If you keep up with financial happenings, you’ve probably heard about the new online brokerage, Motif Investing. You may have read about it in CNBC’s 50 Disruptor Companies of 2016 with its novel concept of investing in ideas.
So, how exactly do you go about making money with Motif Investing? Here’s a beginner’s guide that walks you through four different ways to make Motif Investing work for you.
Theme-Based Stock Portfolios
The first way to make money with Motif Investing is to actually invest in a motif.
In a nutshell, Motif Investing allows you to invest in a portfolio (or motif) of up to 30 stocks for the low cost of $9.95. This is considered a great deal compared to other online brokerages that charge $4.95 to invest in any individual stock, without the option to group your investments together.
Beyond that, what makes Motif Investing unique is the theme-based stock portfolios. You can choose from an ever-growing variety of professionally built motifs. These motifs are built around insights, ideas, and trends.
For example, one popular professionally built motif is titled “Cyber Security” and offers stocks in companies that are in the business of cyber security such as Juniper Networks, Inc. (NYSE:JNPR) and Proofpoint Inc. (NASDAQ:PFPT). If you are someone who believes that cyber security is an emerging trend and wants to invest in the idea, this motif would be good for you.
As with all investments, you’ll make money as the value of the stocks increase. You can watch your money continue to grow or cash out whenever you’d like for the same flat fee of $9.95.
The second way to make money with Motif Investing is through their fee-free horizons.
Motif Investing offers nine commission-free, professionally built asset allocation models called horizons. They have no management fees and no trade commissions. Consisting mostly of Vanguard and iShares exchange-traded funds (ETFs), these are tailored to your investing timeframe (or horizon) and risk tolerance. You can choose from 1 year, 5 year, and 15 year horizons in three risk levels: low, medium, or high.
In addition to saving money on trade commissions and management fees, you’ll be able to rebalance your horizon portfolio for free as well. Motif horizons are great for self-directed investors who want to put their money to work in a disciplined way. Here is an example of the makeup of the 5-year moderate horizon:
- 32% US Equities
- 23% US Bonds
- 23% International Bonds
- 12% International Equities
- 8% Real Estate
- 2% Commodities
As you can see, this allocation model fits its name: moderate. You have a good mix of equities and bonds, both national and international. US equities just slightly outweigh bonds, giving this horizon a chance to experience decent returns while not being too risky.
Motif Investing has leveraged the same thinking that brokerages use to create retirement target date funds. They then use this to create horizons that suit your more immediate financial goals. It is a good way to make your money work for you in the short-term.
Related: Read our review of Motif Investing
Creator Royalty Program
The third way to make money with Motif Investing is through their Creator Royalty Program.
One of the features of Motif Investing is the social aspect. When you build a custom motif, you have the option to share it with other people. You can connect your account to Facebook to share with your friends or even make the custom-built motif public for all to see.
With the Creator Royalty Program, you can monetize this social aspect of Motif Investing. When you build your custom motif and join the Creator Royalty Program, you’ll receive $1 every time someone purchases or rebalances the motif.
A good start is to invite your friends to Motif Investing as a way to track each other’s investing progress. If you want your motif to look attractive to other prospective individual investors, consider choosing an array of stocks that people are familiar with. Also, create a name for your motif that is easy to understand.
Some of the popular community motifs currently available include:
- Vacation Time – contains stocks in various travel-related companies like Expedia, Southwest Airlines, and Marriott International
- War Against Cancer – contains stocks in various companies that offer pharmaceuticals and technology to treat cancer such as Kite Pharma and Medivation
- Super Tech Stocks – contains stocks in high-profile technology companies like Apple and Tesla Motors
Once you have your bright idea for a custom-built motif, make sure you do your research on each company before investing. Although you are building the motif with the intention for other people to purchase it, you still want to make sure you are investing your money wisely as well.
The last way to make money with Motif Investing is through their Refer-A-Friend program.
Motif Investing offers a $100 referral bonus to both parties whenever a current investor refers a new investor. In fact, you can earn your first $100 by creating your account using this link, then utilize the referral program to invite others you may know and earn even more.
There are two requirements: the new investor must fund the non-IRA account with at least $1,000 and make one trade within ten days of opening the account. The $100 referral will be deposited into both accounts after a 45-day qualification period.
What’s even better is that there is no limit on how many people you can refer. If you’ve started investing with the platform, referring friends should be an easy sell. In addition to explaining how Motif Investing saves you money on stock trade commissions, you can talk about the many other benefits the platform has to offer such as fee-free horizons and the Creator Royalty Program.
You’re not limited to actual friends when it comes to making referrals, either. If you have a website, feel free to publish your referral link. If you are active in relevant forums (whose rules permit), you can post your referral link there as well.
Motif Investing makes it easy for beginner investors to make money. The four options listed above are great ways to get started making money with Motif Investing. Investing in theme-based stock portfolios or fee-free horizons puts your money to work right away. The theme-based stock portfolios give you the freedom to invest in ideas that are important to you while the fee-free horizons give you the option to invest for short-term and intermediate financial goals.
In addition to investing in stock portfolios and horizons, you can make money with Motif Investing through their Creator Royalty Program and their Refer-A-Friend program. Both lend to the social aspect of investing that Motif Investing has been encouraging. Whether you try one or all of these avenues, Motif Investing is worth looking into for making money from your investments.
Have you tried Motif Investing? What do you think about the convenience of theme-based stock portfolios?