3 Big Risks of Social Media Financial Guidance
Feb 07, 2025Truth vs. Trend: The Dangers of Social Media Finfluencers
What’s the latest “hot” financial tip or “secret” you’ve seen on social media? Maybe it was a retirement hack, a crypto opportunity, or some “groundbreaking” investing strategy?
If you’re like most social media users, financial advice from so-called “finfluencers” is almost impossible to escape. These self-proclaimed financial experts are everywhere—sharing shortcuts, tips, and promises that sound too good to be true.
But here’s the problem: often, they are too good to be true.
More than ever, people are turning to social media to learn about money, with many trusting finfluencers as reliable sources of guidance. However, relying on social media for financial advice comes with real risks. Let's break down why you should think twice before following the “expert” advice in your feed.
1. Believing the (Bad) Hype
“Herd mentality” refers to blindly following the crowd without critical thinking. On social media, this behavior thrives. Posts that go viral, paired with our FOMO (fear of missing out), often lead people to make financial decisions without proper research or understanding.
Example: Remember the GameStop frenzy in January 2021? GameStop stock skyrocketed due to hype on Reddit and trading platforms, increasing in value almost 20x. But the bubble quickly burst, leaving many investors—both individual and institutional—with significant losses.
The lesson? Popular trends may seem exciting but are often unstable and come with massive risks.
2. Idolizing an Illusion
Misinformation isn’t new to social media, but when it’s disguised as financial advice from a wealthy finfluencer, it’s harder to detect. High follower counts, flashy lifestyles, and well-edited content often make these individuals appear credible, but that’s not always the case.
Example: A famous influencer with 800K+ followers once sold a $500 course on “building a travel blogging business.” While the promise of success seemed appealing, the course fell short, leaving many students frustrated. Worse, the influencer blocked unhappy clients and allegedly didn’t offer refunds.
The takeaway? Popularity and polish don’t guarantee expertise or honesty.
3. Sinking Inside a Scheme
Get-rich-quick (GRQ) schemes are another common social media pitfall. These schemes promise massive rewards with minimal effort, often requiring you to invest large sums upfront or recruit others to participate.
Example: Multi-level marketing (MLM) schemes flood social platforms with promises like “Make $100,000 in your first month!” or “Be your own boss!” The reality? Most participants lose money, while a small few at the top profit after years of effort.
The truth? Building genuine financial success takes time, research, and hard work—not shortcuts or pyramid-style systems.
Why Social Media and Financial Planning Don’t Mix
Social media was never designed to offer personalized, professional financial advice. Its purpose is entertainment and engagement, not tailoring guidance to your unique situation.
While it’s fine to explore ideas or stay informed, it’s critical to recognize the limits of social media as a financial resource. Instead of blindly trusting finfluencers, work with a qualified financial advisor who can provide personalized advice and help you achieve long-term financial stability.
The Bottom Line
Finfluencers may be trendy, but trends aren’t a substitute for the truth. Your financial future is too important to leave in the hands of social media hype. Be cautious, think critically, and seek advice from trusted professionals—not viral posts.
