We all spend a lot of time on social media every day. Probably too much time. But can social media help our finances? Can it actually be a good thing or is it all bad? It doesn’t necessarily need to be so polar opposite, but I guess what I want to explore is just whether we can find the good aspects of social media and actually use it to improve our finances.
How can social media help my finances?
To start with, let’s look at how social media could possibly assist your financial situation.
- access to highly qualified individuals who can teach you about money and managing your money,
- you could promote your business or side-hustle and earn additional income,
- find blogs and articles related to financial questions or predicaments you have,
- access to legitimate investment analysis and information,
- potential mentorship,
- ability to crowdfund legitimate and worthy causes,
- access to fund managers, opinion writers and financial coaches,
- tons of free resources to help you learn to budget, save, invest and take charge of your money.
So there you have it, many positives of social media.
The dangers of social media financial advice
It’s not all rosy though. I’d take a guess that there are far more fake companies, phishing scams and poor advice that is peddled online, than what is good. This means that you really have to be careful about who you follow, what investment advice you trust, and who you give your money to.
There are two main categories of dangerous financial advice online.
Scams / Dodgedy deals
This is the obvious category of fraudsters. These are either very obvious scams, or very sophisticated ones. But the bottom line is that if something sounds too good to be true; it is!
No one can guarantee you returns of more than around 14%. Of course there may be some crowd-funding investment options or money-market type accounts that will offer a good guaranteed interest rate, but if you find something more than 14% let me know! It just doesn’t seem possible. So this rules out the betting sites that are automated, and the Bitcoin miners that promise you these amazing returns, and ponzi schemes pretending to be legit.
Think about this, if someone was able to guarantee a 20% growth (or more) – why on earth would they share this with everyone? And what kind of investment would be sustainable to give all investors this guaranteed growth? What kind of business can always guarantee high returns to everyone? How would that work?
No, no. Stay away.
Note: I’m not saying that you can’t get great returns – far exceeding 20% or even 50%, or more. You can! You can find investments that make you rich. But, no-one can guarantee that and promise that it will be so. There would be risk involved. Be wary of the promises.
Poor advice from unqualified folk
The other side of the bad online financial advice is when you listen to unqualified, emotional and biased commentary on investment strategies. The person who say you must invest in xyz stocks because they’re just the winner. Or someone who only punts offshore investments because of their own fears of the countries economy.
Personally I enjoy reading different perspectives and different advice. But do your research!
It’s not a good idea to simply follow the herd as Twitter is ablaze with some new investment or stock option. You don’t know what type of investment experience the person on the other side has. And whether they have been investing for 3 years or 30 years? Do they have millions invested? You only know what they allow you to know via their curated platform. The same can be said about me. LOL
Herd mentality and information that cannot be backed up with facts is dangerous. Don’t let your emotions get the better of you.
Can social media help our finances?
Absolutely YES! But you need to know who to follow and you need to understand how to pick out the good from the bad. And I’d recommend having a professional independent financial planner nearby who you can bounce ideas off.
Where to find good financial advice online?
No trustworthy financial blogger or social media account will offer outright financial advice online. That’s just too risky. Everyone’s financial situation, personal circustances and goals are just so different. What works for me may not work for you. So, you won’t get actual financial advice online.
What you will get though is quality information on financial products, reviews on investments and thought-provoking articles on financial decisions.
There are many financial decisions that’ll we’ll probably all face at some time and it’s interesting to read about someone else’s experiences which can help us form our own decisions.
- If you’re a couple and you both have a car, should you sell one car?
- Should you pay extra into your home loan or rather invest the money?
- What can you do to improve your monthly cash flow?
- How can you pay off debt?
Financial blogs, websites and social media accounts are there to offer resources, information, and education. Use these to improve your finances.
Who can you trust online?
So after all of that, who can you trust with good, unbiased financial content?
Here is a very limited list of local blogs and sites that I would recommend:
Take Charge Of Your Money – yes, you’re on my blog! lol
Terence Tobin – highly recommended – tell him where you heard about him 🙂
And here is my list of FinTwitter folk to follow on Twitter.
There are many others in the rapidly growing personal finance community in South Africa!
What do you think?
Who do you follow or how has social media affected your finances? Let me know in the comments or via social media!