personal finance influencer red flags

6 Key Signs of a Bad Personal Finance Influencer

Social media platforms are filled with individuals who have millions of followers. These followers follow them so blindly that they even trust them with every matter of their life. Personal finance is a part of the mix, too. So, who are these people eager to solve their followers' financial problems? We prefer to call them personal finance influencers who create content related to financial topics and provide them to their followers. Most of the time, their Knowledge comes at no cost.

So, who are these people who churn out their financial Knowledge for free? Are they financial gurus, or do they work in any financial advisory firm? Well, most of the people we find on social media platforms do not come from any financial background, but they do have Knowledge in their field and like to share their tips and tricks with their followers. These personal finance influencers could be your neighbor or a random person whom you have recently met. In a nutshell, they are just common people who use TikTok, Instagram, Facebook, Youtube, Reddit, etc., as a medium to share Knowledge.

Personal Finance Influencer Red Flags

Since the Internet is flooded with uncountable personal finance influencers, how do you separate the real deal from the desk? If you identify a few red flags, then stop following them.

Avoid "hearing things."

If you hear such terms as "foolproof," "guaranteed," "no-fail," etc., more often, you better stop there and take the time to think. There is no guarantee when it comes to money, so be aware of any influencer who promises you to get rich quickly with less effort. It takes huge effort and time to be a millionaire or billionaire.

Where's the proof?

If someone claims earning $50,000 to $1,00,000 as a side income,  Always ask for proof. If an influencer shows his receipt, it's a big thumbs up for you, or if one fails to do so, he is a red flag.

Knowledge sounds like a sales pitch.

If you feel that the content you are reading or watching is for educational purposes and gives you a  sales vibe, and the influencer pushes you to buy that product, then it's time to be cautious about the content for his gain. 

Prefer to see comments.

It is common to have millions of followers, and they are easily visible, too, but how do you find valuable content for you and not a red flag? Check out the comment section. It will give you a clear idea about the content and its relevancy. 

Never pay:

If any influencer demands money in exchange for his content, then definitely it's a scam.

Rags to riches in a few days:

You can't get rich just by following and doing things he asks. It took a lot of effort and hard work to become a billionaire. Tip: there is only a shortcut to becoming rich if you are lucky enough to hit a jackpot.

Should we take Financial advice from Social media?

Taking social financial advice from social media can be a dicey decision. It's a big no; you should never take financial advice from social media, and many reasons favor this argument.

  1. You need to find out the influencer, his life, and most importantly, his qualifications. Life on social media is not like you see. Most social media influencers don't come from financial backgrounds, and most don't even practice what they advise. Trusting blindly can put you in a sticky situation.
  2. If you think influencers earn by applying what they tell you, you might need clarification. Most of their earnings are commission-based. They earn through ads,  collaborations, etc. 
  3. Their advice is general, and you might need something else. The earnings, expenses, and priorities are different for everyone, and it makes no sense to follow the same advice. 

Since all social media influencers are not fake, the question is, are there any legitimate influencers? Yes.

What is the difference between legitimate personal finance influencers and scam ones?

There are sub-categories of financial content: 

  1. Entertainment - Useful with a fun element
  2. Educational - Make you learn, provides basic ideas, and clarifies concepts
  3. Advisory- Gives investment advice and is uncertified

A reel or a full-length video will never solve your financial problems, so educating yourself enough or hiring one is advisable. If you still want to follow the fiend, these traits are in them. They are worth following.

  1. If an influencer can provide proof of their certified qualifications and relevant experience.
  2. They're on the right track if they don't pressure you into chasing passive income or quitting college or your job.
  3. Real influencers won't flaunt a lavish lifestyle to sway you.
  4. They're not in it for popularity or selling event tickets.
  5. They stick to tested content and avoid giving investment recommendations.
  6. Learning about financial stuff can be beneficial without risking your wealth.
  7. And last but not least, their income is only partially dependent on amassing thousands of users and followers.

Read Also:

How do I Start my own Financial Planning?

05 Oct, 2023


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