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This isn't a sponsored post (I wish). I don't write about credit cards either, but I swear this ties in with several topics I've covered recently.
M1 Finance has been featured on this blog a few times now. They've never paid me; I just love their products. Compared to other modern brokerages like Robinhood & WeBull, M1 is the only option designed not to get you hooked. I've written about Robinhood and how it's closer to TikTik than TD Ameritrade. The app prioritizes user engagement & screen time as all apps do recently. That behavior is bad for your money. M1 Finance trains the behavior out of you. It's a set it, automate it and forget it kind of app. It's refreshing.
But we're not talking about that today. What's new is M1 Finance's new credit card. It offers up to 10% cashback at select companies if you hold them in your portfolio. Your Netflix and Spotify subscriptions can now earn you shares.
10% Eligible Holdings
Meme Stocks - AMC, Gamestop, Ulta Beauty
Streaming - Netflix Spotify
Subscriptions - Peloton, Spotify
Tesla - Tesla
5% Eligible Holdings
Airlines - American Airlines, Delta, Jet Blue, Southwest, United Airlines
Fast Food / Coffee - Chipotle, Dominos, Starbucks
Others - Dollar General, Etsy, FedEx, Nike, UPS
2.5% Eligible Holdings
Amazon - Whole Foods, Twitch, everything AMZN
Food delivery, Utilities (cable, internet, phone), more fast food, and retail.
1.5% Everywhere Else - View full list
I don't use many of the 10% options. But 5% back on flights is enticing. And I hate my phone service provider. 2.5% back on them is not so bad.
A couple of things are driving this. The first is retail investors. I can't imagine a product like this existing without retail participation. It's no coincidence that the top cashback offerings are retail names.
The second is the crypto & web 3.0 movement. Crypto debit and credit cards don't simply let you spend; they automatically invest your cashback in cryptocurrencies like ETH or BTC. Retail investors now have a similar option in traditional finance.
Finally, web3.0 prioritizes ownership. In DeFi: Finance ReImagined For The Internet, I wrote:
The concept of users being owners is absent in CeFi. Robinhood is making strides by attempting to reserve some of its shares for its users. Airbnb also allowed hosts to buy shares during its IPO. But if it were in DeFi, hosts would have been accumulating shares from day one. It's an odd concept, but what if you got some VISA for every swipe or UBER for every ride?
Now you can get some UBER for every ride or order. I know it's not the same – this is rewarding spending instead of activities like non-monetary involvement. Still, it's difficult to imagine us getting here without the cultural shift introduced by the blockchain and web 3.0. The younger generation wants ownership. Products and companies that reciprocate their enthusiasm will get it back tenfold.
The red lines represent five-year aggregates of portfolio contributions over forty years as a percentage of total contributions. The blue bars represent how much of the final portfolio those contributions are responsible for at year forty. It's the same message I've been trying so hard to convey: earlier portfolio contributions account for a majority of your final returns. Start investing as early as you can. Click the link to see more examples and to access the model I used for my calculations. Also, pet pics 🐶🐱