The Impact of Influencers on Youths’ Financial Decisions

This article was last updated on March 11, 2024

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The Rising Trend of Investment Advertising on Social Media

Based on research conducted by Wiser in Money Affairs, an initiative by the Ministry of Finance, it has been discovered that a substantial two-thirds of young individuals are swayed by social media ads touting the allure of prompt wealth generation. This survey involved the analysis of more than 1,000 youths ranging from 16 to 19 years old. An overwhelming 98% of these participants observed posts regarding investments in cryptocurrencies and shares on their social media feeds.

Christian Meijer, a representative of Wiser in Geldzaken, notes that these investment opportunities are frequently depicted as simple avenues for substantial earnings, creating a perceived “win-win scenario”.

The Outcome of Influencer-Promoted Investments

From the group of young people who have heeded the financial advice of influencers, 39 percent have reported making profits from their investments. However, money can be made from investing, but often no attention is paid to the risks. Meijer pointed out this imbalance, expressing concern over the lack of risk awareness propagated alongside these investment strategies.

Financial Risk & Social Media Influence

Wiser in Money Affairs research indicates that 30% of youths have experienced financial issues as a result of following the advice of social media influencers. Meijer also observes that the intensity of target marketing to young people has significantly increased in recent times. “Young ones used to see ads on a bus shelter routinely, but nowadays, they can’t escape advertising onslaught, persistently finding them via their smartphones.”

Meijer also notes a tendency for these influencers to downplay the value of traditional employment, asserting that financial independence can easily be achieved, thereby making “working for a boss” unnecessary. According to the conducted study, youths engaged in part-time work displayed less susceptibility to these financial influences compared to their unemployed counterparts.

Amenability to Financial Influences Among Employed and Unemployed Youths

It is moreover important to shed light on the lesser-known yet significant differences between the financial choices of working and non-working youths. Data from the research by Wiser in Geldzaken indicates that young people who have part-time jobs tend to display more resistance towards the financial influence of social media influencers. This underscores the importance of employment, even part-time, as a means of fostering informed financial decisions.