Finfluencers on Instagram, FIRE bloggers, Youtube channels about making money online, investing courses for millennials, podcasters who recommend share trading platforms, side hustle coaches, Fintok, the latest mentoring program by xzy personal finance guru, podcasters who recommend share trading platforms … The list of people in the personal finance and investing space who are not only sharing their personal stories but who are also promoting and/or selling a wide range of services, products and digital content is exploding. How do you know who you can actually trust?
My recent article on the increasing (and worrying) commercialisation of the personal finance and FIRE space is probably the most controversial piece of content I’ve published to date. I’ve never received so many angry emails in my life. So I can only conclude that what I wrote struck a nerve.
What I didn’t expect was the overwhelming number of messages from readers who wanted my advice on specific content creators and the stuff they promote and sell. I will not tell anyone what they should or shouldn’t spend their money on. I did list some general tips on how to avoid “get rich quick” schemes at the end of my article, but it seems that there is demand for some more information on this topic.
The tools in this article will hopefully help you ask the right questions and spot finfluencers you shouldn’t trust (and find the ones that deserve your trust and attention).
What is a Finfluencer?
The term “finfluencer” stands for “finance influencer”. Finfluencers are content creators who use social media to share information and advice about anything money-related – from budgeting to investing and making money online. Many finfluencers also cover Financial Independence topics and share their journeys to FIRE. While the most well-known finfluencers use Instagram as their main platform, bloggers, podcasters, YouTubers and other content creators can also be seen as finfluencers in a wider sense as most use social media platforms to promote their content.
It’s actually a really good thing that people of all ages and backgrounds have started talking about money and that investing is no longer a topic that only old white guys in suits understand (or pretend to understand). The barrier for entry when it comes to investing for retirement is now a lot lower and it’s easy to find accessible information about all things finance in plain English, provided by people we can relate to.
But with the good usually comes the bad, and this area is no exception. There are now many people in the personal finance space who are trying to make money by promoting questionable services, influencing others in a way that suits their own agenda and selling over-priced digital products. This is the “get-rich-quick” crowd.
Are All Products Finfluncers Sell or Promote Bad??
There are some fantastic resources, services and products out there that are worth every penny and deserve to be promoted. Not all finfluencers are created equal. There are definitely also courses and other programs that can help people improve their financial literacy and eventually reach financial independence.
Plus, many of the affiliate links that can be found on blogs and social posts are for legitimate products that the content producers truly believe in. Most of the ads podcasters in the personal finance and FIRE space run are for companies they use themselves. Using affiliate links to buy something is actually a great way to support your favourite content creator for free.
Unfortunately, there is an increasing number of finfluencers who don’t have their followers’ best interest at heart and they ruin things for everyone else.
A Tale of Two Groups of Finfluencers
There are basically two groups of people who promote and/or sell products and services in the personal finance space:
a) Content creators who run blogs, social media accounts, podcasts, YouTube channels, etc. as a hobby and earn some money along the way. Sometimes these hobbies turn into small businesses. The money they end up earning is a byproduct of their efforts to spread their message and help educate others. Their primary interest is to share experiences, stories, information and have a voice in the community. Making money is a secondary consideration. These people would continue doing what they are doing even if they didn’t get paid for it (and most started out this way).
b) Businesses that were started to make money. Whether their business is a “side hustle” or a full-time gig is irrelevant. The primary interest here is to make money. This is not to say that the people who run the businesses don’t like sharing their stories and helping others, but it’s a secondary consideration. These businesses would not exist if they didn’t make money. Professional bloggers are as much part of this group as mortgage brokers and financial advisors.
There are some fantastic businesses in the personal finance and FIRE space. Businesses that add value and offer great services, innovate, teach people valuable knowledge and enable personal finance and FIRE enthusiasts to achieve their goals.
There is absolutely nothing wrong with someone who wants to run a business in this space. It is actually a good thing because it is not usually possible for people to offer value at scale without running a business. What is important is that people who buy products and services promoted or sold by businesses know that they are dealing with a business.
And this is where it gets complicated. There are many blogs, social media and Youtube channels, etc. that look like hobby projects but are in fact businesses. They exist to make a profit. However, from the outside they look exactly the same as blogs, social media accounts and YouTube channels in category a) (hobby projects). This is usually intentional. These businesses belong to the “Wolves in Sheep’s clothing” category I wrote about in my previous article. So to get a complete picture we have to add genuine businesses that serve the personal finance community to the overview chart:
Sometimes, hobby projects from category a) turn into businesses. That is of course fine, but I believe it is important for followers to know when this has occurred.
As you can see the lines are very blurred in the grey area between categories a) and b). I personally much prefer to deal with actual businesses that are transparent and don’t pretend to be something they are not. And of course, I communicate a lot with people in category a). I avoid people and businesses that belong in category b) but pretend to be in category a) – the Wolves in Sheep’s Clothing.
A big problem here is that it is often almost impossible to spot the Wolves in Sheep’s clothing, especially if you are not sure which red flags to look for.
Can Follower Numbers and Google Tell Us Which Finfluencers to Trust?
Follower numbers are definitely not an indication of a finfluencer’s trustworthiness. I think we all know that, but it is often forgotten.
Unfortunately, Google is also not a good filter. In fact, it is often difficult to find the offerings that provide actual value and that are offered by people who really know what they are talking about. Why? Because ranking in Google searches is all about SEO, writing articles about the right keywords and networking with others in the space. Not everyone is willing or able to do that, and I would argue that most genuine content creators would much rather spend their time producing valuable content instead of trying to hack the system.
If someone appears on the first page in Google that tells you that they are very good at SEO, not that they offer the best information or product. Don’t believe me? Here is a little test: Google “how to invest my money” and have a look at the results you get. Spoiler: it’s not sites that tell you to just buy a low-cost index fund and get on with your life…
So if Social Media and Google don’t do the filtering for you, how do you know who you can trust?
The Finflucencer ‘Smell Test’: Red Flags and Revealing Questions
Well, it’s like with all other aspects of personal finance: Do Your Own Research (DYOR). Be sceptical. Below I’ve listed some obvious red flags and some questions to ask in order to find out if a finfluencer and what they are promoting/offering passes the smell test.
Remember: No one cares more about your money than you do.
A Note on Affiliate Links and Sponsored Content
The most important thing to keep in mind is that when there is a potential financial gain to be made there is automatically a potential for a conflict of interest. That’s why I personally prefer to deal with businesses that are upfront about what they are selling.
Of course, it’s a win-win if you buy a book you wanted to buy anyway through one of your favourite bloggers’ affiliate links. You get your book and the blogger gets a small commission (at no cost to you). You should actually go out of your way to support content creators you follow in this way. But signing up for something like an insurance contract or making an investment in something you don’t fully understand because a finfluencer raves on about it can have serious negative consequences.
So be careful when you sign up for a service based on “reviews”. Try and get some feedback from unaffiliated users and trust your gut.
If you are wondering if a finfluencer is recommending a product over another because of the kickbacks they receive it is a good idea to go on the website of the company offering the product. Often you can find an “affiliates” or “partner” section that has some details on the affiliate program they offer. If you can’t find such a section on the website of another company offering a similar product, that might be an indication that there might be a conflict of interest.
Red Flags: 7 Signs You Should Take Your Money and Run
- Words and phrases like “secret formula”, “fool-proof system”, “proprietary”, “exclusive”, “make money while you sleep”, “guaranteed return”…
- An influencer who claims that they have achieved financial independence but tries to hard-sell you their product. As Tanja from Our Next Life pointed out in her recent article on this topic are really only two reasons this would be the case:
- They don’t have as much money / the level of financial independence as they claim. So you should definitely not listen to them.
- They have achieved FIRE but can’t stop hustling because they have not found their “enough”, which is probably a sign that they are not the best person to listen to.
- What you are promised sounds too good to be true.
- Get-rich-quick promises of any kind; strategies that “beat the market”
- A finfluencer who promotes products that they don’t use themselves / haven’t vetted properly.
- Blog articles, videos, Instagram posts, etc. that sound like a sales pitch and are littered with affiliate links and links to questionable companies like loan providers. These are often sponsored articles and/or “reviews” that are actually designed to convince you to buy something.
- Something just doesn’t feel right.
13 Questions to Determine if a Finfluencer is Trustworthy
Ask yourself these questions to do a quick finfluencer ‘smell test’. Of course, we can’t be 100% certain if our answers are correct, but answering these questions will help you determine if you feel comfortable forking over your money to a content creator or the products they promote.
General questions to ask about finfluencers:
- Would this person create this kind of content if it didn’t earn them money (would they do it for free)?
- How long has this person been active in this space? Do they have a long track record and trust in the wider community?
- Is this person a genuine member of the personal finance / FIRE community or someone who is trying to make money off the community?
- Does the person disclose their endorsements and sponsorships? Do they disclose if and how they make money from their blog/podcast/Instagram account/YouTube channel? Are they transparent?
- What is the primary intent of this content creator?
a) To share their message and help others. Note: This does not mean that they can’t or shouldn’t make money from their content.
b) To make money. Note: This category often includes people who start creating content as a “side hustle” and who happen to pick finance/investing/FIRE as their “niche”.
In other words: Is making money a byproduct of their efforts to spread their message and contribute or the primary focus?
Questions to ask about affiliate links:
- Why is this person promoting this product? What is in it for them?
- Do you think this content producer promote this product if there was no kickback offered by the company?
- Does the person promoting the product/service actually use it? Is the product/service aligned with their overall message?
For digital information products (like e-books and PDFs), courses and other programs offered by finfluencers:
- Has this person actually achieved what they are promising to teach you? Are they at least reasonably close to their goal?
- Is the strategy this person teaches the actual strategy that led to their success? Do they practice what they preach?
- Is you buying their product part of their financial plan or journey to Financial Independence? If so, are you 100% sure that what they are trying to sell you offers enough value to justify the price?
- Could you find the information this person sells online for free?
- Is it clear what you will receive when you purchase the product in question?
Recap and Food for Thought
There you have it: 7 red flags and 13 questions to ask. There are probably many other red flags and questions to ask, but I think this is a good start. I thought of a handful of finfluencers I would definitely not consider trustworthy and they all failed the smell test using the questions above.
I’ll leave you with a short video by “Start with Why” author and public speaker Simon Sinek (thank you Mr. Money Plant for sending this to me!). Simon speaks about influencers in general, but his thoughts are very relevant to the whole finfluencer discussion. Enjoy.
Do your favourite content creators pass the finfluencer ‘smell test’?
Are there any red flags or questions you would add to the list?