While the following content is intended to be educational, it does contain promotional material for Kaldi.

There is a person on your For You page right now who is 24 years old and already retired. They live in Lisbon or Chiang Mai or somewhere with good lighting for filming. He has the lethal combination of a ring light, MacBook and  a great deal of confidence about what you should be doing with your money. They have 340,000 followers. They post twice a day.

Here is what they have figured out that you haven't: if you'd bought a specific cryptocurrency in 2019, or shorted a specific stock at a specific moment, or done some particular thing with options trading that they will explain in Part 2 (Part 2 is always behind a link in the bio) you too would be in Lisbon right now, financially free and filming content about how you're financially free.

We’re not going to tell you they’re lying, exactly. It's more that they’re describing a world that existed briefly, in the past, for a handful of people, and presenting it as a reliable map of your future. Which is a bit like a lottery winner making TikToks about scratch cards.

Why the bad advice always wins

The thing about financial content on the internet is that there's a conflict of interest nobody wants to talk about. Content that makes you feel calm and fine doesn't perform. Content that makes you feel like you're missing something, however … now, that is the content people watch and the algorithms love. 

So that's what gets made. Endlessly, in slightly different formats, with slightly different people standing in front of a car they may or may not own.

The algorithm is not trying to make you wealthy. It is trying to keep you watching. These are opposite objectives.

So, I shouldn’t watch finance videos on TikTok?

We’re not saying don’t watch any finance content on TikTok. Just be wary about what you do watch on there. Technically speaking, 10% of the finance content on there is good. Like, good good. From @MrMoneyJar to @penniestopounds, you can get top advice. 

The problem is it often gets swept under the rug for the finance guy living in Dubai, telling you how to avoid paying taxes while also living in Dubai (there’s nothing wrong with living in Dubai. It just happens to be a destination where many of these “influencers” live.)

Who else should I listen to?

The people worth paying attention to tend to be quite dull on the subject. They'll say things like "time in the market" and "don't try to time the market" and you'll glaze over slightly and then a decade later you'll understand what they meant. Warren Buffett, who has spent sixty-odd years being arguably the best investor alive, gives advice that sounds like it came from a slightly cautious grandfather: buy things you understand, don't panic, wait. That's more or less it. 

The truth is that investing doesn't really reward cleverness as much as it rewards consistency. Not dramatic, all-in moments. Just the small, regular, slightly forgettable ones. A bit this month. A bit next month. The cashback from the weekly shop finding its way somewhere useful instead of disappearing. The spare change from a round-up doing something in the background while you're not watching.

None of that feels like progress while it's happening. It feels like nothing, which is sort of the point. The wins are small enough that you barely notice them individually. And then at some point you look up and they've been adding up the whole time.

You don't need as much as you think to get started

People seem to have internalised the idea that investing is for people who already have a lot of money to invest. It isn't, really. The whole point is that you're converting boring amounts (whatever accumulates from rounding up your spending that’s leftover after the bills), into something that works without you having to think about it.

The thinking, actually, is the mistake. The more you're thinking about it, the more you're probably reacting to something, and reacting is likely how you lose money.

Index funds, which just track a large section of the whole market rather than betting on any particular bit of it, have a fairly long track record of being fine. Not exciting. Fine. "Fine over decades" is not a video anyone's going to make. But it's a better outcome than whatever the algorithm is currently trying to get you into.

What to do instead

Start small, and start now. Don't do anything interesting with it. Let the money you'd otherwise not notice, like the spare change and cashback, accumulate somewhere that isn't a current account earning you essentially nothing.

That's it. That's the whole thing. Ignore the 24-year-old in Lisbon. They got lucky, or they make their money from the videos. Either way, it's not a system. It won't make you rich. It will make you feel bad about not being rich.

When you invest your capital is at risk. The value of investments can go up as well as down. You may get back less than you put in. Kaldi offers a low cost way to invest and not personal financial advice, so if you’re unsure whether investing is right for you, it’s worth speaking to a qualified financial adviser.