Personal Finance YouTuber Explains Why You Shouldn’t Always Trust Money Advice on Social Media
It is no surprise that there are people who are skeptical of influencers, especially in the personal finance sector. Influencers with millions of followers can earn large sums of money via sponsored ads and high viewership numbers.
Consequently, content creators create videos with clickbait titles and controversial thumbnails to generate as many clicks as possible. This practice, driven by the desire for revenue, can bring harm to a viewer, especially if the influencer shares misinformation or encourages viewers to invest in a product that they are being paid to promote.
YouTuber Karson Gaule, a personal finance influencer with over 44,000 followers on the platform, shared her skepticism about the advice given by other big-name influencers. Here are the three primary reasons Gaule thinks we should take everything a popular finance influencer says with a grain of salt.
Also see how much YouTubers make.
Uncertain Predictions
Though there are some YouTubers out there who do their due diligence, one of the biggest concerns that Gaule has is that finance content creators can directly influence what a viewer does with money. Oftentimes, influencers will make stock predictions, encouraging their followers to invest in the stocks they claim will make investors rich.
“Most YouTubers are really great communicators that do a good job convincing their viewers that they know what they’re talking about,” Gaule said in a YouTube video.
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Gaule looked back at three top finance influencers’ stock predictions from 2021. Using the past two years as evidence, Gaule discovered that only one of the YouTubers had a stock prediction that gave a return of 5%, a notable difference from the S&P 500’s return of 3%. The two other YouTubers disastrously suggested stocks that led to minus-53% and minus-68% returns.
Though YouTubers can guide investors in the right direction, it is important not to take every opinion they have as the indisputable truth. Finance influencers have an enormous influence on people’s financial health, and investing in a stock just because it was recommended by a YouTuber can lead to potentially devastating consequences.
Clickbait Titles
YouTubers who have large fan bases will often use clickbait. In YouTube’s current state, clickbait is the most effective way to earn money off videos. Clickbait is especially an issue in the personal finance sphere.
“Whether it’s the economy, the stock market or the real estate market, [they’re] not even close to how hectic and flip-floppy YouTubers make it seem, even during the more extreme financial climate of today,” Gaule said on YouTube.
YouTubers need views and thus will create clicky titles with flashy thumbnails — many make their living off overdramatizing current events. When viewers are getting all of their information in a vacuum, they become driven by fear and turn to the influencer for help. As a result, the influencer becomes their main source of information. This practice allows misinformation to spread rapidly.
Paid Promotions
YouTubers may be driven by greed to promote products that ultimately are not good investments. One example is cryptocurrency advertising. Previously, many YouTubers called crypto a speculative investment and warned viewers of the risks of investing in an uncertain market. But when these same YouTubers started collaborating with crypto companies and making money off brand deals, they instead promoted these investments.
“When promoting these companies to their fans, they knew the risks involved, they knew their fans’ money was not FDIC insured and were OK with their fans taking the risks,” Gaule said in her YouTube video.
Gaule said more content creators have changed their minds regarding risky investments like crypto once the sponsorship money has started rolling in.
Unlike YouTubers, financial news outlets are not as directly influenced by brand deals. Therefore, a news source will have a more objective point of view.
Final Thought
Though there are many YouTubers who provide sound financial advice, there are just as many who are spreading misinformation in order to maximize their profits per video.
It is important for subscribers of these YouTubers to get their news and information from multiple sources, not just their influencer of choice. That way, they can make well-informed decisions about where they invest their money. Though a YouTuber who has millions of viewers may seem like a legitimate source of information, they may not always provide the best financial advice.
