Why These Gen Z and Millennial Influencers Are Going to Retire Early
Written by
Yaël Bizouati-Kennedy
Edited by
Cory Dudak
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The creator economy is valued at $250 billion, according to a story by The Washington Post. And while not all influencers get rich, some become extremely successful and can amass wealth in a relatively short time.
So, what are these Gen Z and millennial influencers doing correctly to be able to retire early?
Establish a Business
Tachat Igityan, CFO and founder of destream, a financial platform for content creators, said that behind every successful influencer, there’s always a business idea. This means the first step is to turn content creation into a business.
“After that, it’s essential to build products around your brand. For example, influencers usually move into producing or consulting other creators, nurturing them through their channels. There are many ways to develop a business idea, all of which intersect finance, creativity, and audience,” he added.
Diversify
Igityan also noted that an influencer should always set aside a percentage of their earnings and invest it in either developing other creators or growing their own business. “Big influencers sometimes consider a bold move like securing a large contract as a brand ambassador, then end their career and successfully invest those funds, diversifying their portfolio,” he added.
According to Igityan, in general, there is nothing new or different from the approach of anyone else who wants to be financially independent and generate passive income. “For example, partnering with financial services, funds, or trading companies can slightly simplify this path for a creator compared to the average person,” he added.
Grow Their Income
Increasing their income through effective monetization of their audience is a key factor allowing for Gen Z and Millennial influencers planning to retire early, according to some experts.
“Many people struggle to build wealth simply because their income isn’t high enough, so most of it goes towards expenses. This of course is not an issue for successful influencers,” said Brandon Galici, CFP, Galici Financial.
He also noted that successful influencers have been able to capitalize on their personal brands through a variety of methods: brand deals, sponsorships, exclusive paid memberships and other direct-to-fan monetization strategies have allowed them to leverage their audiences to build successful businesses.
“By creating diversified income streams from their content and audience, they can rapidly accumulate wealth at a young age if they manage their cash flow effectively,” he said.
Investing
Yet, as Galici discussed, simply earning a high income is not enough for early retirement, and they must convert their income into wealth through investments, both in themselves/their business and traditional growth assets.
“For example, influencers can take advantage of a solo 401(k) (pre-tax or Roth) if they run their business with no employees,” he said, noting that this could allow them to save on taxes today, or allow a significant amount of money to grow tax-free for their retirement. “Regardless of which tax-saving option they choose, they will be able to select investments to create a diversified portfolio designed to build wealth over the long term,” he added.
Ultimately, he said, successful influencers have adopted an entrepreneurial mindset, strategically monetizing their popularity while being intentional with their earnings so that they can build long-term wealth.
And eventually, they can adopt the same philosophy as TikTok influencer Katherine Saras, who recently posted a video with the caption: “When someone tries to tell me social media is not a ‘real job’ but 1 TikTok can pay my entire rent.”
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