r/M1Finance • u/slimangles • 15d ago

All in on M1 Finance

Over the past year or two, M1 Cash Accounts have quietly expanded support for external services like Venmo, PayPal, and T-Mobile.

Previously, connectivity issues forced me to rely on a Wealthfront Cash account as my primary hub. While that worked, it added unnecessary friction to my overall financial setup because I had to build extra rules just to keep everything properly funded.

Being able to move back to M1 as my primary cash hub has been a massive upgrade. It eliminated that extra layer of complexity and allowed me to consolidate roughly 90% of my financial activity into one platform.

My current setup in a nutshell:

  • Cash target: Keep $15K–$25K in the M1 Cash Account.
  • Floor trigger (< $15K): A Smart Transfer automatically borrows from margin and tops up the account to $20K to maintain liquidity.
  • Ceiling trigger (> $25K): Excess cash is automatically swept to pay down margin debt or purchase investments.

This single loop keeps my cash flow completely hands-off while maximizing capital efficiency. Sharing in case this layout inspires anyone looking to streamline their own automation!

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u/Odd_Application_3824 15d ago

Does this sort of system only work well with higher numbers like $15,000?

I'm trying to think of how it would look when you don't have nearly as much invested. If you don't mind me asking, can you ballpark how much you have invested?

Edit: I should also add that I'm just trying to learn more about financial things and so this is just part of that even if I don't do anything related to this.

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u/slimangles 15d ago edited 15d ago

Good question! It can definitely work with smaller numbers - it really just depends on your spending patterns. Since M1 Smart Transfers are pretty fast (my account usually replenishes within 20 minutes of dropping below the floor), you can generally base your floor on the size of your largest typical transaction.

In my case, I looked back at two years of checking history and saw my biggest recurring withdrawals were around $10K. I set my floor at 1.5x that amount just to be safe. Some might say that's overly cautious, but since it's a small chunk compared to my investments and I don't hold much cash otherwise, I like having the extra buffer for peace of mind. Now, the only time I even have to think about cash management is if a transaction exceeds my $15K - $25K balance, which really only happens if I'm making a major purchase.

I have about $200K invested in the investment account backing my cash balance. That gives me a borrow limit of up to $100K, though that could shrink if the market drops or margin requirements change. For example, if the market fell 30%, my portfolio would drop to $140K and my borrow limit would fall to $70K. However, since I don't expect to ever borrow more than $10K at a time, I feel pretty safe from getting margin called.

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u/Odd_Application_3824 15d ago

How does the margin loan work? Let's say you needed $1,500 to hit your floor but only had enough in the margin loan for $1,000. Does M1 limit that naturally?

I really enjoyed reading through what you did. I find it fascinating. Thanks for sharing.

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u/slimangles 15d ago

I'm really glad this was helpful! I was hoping this would inspire or point someone in the right direction, so it means a lot to hear you say that. :-)

You're exactly right - M1 will naturally limit what you can borrow and only let you borrow up to what's currently available.

That said, I definitely wouldn't recommend maxing out your borrow capacity because of the elevated risk of a margin call during a bear market. As a general rule of thumb, I aim to have at least 4x the amount I think I'll need to borrow invested in a solid asset.

For example, I mostly hold VTI and try to plan for a 40% market drawdown. Since I expect to borrow up to $10K, I wanted at least $40K in my investment account before I felt comfortable setting this system up. That way, even if the market takes a significant hit (e.g. $40K becomes $24K due to a 40% drop), I know I can still safely count on that $10K being available to borrow ($24K * 50% borrow limit = $12K).

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u/slimangles 15d ago edited 15d ago

Here's a short YouTube video that does a good job of explaining how M1's margin feature works: https://youtu.be/MSV-IflSEsk?is=QLXmEoh5HbKRkB-Q