Are personal finance influencers really helping you or just after your money? We’ll find out, but first, our disclosure:
Disclosure: This post may contain affiliate links, meaning we earn a commission on purchases made through those links at no extra cost to you. As an Amazon Associate, I earn from qualifying purchases.
Disclaimer: The content on this site is for informational and educational purposes only and does not constitute financial, investment, legal, tax, or any other professional advice and should not be used as a substitute for professional advice. For more details, read our full Disclaimer.
What Are Personal Finance Influencers?
Personal finance influencers, also known as “finfluencers,” use social media and other online platforms to share insights and advice about personal finance, investing, and other money-related topics. They are content creators who have built large followings on platforms like YouTube, Facebook, and TikTok, with many having blogs and podcasts.
With the rise of social media, more people than ever are turning to finfluencers for financial advice. For many people, personal finance influencers have become their go-to source of information on money, investing, and real estate. As a result, these online influencers directly impact how millions of people manage their money. Unfortunately, not all of them are legit.
When money is involved, there are always shady characters looking to make a quick buck. There are also those influencers who have no clue giving out downright dangerous money advice. That is why it is crucial to discern between the good personal finance influencers and the terrible ones.
In this post, I aim to equip you with the knowledge to safeguard yourself and your money from untrustworthy personal finance influencers. I’ll give you tips on how to spot dishonest influencers and those who lack experience or expertise. So, keep reading as we explore the wild, wild west of personal finance.
Stick around to the end, where I share a few of my favorite personal finance influencers.
The Financial Wild West!
I enjoy keeping up to date on the advice shared by the top personalities in the world of personal finance. It’s like keeping up with the Kardashians but with YouTube influencers who focus on personal finance.
It all started innocently enough—one video here, another there. But then the YouTube algorithm took over, and now I can’t escape the endless stream of personal finance influencers. It’s like a train wreck—you can’t look away!
After binging endless hours of content, I can tell you there are some real top-notch personal finance influencers out there, but boy, oh boy, there are also a bunch of sketchy ones.
For every money guru with solid advice, there’s someone else pushing risky money moves. For every personal finance influencer who genuinely cares about their audience, there’s a sleazy hustler trying to sell questionable investment products or courses. The trouble is that it can be challenging to separate trustworthy personal finance influencers from bad ones.
The top content creators in this arena are marketing wizards. They excel at creating engaging content, and much like a wolf in sheep’s clothing, they can make lousy advice look good. Before you realize it, you’re investing in a program that promises easy riches, but the only outcome is a diminished bank account.
So, the question is, how do you distinguish good personal finance influencers from bad ones?
It’s All About The Money
Before we address the red flags to watch for when choosing who to follow online for financial advice, we need to address the elephant in the room: MONEY!
Everything boils down to money.
Content creators must make money to continue delivering valuable content to their audience. Creating high-quality online content isn’t much different from running a newspaper or producing a TV show.
Traditional media outlets, like newspapers, magazines, and TV, have long relied on advertisements, endorsements, and subscriptions to sustain their businesses. None of this has changed; it has simply shifted to the online space, where the audience resides.
Like traditional media outlets, personal finance influencers make money by promoting and selling products, services, and advertisements. There is nothing wrong with this approach. The difference lies in their intentions.
The best personal finance influencers focus on providing honest and trustworthy information that brings value to their followers. The last thing they want to do is break that trust, so they are selective about the products and services they endorse. They put the interests of their followers first and the money second.
Bad personal finance influencers exploit their followers for financial gain. They use their platform mainly to generate leads to sell products and investment opportunities. The worst influencers lack expertise and experience in the topics they cover, which can lead to followers losing money from both the questionable products they sell and the poor financial advice they provide.
How To Spot Bad Personal Finance Influencers
So, let’s review the warning signs of a horrible personal finance influencer. These are some of the most significant warning signs you need to be aware of.
Warning Sign #1: All Flash, No Cash
If an influencer’s video features an expensive car, I’m out. The same goes for boats, private jets, or luxury real estate. When personal finance influencers flaunt these things, you can bet they’re just renting them or trespassing!
No credible personal finance influencer will post videos on YouTube flaunting their expensive cars. The ones that do are not interested in providing their followers with good money advice. Instead, they are likely exploiting their followers’ lack of financial literacy to score a quick buck.
Flashy finfluencers see it as a numbers game. They can spend about $1,000 to rent a Lamborghini or a private jet to make a video. YouTube pays around $10-$30 for every 1,000 views. If their video gets 100,000 views, they could earn $1,000 to $3,000. Any additional views on top of that are pure profit.
Even better, these deceptive influencers can stand outside someone’s house or by a random car for free and pretend it’s theirs. If you see a video of someone standing next to an expensive vehicle on a city street, odds are they do not own it and do not know who does. They are opportunists, recording a quick video to make money.
As Morgan Housel said in one of my all-time favorite books, “The Psychology of Money“: “But the truth is that wealth is what you don’t see. Wealth is the nice cars not purchased.”
So don’t be fooled by the shiny objects. Save your time and skip these types of personal finance videos.
Warning Sign #2: Promise Fast Riches, So Long As You Buy Their Course
We have all seen the videos. A finfluencer proclaims that raking in thousands each month is as easy as pie. They found the secret and are generous enough to share it with you. All it takes is for you to shell out hundreds, if not thousands, of dollars for their course, and voila! You’ll soon be swimming in cash.
What happens if you take their course and it does not work? They will say you did it wrong or need to spend more money on another one of their courses.
These personal finance influencers are exploiting those most needing financial help to line their pockets.
Think about it this way: If you stumbled upon the “secret” to effortlessly make six figures or more each year, would you hop on YouTube and start selling a course to share your magic formula with the world? Nope, not a chance!
You wouldn’t need the cash from peddling courses because you’re already making major dough. Moreover, there is no way you would want to invite competition by sharing your secret. You would lose market share and money.
To be clear, not every personal finance influencer who offers a course is promoting a get-rich-quick scheme. Some credible influencers provide affordable, high-quality courses genuinely aimed at helping people with their finances. The challenge is determining which ones are legit.
Before you spend money on an influencer’s course, take a moment to think about what they are offering. If it is too good to be true, it probably is. In that case, you might be better off putting that money towards getting personalized advice from a finance professional.
Warning Sign #3: Stock Picks and Predicting the Future
The next big warning sign is a personal finance influencer claiming to have found a way to predict stock prices with the promise of easy money. Unscrupulous influencers love get-rich-quick schemes!
They will have these fancy charts and technical analyses. They will use terms like resistance line or double top. It’s all jargon. It was all concocted by humans to give us a sense of control over the uncontrollable.
They will make it seem simple: all you have to do is buy low and sell high. That’s called timing the market. It sounds simple, but it is one of the hardest things to execute. It is like watching a gymnast perform a triple backflip and saying that looks easy; I can do that, only to go out and fall flat on your face.
Timing the market requires the ability to predict the future. I hate to break it to you, but not a single person can do that. No one can predict the future, and no one knows with any certainty where a security or the markets are going. Run from anyone who claims otherwise.
As Burton Malkiel claimed in his remarkable book, A Random Walk Down Wall Street, “a blindfolded monkey throwing darts at a newspaper’s financial pages could select a portfolio that would do just as well as one carefully selected by experts.”
Warning Sign #4: Promotes Risky And Complicated Investments
Day trading, penny stocks, options, cryptocurrencies, and forex trading are among the risky financial strategies influencers promote. While educational videos on these subjects can serve a purpose, it becomes problematic when personal finance influencers promote them as easy ways to make money.
Risky investment strategies do not offer an easy path to money. They lead to speculation, which is another word for gambling. In gambling, the odds favor the house.
To make matters worse, many of these strategies require leverage, aka debt. I am not saying that all debt is bad; how many people can afford to buy a house in cash? However, using leverage for day or options trading is flat-out financially dangerous.
For instance, if you do a Google search on the success rate of day traders, you’ll find that, on average, only 10% of day traders are profitable, and this number decreases to 1% over five years.
So, watch out for those personal finance influencers who claim it’s a piece of cake to strike it rich with risky investment strategies. There’s no such thing as a free lunch, and with the risk involved, it’s more like an expensive 5-course meal!
Warning Sign #5: Lack Of Experience Or Expertise
Be wary of personal finance influencers who lack experience or expertise. Their information can be short-sighted or flat-out wrong, costing you a lot of money. These influencers, unintentionally or intentionally, gloss over the dangers of what they are promoting to their followers.
Nowadays, countless personal finance influencers are singing the praises of real estate investing as the ultimate moneymaker. If you’re not out there flipping houses or buying up rental properties, they’ll kindly let you know just how much of a “loser” you are. However, many of these influencers may have been too young to experience firsthand the real estate market crash during the Great Recession.
These inexperienced influencers promote using leverage (debt) with little money down to buy properties. Many will justify this approach by claiming there is no such thing as negative equity in real estate. They’re wrong!
This approach might work during a good economy and strong housing market but not so well when a recession hits. As unemployment rises, fewer people buy, driving down the housing market and rental rates. That’s when the banks come calling for their money. In the end, these real estate influencers could see their empires come crashing down because they were built on a foundation of borrowed paper.
Another more recent example is the crypto crash of 2022. It was as if the crypto crash was the first economic bubble many of these personal finance influencers experienced. They hyped cryptocurrencies like Bitcoin and FTX to their followers, but many lost money when the price of Bitcoin plummeted.
As Warren Buffet said: “Only when the tide goes out do you discover who’s been swimming naked.”
Protecting Yourself From Bad Personal Finance Influencers
By now, you might be wondering how to protect yourself from bad personal finance influencers. Here are a few ways.
Always Be Learning
The key to protecting yourself is through education. Never stop learning, whether you work with a professional or not. Equipping yourself with knowledge is one of the best ways to safeguard your money.
I make it a point to read at least one book on personal finance every month, exposing myself to various topics and opinions. I take a broad approach to the topics that I read. One month, I might read about the history of money, and the next month, I might read a book on how our brains impact our investing decisions.
The point is that knowledge is power. Always be learning; your future self and finances will thank you.
Diversification
Investing has a competitive edge driven by the fear of missing out on the latest trend or hottest stock. This competitiveness and FOMO can be hard to resist. Therefore, you may eventually feel the urge to make a risky investment with your money. So, how do you deal with this urge? The first step is to maintain a diversified investment portfolio.
Having a variety of investments is important. It helps lower the risk of losing a lot of money if one of your investments goes bust. For example, when cryptocurrencies crashed recently, many people lost a ton of money because they had too much invested in them. The same thing happened with Enron – people who had only invested in Enron lost everything when it collapsed. So, spreading your money across different investments is a smart way to protect your finances.
Freedom to Play
Another idea is to allow yourself some money to play with. This “play money” is real money, but money you can afford to lose. It’s a small sum of money that lets you indulge your risk-taking side without jeopardizing your long-term financial health. Some people set aside an amount of play money based on a percentage of their portfolio or treat it like a hobby they budget for yearly.
If you decide to take this path, I suggest keeping your play money in a separate account to avoid temptation or mixing it with other funds. You should also monitor the performance of your play account. If, by some stroke of luck, your risky investments bring in significant returns, you may need to consider rebalancing to reduce the risk.
Pros Of Personal Finance Influencers
If you have made it this far, you might think all money influencers are bad. But that’s not true!
One of the main pros of money influencers is the easy access to information surrounding money. Many people feel intimidated by money, and this fear may prevent them from seeking professional advice. By better understanding money and investing, people may feel empowered to take control of their finances and feel more at ease seeking professional help.
However, remember that no matter who you get your information from online, the advice they share is not personalized. Even if a personal finance influencer is a professional, their advice is not tailored to any specific person. It is broad and generalized.
Be cautious with online advice, as it may not apply to your situation. Each person’s background, goals, and personalities are unique. That’s why personal finance is called “personal finance” instead of “one-size-fits-all finance.”
Best Personal Finance Influencers
Not all personal finance influencers are shady content creators selling get-rich-quick schemes to make a quick dollar.
Many personal finance influencers genuinely want to help their followers. A lot of them even have the expertise and experience to back up their claims.
Here are a few of my favorite personal finance influencers.
Clark Howard
Clark Howard is a consumer advocate and possibly the most genuine personal finance influencer you can listen to. He provides practical advice in a concise 30 minutes each weekday. Covering a wide range of money topics, from saving on travel and shopping to investing and everything in between, Clark Howard offers valuable insights for everyone.
The Money Guy Show
Next in line is “The Money Guy Show.” It offers a well-rounded approach to personal finance from hosts who bring experience and expertise. Brian and Bo have many letters after their names, such as CPA, CFA, and CFP. So, you are hearing opinions on personal finance from actual personal finance professionals.
The Plain Bagel
“The Plain Bagel” is a YouTube channel run by Richard Coffin. Richard is a Chartered Financial Analyst (CFA) and a Certified Financial Planner (CFP). Like “The Money Guy Show,” Richard Coffin offers a well-rounded approach and brings expertise and experience. You won’t find hype and get-rich-quick schemes here. Instead, Richard Coffin focuses on providing clear, unbiased information on investing and personal finance.
The Ramsey Show
Dave Ramsey is a popular but polarizing figure. Some may find parts of his approach extreme. I know I do, but I believe it is important to challenge your views and opinions. Even if you don’t agree with everything Dave Ramsey says on “The Ramsey Show,” you can still learn from his advice on dealing with debt and avoid making the same mistakes as his callers.
Check out my ultimate guide to Dave Ramsey’s method for an in-depth look at his approach.
I Will Teach You To Be Rich
In contrast to Dave Ramsey, Ramit Sethi takes a different approach on his YouTube channel “I Will Teach You To Be Rich.” While Ramsey offers a strict 7-step plan for getting out of debt and building wealth, Sethi takes a more free-flowing approach to personal finance. Ramit Sethi discourages budgeting and encourages his followers to save and spend money through his Conscious Spending Plan (CSP). This plan involves allocating your money into three buckets based on percentages of monthly income.
Conclusion: Do Personal Finance Influencers Offer Good Advice?
The rise of personal finance influencers has had a big impact on how people manage their money. The hard part is trying to separate the good from the bad. While many influencers provide valuable insights into money, others offer questionable advice.
You can protect yourself by staying informed and learning the warning signs of bad personal finance influencers. The worst ones use a sense of urgency and the promise of easy money. Remember that the best influencers provide honest and valuable information. They will not put financial gain over their followers’ trust.
Always take the advice of personal finance influencers with a grain of salt. Never lose sight that it is your money. These financial influencers do not know you and your goals. So, do your due diligence before following anyone’s money advice. Remember, a good dose of skepticism goes a long way.
