As every day passes, there seems to come another online broker that has a slight twist on the traditional way of investing money. First came Charles Schwab, who brought no-fee ETF trading to the world. Then came firms like Betterment, who automate investing for you. Now comes Motif Investing, who allows you to create your own basket of stocks (or motifs) for a low price.
From the first time I heard of Motif Investing, I was intrigued at what they offered. So I dug around and got the inside scoop on what makes them unique. This is my detailed review of their service – both the good and the bad – so you can see if they are a fit for your investment goals. If they are, great, there is a link where you can sign up at the end of this post. If they are not for you, that is OK too. You can jump over to my broker comparison chart to find a better match. With that said, let’s learn some more about Motif Investing.
My Motif Investing Review
Motif Investing Background and History
Motif Investing started back in 2010 because two people wanted a lower cost way to turn their ideas into investments. Today, they are a serious player in the investing world and have even been named to CNBC’s Disruptor 50 list. You can read all about the mission of Motif here.
Now, before we move on, we need to address the elephant in the room, what is a motif anyways? Basically a motif is a basket of stocks that when combined, create a motif. You can either choose a pre-made motif or create your own. This video gives a nice rundown on the service.
Motif Investing Features
OK, now on to the features that makes Motif Investing so great for investors. I’ll highlight these in bullet points and then go into more detail:
- $9.95 trades. You invest in any motif for a flat fee of $9.95.
- Thousands of motifs to choose from. There are thousands of motifs that have already been created for you to invest in. Simply browse through the site and find the one that fits your goals and objectives.
- Create your own motif. Maybe you are very picky in what you are looking for. In this case, you can create your own motif. Just pick the underlying investments and you are all set.
- Diversification. Because you are buying into 30 stocks at once, you can get great diversification from the start (unless you only invest in one sector, like banking stocks).
- Easy to use website. There is a lot to be said when you find a website that is easy to navigate and find what you are looking for. I found this to be the case with Motif Investing. I had no issues finding what I was looking for.
- Ability to make extra money. If you create your own motif and others invest in it, you earn a small commission! You can read more about this program here.
Motif Investing Benefits
The overall benefit of Motif Investing is that you can invest in up to 30 stocks at once, for a low price of $9.95. If you were to buy each of the 30 stocks from another discount broker, you would be looking at a cost of over $200!
While that is a great deal, what is just as good of a deal is that you can completely customize your motif to your liking. When I was on the site I was looking for dividend motifs. I did the work ahead of time to know which companies I wanted to invest in. After some time, I realized that there was not a current motif that had the investments I wanted. So I set out to create my own motif. It’s like Burger King, where you get it the way you want it!
Other benefits include:
Low Account Minimum: While the site says there is no minimum, they do tell you to start off with $250. You can’t beat that as a low cost way to get started investing!
Investing DNA Assessment: Not sure where to invest your money? No worries as Motif has a cool assessment survey for you to take that will guide you to make the best investment choices for you. Here is a link to the assessment for you to check out.
Lower Cost Trading: Let’s say you get to a point where you want to add to one position within your motif. It’s easy to do this and the cost for doing so is only $4.95. That is a great deal to trade a stock.
Horizon Motifs: The Horizon Motifs are 9 ETF based motifs that you can invest in for free. While the underlying ETFs do have management fees that you will still pay (you pay this fee if you invest in any ETF anywhere, not just with Motif Investing), this is a great option for investors. It is basically investing in Betterment without the fee that Betterment charges.
No Fees: Other than the commission you pay to invest, there are no other trading fees or account maintenance fees with Motif Investing.
Amazing Customer Service. You can email or call customer service or even watch one of the many explainer videos on their website to understand things better.
Downsides To Motif Investing
There are a few downsides to Motif Investing to list. Luckily, there are just a couple and for many investors are not a deal-breaker.
Account Close Fee: You will find this with many brokerages, so it is not a knock solely against Motif Investing. If you close your account with them you get charged $65 and if you close your IRA with them you are charged $95.
No Dividend Reinvestment Plan: As of this writing there is no automatic dividend reinvestment plan with Motif Investing. When you do get dividends, they will go to your cash account where you can choose to invest at a later time.
Who Is Motif Investing For?
Motif Investing is a great option for pretty much any investor. You have the ability to go the standard route and invest in a motif of great companies for a low price, or you can choose their Horizon Motifs and invest without a fee. Being that you can start investing with just $250 Motif Investing is a viable option for just about every investor.
While die-hard passive index investors will be better served using other services, there is no reason why Motif cannot be a low cost complimentary piece to your investing pie. For me personally, I am investing in a dividend motif just to get started with increasing my dividend income.
If Motif Investing sounds like a fit for you, you can click on this link to sign up. Currently there is a $150 promotion where if you fund your account with $2,000, Motif will give you $150. (The new funds must be deposited into the account within 10 calendar days of creating the account. The total bonus will be based on motif trades made within 45 calendar days of funding as follows: one motif trade will receive $50; three motif trades will receive $75; five motif trades will receive $150. A motif trade is defined as a completed purchase or sale of a motif for the $9.95 commission. Individual stock trades are not included with this promotion.) That’s a 7.5% return on your money just for signing up!
If you don’t have $2,000 to start with, don’t worry as $250 is all you really need. Plus, they are offering new deals all of the time and the link above will always reflect the current deal.
At the end of the day, Motif Investing should be given serious consideration for your investment needs.
Motif Investing Review Summary
- Overall Rating For Motif Investing
Motif Investing is a little different than most of the online brokers out there. If you are looking for a service that allows you to invest in stocks for a low price and be diversified from the start Motif Investing is for you. While they are new to the investing scene, they have a huge following and need to be considered.