What I learned from a year of watching bad financial advice on TikTok
vice.com
vice.com
The key to the success of this video (and others) was that the presenter was nothing more than a salesperson, not for the product they were talking about, but for themselves.
They're trying to sell themselves as experts, and if we're not careful, we end up trusting them and paying (with our time).
I got duped, but it's a continual arms race between viewers looking for useful content, and facile content creators trying to game the system by imitating the hallmarks of great content without any substance to back it up.
I feel like this is the inevitable result of video content having a lower entry bar than written. And even when writing's bad, it's more immediately obvious.
It depends on what people mean by "hardware". If the hardware is comparing something like graphics cards, then yes, text content with table of performance numbers and some charts is faster to parse.
But if the hardware is more physical hands-on like mechanical tools, drones, grills, etc, videos of people demonstrating its use and/or reveal the flaws is easier and faster to digest. ("Picture is worth a thousand words.") E.g. a Youtube video comparing a bunch of miter gauges is better than a magazine article that's just text and photos. Text+photos is too static so the reader can't see and hear the slop in bad products that machined are out of tolerance. Conveying that type of quality is more effective in videos.
If you're viewing Youtube on desktop instead of mobile, the fastest way to to skim is to press the keys 1 to 9 on the keyboard which jumps to timeline at 10%, 20%, 30% ... 90%. There's latency for 2160 4k 60ps videos but for lower bandwidth videos, it works well. If the video looks good, press 0 to rewind to the beginning.
I guess this is what the Internet has come to.
I'm sure you can get quality information on YouTube and even TikTok, but it's likely to be buried under all the highly ranked LikeAndSubscribe spam. That's the problem the interviewee in the article points out:
> What's really sad about all that—in my opinion—is the way that the algorithm works on TikTok is based purely off of views and likes and comments. It's not based on actual good information. The people who post good information don't get a lot of views. It's the people who post ridiculous stuff that get a lot of views.
Curation based on popularity doesn't work, and we seem to fail to learn this over and over: Media content likes, product reviews in online stores, star ratings in app reviews, upvoted/downvoted comments. You can't crowdsource quality--you can only crowdsource popularity. And as soon as you introduce an algorithmic black box, you are handing the top spots over to whoever can game the algorithm the best.
Oh, and if you like this comment, remember to smash that upvote button!
why do I think this? because the individuals and groups that control the financial market created it in such a way that they can make money from it. they make a lot more than me, but I can still hitch my cart to their engine and go along for the ride.
barring some huge financial collapse of global proportions, the likes that have never been seen except for maybe the bronze age collapse, or fall of the western Roman empire, I'm comfortable knowing that the assets I purchase today will be worth more in the far horizon (even adjusting for inflation) that they are today.
Treasury bonds rates are low (especially once you consider shadow inflation), inflation is fairly high atm. Where can investors park their money for some return above inflation?
Lots of cities are having a high percentage of homes being owned by mega-corps.
Also, in 2018Q4, the S&P 500 drew down by 20%.
Per Adams: DON"T PANIC.
One important bit is how the guy working in investments keep his money in ETF. I was lucky enough to work in the Silicon Valley 10 years ago and have colleagues that knew about ETF and explained them to me. It took me still 8 more years to understand fully what they are and open an investment account and buy one. ETF are quite well-known in the US but scarcely known in Europe, at least in my social circles.
Most of the people I know in Europe doesn't know about ETF and only invest in it's mortgage of the house where s/he lives. They only know about Real Estate and as soon as you speak about ETF they think you are preaching some get-reach-money-scheme and they ask you stuff like:"Ah so I should buy a lot of gold OR bitcoin?"...mmm...NO...do not buy a lot of gold and crypto...buy ETF which are diversified group of stocks to have a diversified investment.
FEW TIPS FOR WHO DOESN'T KNOW WHAT ETF ARE:
1) research passive investing with ETF
2) DO NOT TRY TO BEAT THE MARKET: The chances you are the smartest person on the planet and have incredible financial ideas that no-one else had are practically 0 and even financial geniuses get it worse than just buying a little bit of everything after a couple of years.
3) BUT Warren Buffet did it! Warren Buffet is not just an investor. He's a business man, he got down in trenches many times to save up companies. He created value as war-time temporary CEO.
4) do not invest with Robinhood/Etoro, get a investment bank that has been around 10-30 years but not a dinousaur. https://www.interactivebrokers.co.uk/ is available in many countries.
5) Start by buying only one ETF of a very generic market index with the lowest fees. For example MSCI World.
6) Do not buy ETF of niche sectors because they are just not diversified and you might as well just buy stocks and gamble.
7) Do not try to time the market. Just keep the ETF and instead of wasting time buying/selling stocks spend time working as an employee or startup founder.
8) People that tell you that they make money daily-investing should be taken as serious as professional poker player (to be clear both daily-investing and poker playing are NOT profession but just pure gambling and luck. The Casino always wins in the long run. Find something you love that creates value and do that.).
My assumption is that it is an Exchange Traded Fund (ETF)
TOP 10 CONSTITUENTS APPLE 4.44% MICROSOFT 3.28% AMAZON 2.69% FACEBOOK 1.22% TESLA 1.16% ALPHABET C 1.08% ALPHABET A 1.08% JOHNSON & JOHNSON 0.85% JPMORGAN CHASE & CO 0.77% VISA A 0.64%
There are 2 types of pensions funds essentially.
1) The ones that do not save money. You pay pensions taxes now that just go to pay the people retired today. Believe it or not the vast majority of governments pension funds are like this. In Italy it's like this. You IRPEF money doesn't go in an investment, it pays the retirees of today. Now just wait and see what we'll happen with life expectancy increasing and population reduction.
2) The ones that buy things for you. And guess what they buy: usually 3 bonds and 2 ETFs. And they will take 1-2% for that. And you might think: "oh but 1-2% I can give awayt if I do not have to care about anything". In practice though ETFs return 5-8% per year when kept for decades and the earnings are averaged. So the pension fund takes 1-2% from 5-8% which is 20-30%. On top of that there is compounding interest. When you will have retired it's likely you will have given away half of your savings to the company managing the pension fund/retiring plan.
Watch this video from Last Week Tonight with John Oliver that explains the last concept very well: https://www.youtube.com/watch?v=gvZSpET11ZY
AS USUAL, DO NOT JUST TRUST ME, RESEARCH WHAT I SAID (AND NOT ON TIK TOK)
I did and I found out they just buy 3 bonds and 2 ETFs. Very standard stuff. You can learn enough about bonds and ETFs to buy them yourselves and literally save HALF of your savings at retirement time.
Most of personal finance can fit on a very small piece of paper. While the advice is slightly US-centric, I think it's fairly universal (it works for us Canadians):
The original index card, pictured above, has:[9]
1. Max your 401(k) or equivalent employee contribution.
2. Buy inexpensive, well-diversified mutual funds such as Vanguard Target 20xx funds.
3. Never buy or sell an individual security. The person on the other side of the table knows more than you do about this stuff.
4. Save 20% of your money.
5. Pay your credit card balance in full every month.
6. Maximize tax-advantaged savings vehicles like Roth, SEP and 529 accounts.
7. Pay attention to fees. Avoid actively managed funds.
8. Make financial advisors commit to the fiduciary standard.
9. Promote social insurance programs to help people when things go wrong.
For Canadians: 401(k) ~ RRSP, (Roth) IRA ~ TFSA, 529 account ~ RESP.
The 20% seems high, (retired) actuary Fred Vettese recently came out with a good book, The Rule of 30:
> Easy: Save an amount equal to 30% of gross income, minus the amount you are paying towards a mortgage or rent, minus extraordinary short-term expenses like daycare costs.
> The rule aims to strike a better balance between competing financial priorities. It also makes it easier to decide how much to set aside each year, and is more realistic and achievable than saving a flat percentage of pay, especially during the expensive childcare years.
> This is all about consumption smoothing – not depriving oneself of a standard of living during the years of juggling competing financial goals. It backloads the high savings rate to later years when childcare expenses are long gone and the mortgage or rent payments make up a much smaller percentage of your gross income.
* https://boomerandecho.com/the-rule-of-30-book-review/
Also, there is some 'rule of thumb' floating around that says who need 70% of your pre-retirement income. This is inaccurate as Vettese and others show:
* https://findependencehub.com/qa-with-author-david-aston-abou...
* https://pmac.org/wp-content/uploads/2014/05/07-02-series-ari...
If during working life you had/have a mortgage and kids, you may only need as little as 40%. MacDonald has published a bunch of research on this:
* https://www.soa.org/globalassets/assets/library/newsletters/...
* https://econpapers.repec.org/article/cupastinb/v_3a46_3ay_3a...
The median individual income in the US is about $36k. Maxing out just a 401k is about $20k.
> But seriously, his advice has little to nothing to do with how he retired early. The reason his advice misses the mark is simple:
>> All the expense tracking and goal setting in the world cannot make up for an insufficient balance.
* https://ofdollarsanddata.com/the-biggest-lie-in-personal-fin...
But we're on HN, so I would hazard to guess most folks reading/posting around these here parts have higher-than-average income.
They totally forgot, pick the right numbers at the lottery and always bet on the winner.
I know there is a YouTube series from renowned lecturers that discuss the same concept, but sadly can't find it right now.
The problem is that any instrument being introduced could be abused for censorship as well.
As much as I would like to have some things in place to counter the amount of BS in social media or on YouTube I fear it would backfire.
I think much would be gained if the platforms dismantled their algorithms optimized for engagement that lead people down a rabbit hole of more extreme content. Because in the end statistically this leads to more ad revenue from more clicks.
I found the lecture on YouTube [1]. The lecturers made a book from the lecture [2].
[1]: https://youtu.be/A2OtU5vlR0k [2]: https://www.callingbullshit.org/
In topics like science, the 'when' also matters because what we consider facts can change over time as more studies are done.
If so you will need a massive and bipartisan political effort for it to be so, at least in any US jurisdiction.
It's not possible logistically or politically. Assuming we're talking about the USA, any such body would likely end up as a federal agency, which means it would turn into a political football whenever administrations change over. Each administration would have its own personal approach to the fact-checking, which means that even if you trust politicians (lololol), the fact-checks wouldn't be consistent.
The only way to avoid this would be for Congress to be really specific in drafting the legislation, but Congress has incentive not to touch the topic.
Also, what is a fact? Who determines it? And: we need unpopular opinions for innovations.