Table of Contents
YouTubers Keep Giving Bad Money Advice
YouTubers keep telling you to invest in real estate, crypto, and their favorite stocks – but that advice is actually making your financial situation worse, not better.
Having millions of followers doesn’t necessarily mean they know how to build wealth. And the strategies that made them richer could actively work against you.
I passed the CFP® exam at 16, and in this video I’m going through their most popular advice line by line to show you exactly where it falls apart.
Alex Hormozi
Real estate investing in general can be a good strategy if you can handle the hassle and risk.
But for this specific strategy to work, you’d need to have enough money to first buy the land, then pay taxes and maintenance for decades, and you just hope the city expands and the land appreciates.
This kind of speculation is a terrible strategy, especially when the alternative is stock investment, which would give you close to 700% returns over those 20 years.
Nolan Gouveia – Professor G
The music is great, but let’s take a look at the actual strategy.
These stocks might look good today, but that definitely does not mean you should hold on to them forever. Because 30 years ago, this list would have looked very different, and the same will be true 30 years from now.
When I started investing at 7, I was also fascinated by individual stocks. But I quickly learned that was a mistake.
So now, I invest in an index fund that tracks the S&P 500.
The index weighs by market cap and is self cleansing, so it automatically adds the rising companies and gets rid of failing ones.
Why would I bother researching individual stocks when I can just ‘set it and forget it’ with the index fund?
Legacy Investing Show
Here, he uses a lot of big words to make you think bitcoin is a good investment, but none of that changes the truth.
Bitcoin is insanely volatile, and also risky. And since there is no actual company or physical asset backing it, there’s no reason it doesn’t go to zero other than people who are creating demand.
Yes, you could double your money – but you could also double your money in roulette and nobody thinks it’s a good investment.
So even if you’re very confident about Bitcoin, investing 25% of your portfolio in it when you’re young is just way too much considering the pretty much guaranteed stock market returns that you’re giving up.
Graham Stephan
There is some merit to this, because in what’s called ‘slow go’ years which usually between 75 and 85, expenses go down because people no longer spend as much on travel and other activities.
But this analysis forgets two things that are pretty important.
First, healthcare costs add up a lot in the last decade or so, which is why 87% of retirees report being blindsided by medical costs. So if you save up less while you’re working, these expenses will hit even harder.
And it also seems to assume that people want to exhaust all their savings during their lifetime, and if you have anything left over is a ‘failure’.
But this is also not true, since your heirs or charities can still benefit from the extra money saved.
So while I agree it’s important to enjoy the present and not sacrifice everything to invest more, people should save 10-15% of their income when they’re young and not underestimate retirement expenses.
Call to Leap
There are some good recommendations here: the S&P 500 index fund is a great choice for most people, and if you’re young and have a high risk tolerance you can consider the NASDAQ 100 fund.
Putting 10% in a money market fund is a really confusing recommendation.
While studying for the CFP® exam, I learned that you should really only use a money market fund for short-term goals, since it’s basically a savings account.
But this is an investing video, so I have no idea why he’s recommending it. If you invest that $1,000 in the stock market instead of a money market fund for the 35 years, you’d have over 10 times more money.
But most people who invest in the stock market are making a few mistakes that are easy to avoid. Check this out to avoid the 4 most common beginner investing mistakes that cost investors tens of thousands over the long run: 4 Investing Traps You’re Falling Into (And How to Escape)