Influencers Can Say Anything and They’re Often Wrong
“You can do what you want and make up your own rules. Why be a servant to the law when you can be its master?” - POINT BREAK
written by W. Peter Iliff and directed by Kathryn Bigelow
(3.5-minute read)
There are plenty of Instagram, TikTok, and YouTube videos out there about personal finance. Unfortunately, the most widely viewed topics tend to be about investing. I say unfortunately for many reasons, the main one being that these videos are often from people who do not have any credentials about this subject but, since it’s about making money, people listen.
But if they have millions of views then why is this so bad? It’s like saying “millions of people can’t be wrong!” It’s not that the people watching these videos are wrong, it’s the reason they’ve been drawn into watching these videos that makes it bad.
QUALITY OF THE VIDEO
I was forwarded an Instagram influencer who talks about investing. The person who sent it to me said that the videos are really good and he has such a great voice!
The first thing about the videos that captured this person’s attention was not the subject matter. The production value of the videos are usually spot-on for social media. They’re quick, with good sound and lighting, a nice background, and have the captions in big, legible words. Their hair and make-up look damn good too. As I scrolled through the comments, I noticed that people commented on his nice voice and good looks.
If a video’s quality is good, it doesn’t mean the information is good. They are two different things. Listen to what is being said.
THEY SAY WHAT YOU WANT TO HEAR
If you’re searching for investment content, then chances are you want to hear about becoming wealthy or learn about some type of investment strategy that only the “experts” know. If you can learn about this in under two minutes, even better!
Therefore, these videos will cater to what you want to hear. People want to hear that they can save, earn, or make hundreds of thousands, or even millions, of dollars. If you think you can bypass paying a financial professional, then you’ll watch someone who tells you how to do it yourself. It’s what you want to hear.
It doesn’t have to be correct. This is the main problem with social media influencers. Their content doesn’t have to be accurate. Their content has to be click-able.
Quite often their advice is wrong. It’s unequivocally, objectively, 100% wrong. But you’re not there to hear about those boring restrictions. You’re there for the good stuff! So they give it to you.
NO REGULATIONS MEANS NO REPERCUSSIONS
Since these influencers don’t have the proper credentials, like a CFP®, they have no government regulations. If they have nobody regulating what they say, they can say whatever they want and not get into trouble.
It doesn’t matter that one “Financial Teacher” said you can open multiple Roth IRAs in order to contribute more than the $8,000 maximum per year. No regulator is going to take away his license because he has no license! That piece of advice, by the way, is unequivocally, objectively, 100% wrong. You cannot do that. But that person has over a million followers and doesn’t care.
A person who claims to be a Financial Coach or Teacher doesn’t have the proper credentials. Simply look at their name to find out if they have to abide by certain rules. If they don’t have letters like CFP®, CFA, or CPA, then they haven’t completed the required education, nor have they gone through the additional scrutiny and exams, to be giving regulated advice. There are other respectable certifications than those three, by the way. Do some basic research.
You can actually get yourself into real trouble by following some of these people’s advice. Please seek a real professional, with the proper credentials, before making financial decisions. Many of us are too busy doing the work to make pretty-looking TikTok videos.
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