort you put into being successful.  But what could a person expect?

Different Way Bloggers Make Money

Well, there are many things to consider about making money from a website.   There’s a great variety of ways to earn money.   Here’s some that come to mind for me:

  • You can sell your own product
  • You can promote your own service (I do a bit of tutoring on the side)
  • You can promote a product of another company which is typically called affiliate marketing ( I promote a few services I have used and recommend)
  • You can run ads on your site and get paid for your views. ( I believe you need a lot of traffic for this to be profitable..probably not ideal for early on)

These are some of the fundamental ways to make cash from your website or blog.    This blog “Getting Canned” seeks to provide entertainment and information about the experience of losing your job and I do hope to generate a bit of revenue from affiliate marketing to help keep the site running.

That means that on some of my pages, I refer to products or services like web hosting or scheduling software that I use and recommend.    If someone clicks the links and signs up for a service, I can earn a commission.   So how much have I earned from doing this so far?

Earnings From My Two Sites

Well I started this site in April 2018.  So I’m about 3 months in and I’m just now starting to ring up a few commissions.  I’ve helped refer others to sign up for web hosting and domain services and earned a few commissions that will pay out this month.   The sales commissions were earned from either clicking my site links or me sending the customer the link directly.    Here are screenshots of sales I’ll be paid for this month.

From Bluehost.   I referred two signups and should earn $130.

Bluehost Affiliate earnings
Bluehost Affiliate earnings for the quarter

And I’ve had one signup for the host I am currently using to host this site, which is Siteground.   This resulted in $50 of commissions.

Here’s earnings from Siteground affiliate program .

This felt pretty good to see earning commissions like this with minimal effort.   Full disclosure:  For web hosting signups, I typically have worked with the person to help them set up the site so it wasn’t totally passive income.

Earning my First Passive Income

I did earn my first passive income commission this month.   Someone saw the value in the M1 Finance signup which paid out a commission of $100 to me.   This resulted from them viewing my site and clicking the link.   I wasn’t involved.  To be honest, I didn’t even realize I earned this commission a few weeks ago because I’m a bit behind on my email.   But how’s that for passive income?   Thanks, fellow investor out there.

M1 Finance Affiliate commissions
My first signup from M1 Finance

Dare to dream but perhaps someday I can earn the types of commissions that some of the top people do.  It’s crazy to think some folks out there are making 10’s of thousands of dollars a month.   Take for example Michelle Schroeder who made $136,000 last month from blogging.

So the question is could you generate income from blogging?  This is capitalism so there are no guarantees.   It will take a little luck and a good deal of hard work.  Generally the harder you work, the luckier you’ll be.  In my opinion, it’s certainly worth a shot.   If you’ve been terminated and can spare around $90 that’s enough to get started.   Ping me if you need help.

How To Get Started Making Money From Running a Web Site

The first step is signing up for web hosting. If you don’t feel like spending money and are tech-savvy, why not try Digital Ocean?  Sign up here for a free $100 credit just for trying Digital Ocean.

Click here for a $100 Credit good towards hosting with Digital Ocean.

And What am I Doing With the Profit?

Some money gets reinvested back into the business and the rest gets invested into my new favorite no fee robo-advisor M1 Finance.

M1 Finance

Disclosure:  I have an affiliate partnership with M1 Finance, Digital Ocean and Siteground and may earn a commission on new signups over a certain threshold.

Move your money

Need to Rollover a 401k? Consider This.

If you’ve recently lost your job and have money in a 401k, there’s a good chance you may want to roll that money over to a new broker with more options. These days robo-advisors are a popular choice to automate investing and that can make saving for retirement easier. You just set it and forget it.

There’s a good selection of brokers in the “Robo-Advisor” market these days and most are a good choice for a rollover.  Wealthfront and Betterment were among the first.   Vanguard has an offering.  Fidelity and Schwab do as well.    I’ve even read recently that E*Trade has jumped on the bandwagon.   I have experience with Wealthfront and Betterment and I don’t really have any complaints.

mutual funds are forced to periodically realize capital gains which creates a taxable event in a non-retirement account

It’s About Cutting Fees

The reason for the growth of this style of investing is clear.   It automates something in a cost-efficient way.     Vanguard has become very popular in recent years for their low-cost expense ratio ETF’s and mutual funds.   And you can invest in a mutual fund that is managed and forget about it.   But one issue is that from time to time, mutual funds are forced to periodically realize capital gains which create a taxable event in a non-retirement account.    Your fund will typically distribute a capital gain only to then turn around and reinvest it.   And you pay taxes on that capital gain.

One way to avoid the forced capital gain is to use ETF’s.  The only issue is that if you invest in ETF’s like the famous “3 fund portfolio”, you kinda need to manage it.   A typical setup might be 33% Bond, 33% Total Stock Index and 34% International.

Three Fund Portfolio
Vanguard Three Fund portfolio courtesy of

For your initial setup, this isn’t terribly difficult, but EVERY TIME YOU PUT MORE MONEY IN (or withdrawal) you need to allocate the shares and asset allocation properly.    If you’re doing a weekly deposit, this is going to require a bit of calculation every week to calculate it down to the share.  And you can’t do fractional shares without a robo-advisor.

Bring in the ROBO-ADVISORS.

You simply make your deposit and the algorithm buys in accordance with your desired portfolio allocation.   If the bond market is down you’ll be buying and getting the cheaper shares.  If stocks are a bit high, you’ll be buying a bit less in order to bring your portfolio into balance.

This is what Robo-Advisors do and this is a fine application of technology and the algorithm.   But there’s just one little thing.  They do it for a small fee.

Bring in M1 Finance

Now, you could certainly make the debate that the fee other brokers charge is reasonable and worth it.   Intelligently maintaining the portfolio balance could give you an edge of .25% vs blind buying at a fixed allocation.   And you could also make the argument that the time saved is worth something.    But there’s an army of Vanguard soldiers that simply aren’t hearing it.  And with good reason.   Even a fraction of a percentage compounding over time adds up.  This is where M1 Finance wins.   It’s simply FREE.

If you remove the cost of the Robo-Advisor, it’s kind of hard to make an argument AGAINST using one at least for taxable accounts.    Now to be fair, I think for a retirement account you’re probably fine with just using a typical retirement target fund.  They realize capital gains but it’s not a taxable event so it doesn’t matter in a retirement account.   But for taxable accounts with free management… why not?

Initial impressions

I signed up for an account to check out M1 Finance.  I’ve got to say I like what I see so far.  The interface is slick and fast. Beyond that, you’ve got a lot of options to do more than just buying a set portfolio and can even create baskets of individual stocks you can buy commission-free. Overall I think this is a very good thing for the investment world and should force other brokers to lower or eliminate management costs for simply using a buying algorithm.

Interested in trying M1Finance? If you click any of the M1 Finance affiliate links on this page, you’ll get $10 for signing up. Click below to set up an account.

M1 Finance

Disclosure:  I have an affiliate partnership with M1 Finance and may earn a commission on new signups over a certain threshold. You’ll also get a $10 credit for signing up.