You don’t have to be Sherlock Holmes to see that social media has transformed the way we connect, gather information, and seek advice. Among the many voices that dominate our social feeds, financial influencers (a.k.a. “finfluencers”) have emerged as popular figures, hawking advice about how to manage your money, invest, and achieve financial independence. As teenagers navigating the complexities of personal finance, it’s crucial to approach the advice of self-appointed influencers with a good dose of skepticism. After all, your financial well-being hands in the balance.

1.     Charisma is not expertise.

Financial influencers often have a charismatic online presence, captivating followers with their engaging content. But popularity does not always equate to expertise. While some influencers may have achieved personal success in their financial endeavors, their advice may not be universally applicable or backed by professional qualifications. Remember, financial decisions should be based on sound research, extensive knowledge, and expert guidance.

2.     Follow the money.

Behind the seemingly unbiased advice lies a web of hidden agendas. Many financial influencers get paid to promote products or services, often without explicitly disclosing these affiliations. This creates a conflict of interest, as their recommendations may be driven more by financial gain than genuine concern for your financial well-being. Others will claim that the shortest path to riches is a multi-level-marketing scheme that enriches them when you sign up. Always question the motivations behind their recommendations.

3.     Sometimes, it’s complicated.

To appeal to a wide audience and gain popularity, financial influencers often simplify complex financial concepts. While this may make the information more digestible, it can lead to a distorted understanding of important financial principles. Case in point: if you’d only invested in crypto 5 years ago, you’d be rich! Such a claim is easy to make in retrospect. It’s the future that’s hard to predict.

4.     Everyone’s different.

Each individual’s financial circumstances and goals are unique. However, financial influencers tend to provide general advice that may not be tailored to your specific needs. It is vital to remember that what worked for someone else may not necessarily work for you. Instead of blindly following influencer advice, take the time to understand your personal financial situation, consult professionals, and develop a customized approach to managing your money.

5.     Licenses exist for a reason.

Unlike licensed financial advisors who are bound by professional standards and regulations, financial influencers often operate in a regulatory gray area. This absence of accountability can have serious repercussions for their followers. If you encounter a financial setback after following influencer advice, you may have limited recourse or support. Your best bet? Seeking advice from qualified professionals who are accountable for their recommendations.