Best Trading Platform USA – Start Investing in Stocks

Are you finally taking the dive into the stock market, and looking for the best trading platform (USA)? Hallelujah! Welcome to the world of stock investing! Today we’ll break down:

  • Why you should invest in the stock market in the first place
  • How to choose the best trading platform (USA) and how to get started
  • My M1 Finance review – trading platform top pick and quick reviews of 6 other top US trading platforms
    • For this week M1 is giving out $30 if you use my link too if you fund $1000+ into your account

By the way, if you’re looking for the best Trading Platform in Canada, I got you covered right here.

Should you invest in the stock market?

In a word, YES.

Having money in the stock market is a MUST for your financial future. Yes, I love my real estate, but having all your money tied up in properties can leave you in a pickle if you have even one unexpected expense. So if you’re growing your portfolio, having liquid money in stocks and bonds is mandatory. Here’s why:

  • It’s easy to get started. When most people think of investing in the stock market they think they have to connect with one of those crazies on Wall Street. No So! These days being a stock investor is super easy! 
  • There’s basically no maintenance (if you do it right.) Today’s platforms are so smart that you can “set it and forget it” and it will execute all your decisions for you. 
  • Everyone needs liquidity. If you have a surprise expense and no way to pay for it – selling stocks and bonds is a lot easier than selling real estate. 
  • It’s lucrative. Your money grows a lot with minimal effort from you. Really, compared to real estate, investing in stocks gives you 80% of the benefits with only 10% of the effort. 
  • It’s easy to strike the right balance. Ideally, you have a balance of stocks and bonds. Both are easy to buy, sell, and maintain. 

If it’s so great, why doesn’t everyone invest in the stock market? 

Well. The thing that holds people up is that they overcomplicate things. Seriously. 

For most people, as soon as they think the words “trading stocks” they think of a bunch of numbers, letters, and arrows floating across a TV screen; they think of conflicting advice of what to buy and when; and they think of angry guys in suits yelling into phones. 

They also think of the endless choices. Where to invest? How much to invest? What to invest in? When to buy? When to sell? Bleh. Who likes that?

So that’s what we’ll be sorting out right here, right now. 

How to invest in the stock market – Step 1. 

The truth is that it’s easy. And the very very first step is to sign up and get familiar with a trading platform

How to choose a trading platform:

  • Zero-fee ETF trades. I love ETFs and I hate fees. So this is a no-brainer. 
  • Low monthly fees. Sometimes your bank will offer “an investing account” with some crazy fees that they call “low”. Don’t fall for it, there are tons of great trading platforms that don’t cost much. 
  • Smart automation. Back in the day, the only automation you could get out of your bank was regular transfers between accounts. But don’t settle for the bare minimum. These days there’s so much more! 
  • Stellar support and a good app. Because I’m spoiled. 

Also, a lot of platforms offer the features below, but I don’t much care about them::

  • Fractional trading – meaning you can buy a fraction of a stock. I’m not looking to buy $20 of Apple, so I’ll leave the fractional trades for the kids. 
  • Lots of stock options – this is irrelevant to me because they’re not part of my strategy – index investing. (Read more about why I’m obsessed with index funds.) 

Best trading platform (USA) to start investing in stocks

Okay, so I did some research, and I don’t even want to draw this out. There’s one clear winner. 

The winner: M1 Finance

M1 Finance is a trading platform that was basically made for me. (And for you, if you like saving money and time.) Why is it the best trading platform? There are 2 main reasons I’m obsessed with it:

1 – Free ETF trades 

Always pay attention to the “small fees!” Most trading platforms charge a 0.25% – 0.5% fee. Usually more. These can really add up. If you have $1M invested, that’s $2500-$5000/year you’re forking over! I don’t care how rich you are, everyone can use a couple extra grand in the bank. 

With M1 Finance, you can get free ETF trades (or any stocks, actually.) Pure FIREescape heaven. 

2 – Automation

There are 2 levels of automation and they both make me salivate in how much they simplify my life. 

The first level is that M1 finance automatically deposits money into the account and allocates it to stocks based on your preset percentages. They call these allocations “pies” because it gives you a little pie chart. No need to log in and do it yourself. 

M1 Finance pie

Actually, if you’re lazy (or indecisive) you can just follow a recommended pie from someone else.

The next level is only available with the M1+ account that gives you MEGA automation with “smart account transfers”. The M1+ account is $125/yr and is totally optional, but this feature (along with some other ones) practically made me wet my pants! 

You can set up rules for your accounts! 

For example, Let’s say I always need at least $3K in my checking account. M1 will only withdraw whatever’s in excess and use that for your investments. (So say, this month I have $10K in my account, it will invest $7K, but if I had $3200 last month it will only invest $200.) 

This is ideal for me as a real estate investor, because I always have money coming in and out for random bills, but I don’t want to accidentally have a bunch of automated withdrawals right before a mortgage payment. 

That actually happened to me once – I forgot about a check I wrote, and inadvertently didn’t have quite enough for an automated mortgage payment. The only thing more painful than the hefty fee was the shame. Never again! 

Other awesome stuff from M1 Finance

They have a sweet app. Seriously I love it. If I can’t do all my finance things on my phone, why even bother? 

Low-fee line of credit. It’s 3.5% interest (and 2% with the M1+ account.) Honestly, having a line of credit can be a lifeline when you’re moving too much money around at the same time. 

Fractional shares. This means you can buy a fraction of a stock. Not a huge selling features for me, but still a feature. 

Free stock purchases forever.  Oh yeah, there’s also that! 

And if you upgrade to the M1+ Account you get:

  • High-interest checking – honestly, no one offers that anymore. If your money is just sitting in the account, the fact that you’re getting something for it is a nice touch. 
  • 2% line of credit – Honestly, you’re crazy NOT TO use it. 
  • Debit card with 1% cashback – I’ve never even heard of this for a debit card! They also have No international fees and free ATM withdrawals. 
  • Kids investing account – Way to pull at my heartstrings M1. 

The M1+ account is $125/year and is totally worth it. 

Okay. So, M1 Finance is the winner. Hands down. 

But I like to offer a one-stop-shop for all your trading platforms research, so here you go! 

Honorable mention: WealthFront 

Wealthfront is a lot like M1 – you can’t buy stocks, but you buy a “portfolio” instead. Kind of like a mutual fund. It has:

  • Smart transfers
  • Debit cards.
  • And checking accounts too. 

The downside is that it has 0.25% robo-investor fees. This is annoying, but it’s still better than the rest of the automated industry. (Except, M1, of course!) 

The upside is that they offer automated tax loss harvesting. I can’t imagine it saves that much, so it’s not my winner. 

Lightning Round – most popular trading platforms pros and cons

Here’s a list of popular trading platforms and their pros and cons. 

Ally Invest.

Similar to M1 Finance but there are no money automation options AND they have a 0.3%  managed account to let you swap back to if you change your mind. 

WealthSimple. 

The fees are too high at 0.4%. It’s a bad version of Ally Invest

Betterment. 

It’s a lot like WealthFront but it doesn’t have super-automation. But it DOES HAVE this neat feature: upgrading your account from the 0.25%/yr fee to a 0.4% one gives you access to a CPA whenever you like. I’ve never had to talk to a CPA but if you do… It’s expensive. Like hundreds of dollars per call. This might be a a nice feature, but is it really worth the 0.15% upgrade? If you invest $1M, that’s still $1500 you’re paying. I think I’ll just pay for the call. 

Stash. 

It has a “cashback” card that buys stocks instead. The fees are pretty low, so yay! BUT when there’s a no cost option, why bother? 

E-trade, Schwab, RobinHood. 

These accounts offer free trades. Woohoo. But that’s about it. The other accounts have so much more. 

Your bank.

Most banks offer an investment account, They suck though. They know they’re convenient and they’ll take advantage by gouging you with fees and pointless terms. Stay away! 

So now I have a trading account? What’s next?

Once you have an account and fund it, start investing! 

Start by reading the investing basics and play around with your new account. Congratulations, investor! 

Read more about investing:
Simple Investing for beginners: From beginner to investor in 15 minutes
Beat the stock market with indexes?! Simple strategic asset allocation
Investing Made VERY Easy: 7 Reasons Robo Advisor Performance is Great for the Cost

TL;DR – best trading platform USA

If you’re going to start investing, I recommend M1 Finance

  • I hate fees and love that they have FREE ETF investing and no annual fees
  • Their automation features make my life really easy.
  • If you want, you can upgrade to M1+ which also gives you smart automation, low-fee line of credit, and even high-interest checking account (as well as other cool features!)

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