There’s a fine line between on social media Promotion of financial literacy and give financial advice to people who don’t have enough knowledge to tell if it’s good or not. So fine is that line that someone just looking for information on choosing a suitable mortgage or wanting to know what “short selling” is could end up being told how to make money without working, avoid taxes, or make risky investments. And young people who are still in school or college or are looking for their first job are taken in by the siren songs of easy money and the success life that some “influencers” show them.
During his presentation at the BBVA’s EduFin Summit 2022, Manuel Angel Mendez explains that there are three types of financial content: entertainmentwith fun and useful content; education, which teaches basic ideas and concepts; and investment advice“which too often comes from self-proclaimed experts who aren’t certified and shouldn’t be giving investment advice at all.” Méndez insisted on the importance of knowing the difference, as “It’s one thing to educate yourself and quite another to make financial decisions.“
“Ninety percent of ‘influencer’ content is entertainment wrong expertise,‘ explained the editor-in-chief of Teknautas. “No one will solve your financial problems in a 30-second TikTok video. If you really need financial advice, consult a professional. Or at least choose financial influencers you know are solid.”
Méndez recommended asking yourself several questions to learn to tell the difference.
1. What are their certified qualifications and experience?
Before you follow the investment advice you find on social media, you really need to do something to research backgrounds the counseling person. Méndez spoke about YouTubers with hundreds of thousands of followers who advise people on how to invest in cryptocurrencies (which later crashed) without being specialists in finance but more in digital marketing.
“They’re experts at promoting content, but don’t have any financial certification to back up the advice they’re pouring out,” he said.
2. Do they insist on passive income?
He also said you should be wary of people who insist on ways to earn passive income: the idea that once you’ve made an initial investment, you’ll get consistent and regular returns without a lot of extra work involved. These ideas can range from collecting dividends to affiliate marketing to running websites with referral links.
For Méndez, this insistence on passive income is a “red flag,” especially when coupled with the suggestion that you can drop out of college or quit your job to live on passive income alone.
“No one will solve your financial problems in a 30-second TikTok video.”
3. Do they show a luxurious lifestyle?
It’s common for influencers to flaunt a life of luxury. “If they show you their ‘Lambo’ or their Maserati, that’s a red flag that’s bigger than the car,” joked Méndez.
Get motivated with selfies of the influencer draped over the hood of a high-end vehicle, or enjoy a cocktail at a trendy rooftop bar overlooking the Dubai skyline, or sunbathe on a yacht in Barbados push the audience’s longing buttons: usually “young kids who haven’t finished school or are unemployed but want a piece of that lifestyle.”
4. Is popularity your business model?
Popularity is not always directly proportional to reliability. “In fact, sometimes it’s just the opposite.” An influencer’s motives are in doubt if their business model depends on it advertising Income earned from views of content or on Sale of online courses. “That’s the technique that a lot of them are using now,” Mendez explained. “A year ago they openly gave investment advice, now they offer online courses instead because it’s not subject to a fine from the CNMV, the securities market regulator.”
Sale of tickets for events is also part of their business model. Young people from across the country gather at these gatherings where they are promised “an income that will bring you the lifestyle you see on your phone”.
5. Do they mix toxic messages with their content?
Méndez warned of a kind of “influencer” that combines neutral and useful content Anti-establishment, subversive and toxic messagessuch as describing tax or pension systems as “garbage” or “scams”.
With this dangerous combination of other actually useful content, they attract hundreds of thousands of page views in Spain and Latin America.
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.