Despite being a small account I have some miles on these legs. I am the father of a college age girl. Lately, my daughter has been getting some poor investing advise from her equally inexperienced male friends. Her friends are like a lot of people on Hive who deal out bad investing advise. And to be fair, it's not just Hive. The entire crypto community is plagued with shitty advise. This is masked with the "Do Your Own Research" mantra. These "influencers" are basically saying I'm not giving advice, but follow me, however do your own research so you can't sue me...but most importantly follow me.
My daughter's friends are telling her to put her money in to crypto and stocks. This itself is not bad advise. However, they're just regurgitating what they read on the internet.
So, my talk with my daughter went like this. She tells me her friend told her to take her money out of her savings account and put into an ETF. She's worried, because she doesn't know anything about ETFs, or stocks, or crypto. I ignored that last part and asked her how far into the book on budgeting her mom and I asked her to read. She confessed that she didn't even get past the first page. I said okay, I'm not mad at that. But you still need to know the basics of personal finance before you even think about investing. If you don't, you'll always be poor.
My daughter works a part time job. I told her to write down how much she currently has in her bank account. It was not that much. I then asked her to figure out how much she made over the last year. And include her tax refund. The number was well over what she had now.
I said let's take a look at this. We don't make you pay any bills, and you don't have a car payment. We make you pay for your own gas but not anything else. Let's figure out what you're spending your money. It turned out she spends 99% of her money on eating out, make up, and buying presents for her friends.
I said I'm still not mad. But you now must understand why your friends are giving you bad advise.
It takes money to make money.
The internet is filled with stories about instant billionaires who got rich quick. This is unrealistic, and you will end up miserable and poor if you chase this fantasy. You don't know how to budget, so realistically, you have nothing to invest. You could have money to invest. But you're spending it all on good times. I then explained to her the importance of creating a budget, tracking her expenses, and setting goals.
It's the hard stuff people don't want to do that makes a difference.
