A Finance Influencer Epiphany
On finance YouTube and TikTok, it’s easy to get swept away in the extravagance of the day-to-day influencers. I began to wonder how these influencers got started and I realized an underlying thread connecting all of these influencers.
Many influencers will give you information about the economy or risky trades to generate likes and engagements, the key metric of growing their platform. The reality is that influencers could care less about the information they deliver as long as it generates social media metrics and drives their personal brand growth.
I’ve been following Our Rich Journey on YouTube for their down-to-earth style of delivering information almost guaranteed to generate wealth. It got me thinking about how their content is so popular yet doesn’t contain the flashy advice seen from other finance influencers.
Time vs. Risk
It all comes down to your risk tolerance. For most of us reading this blog, the amount of money you’re willing to lose is a key factor in generating your wealth. Modern finance influencers are prioritizing the “get rich quick” scheme for video likes. The truth is simpler than that - Index Funds.
Investopedia defines Index Funds as:
A type of mutual fund or exchange-traded fund (ETF) with a portfolio constructed to match or track the components of a financial market index, such as the Standard & Poor’s 500 Index (S&P 500). An index mutual fund is said to provide broad market exposure, low operating expenses, and low portfolio turnover. These funds follow their benchmark index regardless of the state of the markets.
Sticking your investment budget into index funds is a surefire way to becoming a millionaire within the next 10 years. As you continually invest, index funds track market performance which increases year-over-year within a set amount of time. That’s how most influencers started.
It’s not appealing or flamboyant, but index funds are the best way to generate wealth. Eventually, these influencers began to tout their “investing” experience which led them down the social media path.
My Next Steps
I’m taking a step back from my current investing patterns to divert my funds into index funds. After losing money in individual stocks and day trades, I lost the rush I once felt with these activities. After all, nobody likes losing money.
The goal is to grow the pot of gold and not flaunt my short-term wins. It'll take a decade before I see any substantial returns but that’s where working harder comes into play to increase your disposable income.
Some ETFs I’m interested in - QQQ, METV, SPY, VOO, VTI.
Have a great week,
JT