Saturday, October 24, 2020

My Latest Strategy Investing On M1 Finance

 In January 2020 I opened a brokerage account with M1 Finance. I chose the account in part for its fractional shares, I wanted to buy some Amazon and Google (Alphabet) and as that costs thousands of dollars for just one share of either the fractional share seemed the only option.

William Elliott and his black Lab guide dog Leif

A couple of months after I opened the account M1 made some changes to their purchasing policy, they increased their minimum purchase price increasing the minimum from one cent to $1. This meant that my account did not grow quite as quickly.

My aim initially with an investment is to generate cash flow. M1 doesn't work for traders, but should work for cash flow investors.

Recently I have increased my deposits into the account to $13 per week. Also dividends from several sources have started to come in fairly regularly. I am earning about 50 cents per week in dividends.

In July I began to buy a new share everytime I received a dividend. Taking one dollar from my cash reserve and the full value of any dividend received and using this to buy a high value dividend paying stock.

Some weeks in September I was able to reinvest several dollars per week as many stocks pay dividends in that month. In October I am making just one or two purchases per week, but this allows some cash to build and make larger purchases of stocks across the portfolio keeping everything balanced.

When I began in January I received just 1 cent in dividends. Today I am expecting to receive just over $9 between now and January, my first anniversary of opening the account.

I plan on using this strategy until my monthly dividend payments grow to over $13 per month, in effect adding an extra weeks cash input. When this happens I will just allow the portfolio to grow at its own pace with M1 making the investment decisions for me. That may take another two or three years but dividend investing is all about slow and steady.

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