Weekend Reading – The Rise of Finfluencers
Hey Investors!
I hope you had a great week – welcome to a new Weekend Reading edition that shares some perspectives on the rise of finfluencers: the good and the bad.
Before that, some recent reads from my site!
Here is a summary of Canadian bank earnings including all the dividend raises I got recently – I hope the same for you?
And I updated this case study for readers – do you need $1.7 million to retire early? You might. Read on why.
Weekend Reading – The Rise of Finfluencers
Thanks to investor advocate friend, Ken Kivenko, I got notice of this OSC (Ontario Securities Commission) staff notice related to guidance on how securities laws apply to the activities of social media financial influencers (finfluencers) and to registrants and issuers who work with them.
I’ve linked to the OSC staff notice here.
On the whole, I don’t mind the direction and I support it – but with some more balanced positives to go with the negativity.
Over the last decade or so, we should all admit and acknowledge that social media has become a powerful platform for sharing information but also misinformation.
On the positive, social media has been a great pathway to discover new products and services for pretty much anything in our lives. A new diet, a new exercise regime, and even new ways to invest for some.
As the OSC guidance suggests, Finfluencers who rely on any “general advice” exemption must provide clear and timely disclosure when they have financial or other interests in securities that they talk about. I would hope so. There are far too many people, including professionals, who believe they can predict the future movement of stocks, bonds, and pretty much any other security in our financial world – folks who want to make a living telling you want to do and what will happen when. As an amateur, if you make predictions, get it wrong but provide advice to others in doing so you are acting outside security laws. I do agree with that. As a registered professional, if you make predictions, get it wrong and provide advice in doing so it’s generally fine.
Things to think about…
If you take out the notion nor intent of providing any direct advice coupled with strong disclosure statements then I believe Finfluencers can offer many positives.
Take my blog for an example. It’s a tool to make personal finance accessible, relatable, and engaging for new investors and established investors. It can foster community. I say so here. And, if there is any “advice” here at My Own Advisor at all its rooted in my own journey – my bio as a DIY investor and advisor to my own journey – a signal for others to learn about themselves and to take personal finance responsibility over their financial journey too.
It was always my goal to share what I know and don’t know via this site. I continue to do that every week.
- Increased accessibility & literacy – some amateurs have a way of making complex financial topics understandable and relatable without industry jargon.
- High motivation – by way of my own successes and failures (read some here) I know I’ve shared what has worked for me and what hasn’t worked for me to pay it forward to others who might not want to do nor repeat the same mistakes.
- Sharing trends – bloggers, vloggers and others can readily respond to market news and keep their audiences informed; including new products or services and their consumer take on them or not.
- Fill-in-the-knowledge gap – Finfluencers can share their stories and/or those stories of industry experts in ways that provide information, best practices, guidance where formal financial advice is hard to come or simply not easily accessible unless you know the expert. A good example is an interview with an industry expert here. I wouldn’t have been able to ask Larry some personal questions without this site as a tool to know him.
I can’t speak for other bloggers or vloggers or finfluencer goals but I can confidently say that given the time and energy I put into this site and sharing my personal journey it is hardly a means to wealth creation unto itself. Quite the opposite: I wouldn’t even make minimum wage running this site.
Rather, I run the blog as a means of expressing myself, deploying some creative energy, and advancing personal learning that extends well beyond money. If all readers and followers are able to learn something, about themselves including making some better, informed, personal financial decisions, all the better. It’s a means to pay it forward. Sharing your story or your expertise online in any subject including personal finance does not have to constitute direct advice and in some cases, quite the opposite.
Personalized investment recommendations and direct advice on securities should remain a no-fly-zone for amateurs. Finfluencers and professionals alike making any promises of returns should be ignored and avoided. And finally, while many Finfluencers do come from all types of backgrounds and expertise levels, this does not mean you should act on any information from anyone without personal due diligence and time for reflection before your own decision.
Many get caught up in huge celebrity scams – I would hope regulatory bodies in Canada and the U.S. start there:
- October 2022 – Kim Kardashian was fined $1.26 million for promoting EMAX tokens without properly disclosing her payment from EthereumMax.
- March 2023 – YouTuber Jake Paul was part of a group fined $400,000 for allegedly unlawfully promoting crypto asset securities.
As long as I run this site, I will continue to share my story and express what is working for me and just as importantly, what hasn’t worked for me. I will continue to carve out some time to share my opinions and perspectives. The financial world is full of professionals and finfluencers alike who are looking to make money and a living off what they do. Professionals and businesses look for pageviews and clicks to thrive too. Before making any financial decision, ask yourself what you might gain or what the person sharing the information might gain from what they are doing.
I’ve tried to never outsource my own thinking. You should do the same.
More Weekend Reading – Beyond The Rise of Finfluencers
Finfluencer and professional Ben Carlson from A Wealth of Common Sense told us inflation is not coming back down anytime soon – as in ever.
“The difference between 2% and 3% inflation doesn’t seem like all that much, and it’s not over the short-term. But over a decade 2% annual inflation is 22% cumulative inflation while 3% annual inflation is 34% cumulative inflation.”
I continue to use 3% sustained inflation for our own spending and inflationary projections as we approach retirement in 2026. What do you use?
This was my approach to navigate higher inflation a few years ago. So far, so good.
Rob Carrick wrote an opinion post in The Globe (subscription) which I enjoyed:
“People are waking up to the fact that new vehicles are the Great Canadian Money Suck”
Rightly or wrongly, we paid cash for our last car. No car loan here to finance a depreciating asset.
From Rob:
“This leaves us with new vehicles, the Great Canadian Money Suck. The average new vehicle selling price was almost $45,000 at mid-year, and the average monthly loan payment was around $850, according to J.D. Power. Canadians have been amazingly open to carrying this load, but there are signs that is changing.”
Since I love owning dividend stocks including dividend stocks that raise dividends to me, Dividend Growth Investor highlighted many Canadian and U.S. stocks that raised dividends recently.
Finally, congrats to reader Alvin who won this The Wealthy Barber giveaway on my site. Thanks to all entrants and readers for their comments. Alvin, your book is in the mail – Canada Post willing. 🙂
And, if you can’t get enough of Wealthy Barber-like material, watch this interview with Morgan Housel. Morgan wrote a fantatic book about The Psychology of Money that is one of my favourites.
Mark
Hi Mark, good times with “influencers”, as far as I’m concerned quite a few are w/o qualifications, competence or use. Youtube in particular is mostly a garbage bin. Many are simply product pushers, always remember that and always to do your own assessment as well as a background check. It does look like the Securities guys have started to pay more attention so here’s hoping.
I lean more towards educators (like this site) with lived experience and a decent track record and accountability. It’s funny how most advise seems to converge on a couple of key messages like pay yourself first, invest in equity, diversify, don’t buy stupid, be mindful of taxation, it is that simple yet also difficult to follow through on in a noisy world designed to distract and pick your pockets clean.
Like Mr. Chilton David Bach has “updated” his classic , https://finance.yahoo.com/news/author-david-bach-reveals-how-you-become-a-millionaire-160242480.html, US focused but still quite a few parallels.
Not that worried about inflation, it’s like gravity just always there. Most income sources are hedged and our setup should see income growth (currently ~15% py) outpace inflation. The way I see it your behavior is way a bigger problem, like buying that new $50K car you absolutely can’t live without yet park in the garage most of the time:)
Ya, never on YouTube for the most part. I also prefer lived experiences.
The thing with personal finance is it hasn’t changed that much = the basics I mean. There are however a gazillion ways to say the same thing:
-Live below your means
-Pay yourself first
-Save first, spend second
-Try to ensure cashflow > expenses.
And on and on… All good. Just the way it is!
Thanks for your engagement!
Mark
You Tube has its uses just not Fin related, most young folks get their “info” from places like the Tube and Tiktok it does worry me. That said I recently got to endure a financial literacy session at one of my girls schools. So called experts (Bank) botched it to a point I was ready to deck the guy. So not great either.
Plenty of recourses on the topic out there but most are not relatable, I even found a 288 page behemoth (Financial institution) that made your eyes bleed.
Which leads me to a question, sorry. I do have my own 5min Fin talk for young ones; assets vs liabilities, credit, the wonders of a TFSA and why they must have one, save $10K by age 25, contribute $200-$300 pm so they can FILOOT on $500K by the time they are 50 (borrowed your FIWOOT don’t sue me please) In the end I point these young folks to sites like yours but I fear they get overwhelmed. If you were 18 again what would you advise yourself in 5 minutes or less? How would you get started in today’s world? Appreciate your thoughts.
Happy to provide an answer.
If I was 18, beyond some cash savings, I would probably put about 50% of my investments in XIU and the rest into XAW to be honest.
Max out the FHSA with that.
As that 18-year-old ages, makes more money in their 20s, max out TFSA.
Otherwise, live my life and have fun since you’re only young and healthy, once. 🙂
Thanks Mark, I wasn’t thinking FHSA its super targeted saving and assumes you’ll buy a house or even remain here. At 18 that feels a tad early to me but as value for saving $ goes it’s hard to beat.
Appreciate the suggestions,
Ben
Most welcome. The FHSA is the best of both worlds = TFSA and RRSP, so even if the young adult doesn’t buy a house it’s an excellent account to invest in. TFSA is a very, close second. 🙂
Mark
Being an old grouch I tend to be highly skeptical of almost everything financial I read or watch online now. Between the click bait headlines “the 8 Thousand mistakes ALL retirees make and how to avoid them”, the claims “I’ve worked with hundreds of retirees”, or “We retired at 7 years old and here is how you could too!” I could just about throw up. Needless to say I’m not a fan of a good percentage of the financial crap seen online these days. (I do enjoy all the Wealthy Barber podcasts though)
As for inflation, whilst I understand the problem, I currently don’t really factor it into any kind of planning. The work pensions, CPP and OAS are inflation adjusted, and in the short term, the RRIF has a quasi-inflation deflector built in with the rising minimum withdrawal rates. Ergo it really has no impact on my spending planning. I guess this is one of the benefits of being older, the “long term” ain’t what it is for a yoot.
I remain skeptical more and more about that stuff too. I am genuinely curious about DIY investors who have “been there, done that” since it is what I am trying to do myself…but a bunch of professionals charging $5k or $10k for this service or assets under management doesn’t intersst me at all. Pretty clear to me such firms are in it to make a lot of money even if they do good work and helps others.
If you’re not too concerned with inflation, it means a. you either have enough inflation-protected assets and/or b. you have enough income to cover your needs. Either way, a. or b. you win at life.
Mark
I use 4.4% net growth for projecting the _real_ return generated by my 80/20 stocks/bonds portfolio. Average _nominal_ annual returns for a US 80/20 portfolio are around 9%, depending on which data set you use.
I don’t want to rely on mean or even median figures for long-term estimates since the particular set of returns experienced in this lifetime might not be average. I’m leaving ample room for surprises.
The downside to being conservative in estimates is that you need to save longer to reach financial independence and you might pass away with a bigger portfolio than necessary.
4%+ net / real return is probably spot on based on long-term annualized returns of 20+ years or more.
Certainly when I look at XIU for TSX or an S&P 500 indexed fund, that is the case.
Do you think nonimal returns will be 8-9% in the decade ahead? I’ll take that of course but not convinced things are going to be that high so I certainly don’t bank on that. I believe you are very wise to leave lots of “ample room for surprises” as you put it.
Mark
Vanguard says 3.5-5.5% annual returns for the next 10 years:
https://corporate.vanguard.com/content/corporatesite/us/en/corp/vemo/vemo-return-forecasts.html
Other forecasts also give similarly humble numbers compared to the returns we enjoyed in the past 15 years.
It makes sense to plan for lower returns. The next decade matters most to those close to retirement or already in retirement.
Yes, should be interesting. Certainly not banking on 20% every year here.
Absolutely planning for lower returns than I’ve been getting longer-term.
Mark
Thanks for that link above Stefan. As I divested from everything that is the USA it is nice to see all my Ex-US is going to do much better at 4.9-7.2% over the next 10 years.
Good stuff, Chris. Totally get divesting of U.S. stocks or ETFs these days.
Sad times.
I hope you continue to be well!
Happy Holidays,
Mark
I’m pretty damn conservative when it comes to the rates I use in my projections. For inflation, I tend to use 3% and for rate of return (RoR), I tend to use 5% (even though my portfolio mix would suggest to use more like a 6-7% RoR). But hey – if my projections show I’m good with a net return of just 2%, then anything above that is GRAVY! 😉 BTW, Ben is bang-on when he talks about the cumulative effect of inflation and the differences between 2% and 3%. His one decade cumulative difference of 22% vs 34% is even more pronounced after two decades (49% vs 81%) and three decades (81% vs 143%)! And since most of us are hoping to fund a 30+ year retirement, we need to definitely be aware of that inflation effect and ensure we’ve got it covered!
You and I are the same I think…..I use conservative 5% RoR and pessimistic 3% inflation = 2% real return.
Anything close to 3% or 4% or 10%+ real return this year is GRAVY. 🙂
I will just spend more.
Yes, compounding happens with inflation too.
Consider the Rule of 72.
Money doubles in value at 7% returns every 10 years or so.
If inflation is 3%, then the costing of living doubles on you and I every 20-25 years. Inflation can be a wealth killer if you don’t include it – so plan for it. 🙂
Cheers Mikey!
Lucky Alvin!! The Wealthy Barber pay-yourself-first was how I got to early retirement. It really is that simple, but not always easy. 🙂
I have a plan with 3% inflation and 5% growth to really stress test my finances. I have my own excel spreadsheet that “attempts” to mimic retirement software to a certain degree. I’ve run scenarios with the FP Canada long-term inflation assumption of 2.1%, another with a higher growth rate of 7%, and the two changing assumptions (inflation, growth) combined. It gives me an idea of a conservative, moderate, and high spend rate. With 80% invested, I don’t think 5% is a reasonable growth rate but you never know if we’ll have another lost decade. Add in a go-go, slow-go, no-go and there are so many scenarios and combinations your head could spin! LOL
These give me peace of mind though, so I know if a big expense comes up, we can afford it. Maybe one day that will be a car. So far, we’ve never purchased a vehicle which I attribute to our ability to pay off our mortgage early. If we ever purchase one, it will be used because of how quickly vehicles depreciate. Cash only.
Ya, I think using 2-2.5% inflation is likely the bare min. now to be honest.
With our 90% invested and 10% in cash/cash equivalents, I think 5% annualized (which is what I use…) is probably not too bad. Could be conservative but to your point, could be very much optimistic if we have another Lost Decade. That could happen for sure…when, well, no idea!
I think if you can afford a new car, want a new car, well, go for it but not at the expense of too much debt. I like your call on cash only. I don’t think it makes too much sense to finance a depreciating asset for many years on end…but most people do. To each their own.
We paid cash for our last car/SUV and we enjoy it and hope to have it for another 10-12 years since it’s a 2024 PHEV.
Cheers,
Mark
Regarding using cash vs a loan to purchase a new vehicle, for me the decision is a run the numbers exercise.
The one, and so far only time, I purchased a new car (i always bought used with cash until our latest vehicle) I told the dealer I was going to pay cash throughout the sale process so I could get the price they’d sell it to me in cash. At the very end when about to sign the purchase agreement, I asked how much the loan rate (which I already had a pretty good idea it would be) was. It was 0.9% for a 5 yr loan. I said I’d like to go the loan route as GIC’s, money market or HISA etf’s were paying about 2.4% at the time. They said in that case they’d raise the purchase price by $1000. It still made sense financially for the extra $1000 cost to take out the loan.
Now, if the loan would have been 3% or the loan vs cash price for the car been $3000 or $4000 more, I would have paid cash.
For those who may not be aware, I should have added that it is the norm for vehicles to be priced/sold at higher costs when purchased via a loan. That’s why one of the first questions sales staff ask is how are you going to pay for a vehicle.
Meant to add, congrats on your early retirement (I hope I have mentioned that before….) = well deserved for sure!!
Mark
Thank you for sharing, Mark. Speaking for myself, I have learned so much from you and others that I simply would not have known otherwise. In my personal experience, when I first started working as a 22 year old out of University I did like many others and went to the bank for guidance. They set me up with a high fee mutual fund in an RRSP and I went on my merry way thinking that I was doing the right thing. In subsequent years I would simply go back in to the same bank (though different branches) whenever I moved cities or changed jobs and had a DC pension payout to put into a LIRA. Every time I went into the bank it felt more and more as if it was just one big sales job (rather than financial planning) and they did not have my best interests in mind. You and others provided a vehicle for me to educate myself over time and eventually turn to DIY investing (while saving myself a small fortune in fees in the process). You probably don’t hear it enough (especially given all the negativity on so I’ll media) but I would just like to thank you for this as it has legitimately made a huge positive difference in my life. So, thank you!
Thanks, Stevey.
It’s fun the run the site and engage with others – I wouldn’t keep doing it if I didn’t enjoy it!
That said, there may come a day when it’s not fun or as fun and time to move on…just not there yet.
Similar journey…mutual funds, etc. and then I got “smart” per se in my late-20 and earl-30s whereby I figure nobody would care more than I would about my financial independence. I can’t imagine not being a DIY investor.
I sincerely appreciate your kind words and follow.
All my best back and write/comment whenever.
Mark
Hey Mark,
You asked: “I continue to use 3% sustained inflation for our own spending and inflationary projections as we approach retirement in 2026. What do you use?”
In my own decumulation spreadsheet I have it set to 2.25%, with annual return set to 6.63%, so net growth of 4.38%. I feel like that’s okay.
When I use mayretire.ca I currently have it set to 2.75%. I play with it a lot but overall it looks like my plan is safe as long as it doesn’t go over 3.25%.
We will need to replace a car perhaps as early as next year. My philosophy will be if we can get a loan below 3% then we will take the car loan, and likely make some extra payments along the way. If the rate is higher than that then I’ll be thinking about selling some holdings, but will also have to take into account capital gains that will result. In my case, the holdings that I can tap into from my non-registered account are +43% – suggesting I’d pay about 10% in taxes – I will have to do some math to determine a “break even” point compared to a car loan interest rate.
I think anything over 2% inflation is a must, 2.5% is better and 3% is higher certainly not unrealistic these days…
I’m also very pessimistic about the next decade or so of returns so I also use 5% annualized for that. If I get more, like 20% this year, well, that’s a HUGE bonus. 🙂
Got any investing plans for 2026? I can appreciate a car is expensive…
Cheers,
Mark
My investing plan is to buy more Aecon (ARE). I forecast they will have an outstanding year and once they hit my targets I will rebalance the portfolio. I’d like to add more PPL and perhaps add one more
Bank.