Rahul Pandey

Stay away from finance content creators

July 04, 2022 | 4 Minute Read

During the pandemic, I got interested into personal finance and watched a lot of youtubers, Instagrammers and videos, read a lot of blogs, read a lot of books as well. A lot of them. So much that I researched on stupid things like which is the best day to invest in mutual funds. And sadly, I did find content on it giving out serious advice. Incredulous!

Here are my observation about them. (I realise that stock investment is a part of it and by nature, it can get wrong or speculative. Discounting this, I am saying the following.)

  • A good number of them have no idea what they are talking about.
  • Majority of their content is okay/good but the minority that is not good can be damaging for your wealth.
  • There isn’t much to create for personal finance, so they move to stocks. And like a lab rat you don’t realise when you moved from low-risk instruments to high risk instruments. When you moved from investing in mutual funds to investing in shares to investing in crypto to investing in dogecoin to YOLO-ing in NFTs.
  • Clickbait title and clickbait content are more important than actual value that they provide.
  • Many of them are offering advice that would be wrong for most people as financial advice has to be on a per person basis in those cases.
  • They will recommend stocks to common people like you and me. Buying stocks is a serious thing. Not for everyone. Even full-time investment bankers can’t beat the market!
  • Many don’t reveal their returns.
  • Many even fake their returns.
  • They will recommend risky or inefficient financial instruments.
  • Many of them will not even put disclaimer when they do paid videos. Only a tiny standard youtube banner that can easily be missed by us. Nothing on Instagram.
  • A lot of what they say is just for the sake of it, for views, to make content and not for your learning
  • Understand that their goal is to create content and not to educate you. To market themselves so that they can sell to you.
  • There are a few good content creators but they are rare so it’s better to not watch any of them. NO! your fav one is not in my good list.
  • They will suggest mutual funds. Without disclosing how much of their investment is in it. The recommendation could have been made by looking at Value Research or Money Control or Morning Star. Or even paid by MF company.

What is more trustworthy?

“Buy Acme mutual fund, because it has given maximum alpha with minimum risk.”

Or “Buy Acme mutual fund because it has given maximum alpha with minimum risk. And I have 30% of my portfolio on it.”

  • Unless someone tells you how much of their net worth/investment is in that financial instrument don’t even listen to them. Having significant percentage also doesn’t mean a lot as they could sell it in the near future term while you are still invested.
  • As Influencers come off as experts in their domain, they shouldn’t advertise products from their domain. I see it as a conflict of interest.

Read books. Read one book on personal finance every year. That’s it. Start with:

  • Let’s talk money by Monika Halan - gives you a blueprint of personal finance management in Indian context.
  • Psychology of money by Morgan Housel- helps you define your relationship with money. The wisdom is so timeless that at first I thought it’s few decades old book. But it was released in the pandemic.
  • I will teach you to be rich by Ramit Sethi is a good book but it’s in American context so you may have to spend some time to understand it from an Indian context.
  • No books from youtubers as most likely it won’t be as good as a writer.

  • If you are gonna do stocks then make sure you understand that you might not be able to beat the market.

Personal finance is a solved problem for most of us and it’s not difficult. Read books and you should be okay. If you are top 1% of India in terms of income then hire a fee only finance advisor and come up with your financial roadmap. I have never hired a fee only financial advisor so I can’t tell what to expect from them. You can try asking on /r/IndiaInvestments or /r/UKPersonalFinance sub reddit.

Characteristics of a good personal finance content creator:

  • educates you
  • stays away from speculative recommendations
  • discloses how much money (value and percentage) they have invested in the instrument that they are talking about.
  • What else did I miss?

I won’t make money from giving out my gyan on this, yet whatever I say, I say only if I am personally doing it/invested in it. (Have my skin in the game.)

Related: I have written about the conflict of interest influencers have in a separate post.

I am not a financial advisor so whatever I say is not investment/financial advice. Please see a financial advisor for yourself.

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