Financial personality George Kamel recently told his audience to stop taking money advice from influencers.
His warning comes as MrBeast is on the verge of launching a bank that will include crypto, investment banking and credit cards. The plan has been in the works for most of the year, but you won’t see Kamel rushing to create a bank account with MrBeast.
“Ventures like this typically don’t end well,” Kamel said.
He didn’t throw shade on MrBeast but believes it’s important to avoid money advice from influencers. He highlighted some of the reasons why people fall for these money traps and how to build wealth.
Everyone Is Looking for the Next Bitcoin
Bitcoin has captivated many investors due to how quickly it has soared. This digital currency traded for under $1,000 less than a decade ago and was valued at above $100,000 per coin earlier this year. Knowing that those types of returns are possible causes some investors to pursue speculative opportunities instead of sticking with boring but proven methods like investing in an ETF.
Bitcoin and other high-growth assets also make people consider how they can get rich quickly. This type of thinking can lead to high-risk investments that end up imploding. Kamel brought up Logan Paul’s Crypto Zoo, the Hawk Tuah memecoin and a separate cryptocurrency that Kim Kardashian promoted to her Instagram followers after receiving a $250,000 check as some speculative assets that quickly crashed.
Kamel said that you must be able to explain an investment in two sentences without using any fancy jargon. That way, you know that you are investing in fundamentals instead of hype. He also said that you should only take money advice from proven experts. Just because someone has followers doesn’t mean they have wisdom.
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Influencers Aren’t Thinking About You
MrBeast’s upcoming bank is another example of an influencer offering a financial product. While financial products backed by influencers don’t always pan out, followers go to these products in droves anyway due to parasocial relationships.
A parasocial relationship is a one-sided relationship where followers develop a deep relationship with an influencer who doesn’t know who they are. Just because you have watched an influencer’s videos for years doesn’t mean they care about your best interests. However, followers feel like they know influencers on a deeper level just by consuming their content.
This type of trust can leave people financially vulnerable when their favorite influencer recommends a financial product that implodes. Influencers often get paid to recommend financial products through sponsorships and will promote almost anything as long as they receive a paycheck. FTX is one of the biggest examples of this, with professional athletes, entertainers and other celebrities promoting the now-defunct crypto platform.
Stick With Boring Wealth Building Strategies
Chasing the next trend can burn you in the long run, as once hype reaches critical mass, the real money has already been made. Kamel suggests sticking with boring money habits and wealth-building strategies instead of looking for flashy tactics.
Investing a portion of every paycheck, having a budget and avoiding debt are three of the most common money habits that make it easier to build a nest egg in the long run. Most people do not need a multimillion-dollar portfolio to maintain their current lifestyles. The boring money habits make it more likely that you have that type of nest egg when you actually need it.
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This article originally appeared on GOBankingRates.com: Stop Taking Money Advice from Influencers, George Kamel Warns
