My journey through Bubbleville – Pt 2

COMMENTARY | If the Facebook investing groups we covered in Part 1 of this series are testosterone driven homages to raw self-interest, then the Instagram world of "finfluencers" is a polished and beautiful reminder of the power of image based marketing.

Viewing investing through an instagram filter

“Desire just cheats you. It’s like a sunbeam skipping here and there about a room. It stops and gilds some inconsequential object, and we poor fools try to grasp it--but when we do the sunbeam moves on to something else, and you’ve got the inconsequential part, but the glitter that made you want it is gone.” (F. Scott Fitzgerald, The Beautiful and the Damned)

I entered the world of finfluencers with an open mind. They have a veneer of respectability and promote the transformative and empowering nature of saving and investing. They largely cater to women - a much needed service for a gender grossly disserved by the financial services industry.

I passionately support the same causes. Plus, I was learning new things. I discovered that a skincare routine was a critical component of my life. Thanks to the finfluencers I find myself slinking into Aesop like a teetotaller at Octoberfest, repeating my daily mantra that I am worthy of positive cash flow and that I will listen to my skin and provide it with love, no matter what. Had I been finfluenced?

Now a year on, I’m singing a different tune. I’m reminded of the Hemingway quote – “If it is all beautiful you can’t believe it. Things aren’t that way.”

Most of the content is feel good and uplifting. A series of mantras and affirmations designed to encourage and support saving and investing mixed with the standard checklist of the millennial good life - some fashion, some skincare, some make-up and a lot of socialising with your friends.

Life in Bubbleville is good and everyone is beautiful and popular. Everyone has taken control of their budget and is on their way to great wealth. Attention is focused on saving and budgeting because investing is easy. Buy an ETF and the next thing you know your home is filled with fiddle leaf figs.

I’m on a call with a finfluencer about doing a joint webinar with Morningstar and I’m barely through my introduction when I’m told that guests pay an exorbitant fee to participate in her webinars. None of which is disclosed to webinar attendees. I want to tell her to spend part of the fee on a textbook so she can stop telling her audience that small cap stocks are anything trading under $5 a share. I repeat a mantra about taking the high road and I politely decline to pay for the privilege of reaching her 18,000 Instagram followers. To help her followers transform their lives, she implores them to repeat their Monday Money Mantra each morning for a week because success grows where attention flows. This week I’m told there is money all around me and I just need to grab it. At least she practices what she preaches. In Bubbleville it is pay to play, and the finfluencers don’t come cheap.

My podcast co-host Shani is fed up. She has seen one too many wildly inaccurate and undisclosed paid posts on Instagram. Shani has common sense. She is knowledgeable about investing and is smart. These are all qualities that don’t matter in Bubbleville. She is posting a comment on the potential tax consequences about using BPAY to make superannuation contributions. The post she is commenting on is an ad. The word “ad” “ is hidden under the logo of the finfluencer that is posting it. I tell her not to do it after my experience with the digital lynch mob on Facebook. She doesn’t care and does it anyway. I stare at my phone waiting for the inevitable abuse but it doesn’t come. Her comment simply vanishes like a blemish under Estee Lauder double wear foundation. In this neighbourhood of Bubbleville, dissent is erased instead of attacked. Anything to maintain the image.  

I’ve been invited to become a “tribe member” in a money club. Diamond membership is close to $1,200 a year but I get access to a side hustle session. I’m thinking my side hustle will be charging people $5 to tell them that unless your portfolio is in seven figures you probably shouldn’t be paying $1200 to learn how to invest. I spent $1200 to learn how to invest once. It was the Chartered Financial Analyst (“CFA”) program. Spending three years of my life studying for nine hours of exams doesn’t sound as fun as taking the fierce financial foundations course. I’m becoming a snob in Bubbleville. I don’t like it. 

I’m shown a meme that tells me that if being stressed burns calories, I would be a super model. I roll my eyes on my way to another lunch with my colleagues where I see this stress firsthand. In Bubbleville, every finfluencer has a perfect life and the pressure to keep up is suffocating.  Finfluencers post their net worth in their Instagram profile. They never make an impulse purchase. They never miss a savings goal. They all own their own homes with no mention of whether their deposit came from their side hustle or the bank of mum and dad. Presenting a life that isn’t reality is eating away at a whole generation. I want to hug my colleagues and tell them that everything is going to be ok. I want to tell them that buying a million dollar house you don’t want in a location you don’t want to live in isn’t making it. I see housing prices going up and my rent going down. In Bubbleville things don’t have to make sense. 

I wake up to the news that I get the opportunity to spend a day in the life of a finfluencer with 97k followers. The cherry on top is the encouragement to “AMA”. That means ask me anything. I wonder how she will respond to me asking if she is serious after every post. Her day is millennial porn. She leaves the apartment she owns and is walking with her well-dressed partner and dog to get coffee. Her dog is at work and playing with her office barista. She works with her bestie. There are plants everywhere. She is drinking champagne and doing a podcast. She is working a 12-hour day and loving every minute of it while reminding her followers how important it is to have a work life balance. I want to ask her why she can’t just tell people that if something is important to you then you should work hard at it. None of the questions are about investing. I learn about her eyebrows (microbladed), how many coffees she drinks a day (3) and how she pays for her life (her partner is ‘supportive’). Nobody asks her why she said on her podcast that you get 11 per cent to 12 per cent a year from a diversified portfolio. In Bubbleville, the teachers are only a couple pages ahead of the students in the textbook and that means that new investors are saddled with expectations that cannot possibly be met. These expectations mean less new investors will stick with it over the long-term. This is the ultimate irony of finfluencers who sell a future transformed by saving and investing to people unlikely to see it. 

A finfluencer who has allegedly amassed a $396,000 portfolio at the age of 24 says they can help me retire early. All I need to do is figure out how much I spend a year and then divide it by 4%. I don’t even know where to start. They are referring to the 4% rule. The rule was developed to solve a very specific problem -- to help retirees not run out of money before they died. The 4% rule was designed to work for 30 years. I don’t need to study an actuarial table to know that is not going to work for people retiring early. Perhaps I should start a side hustle providing career counselling to 54-year old’s that need to go back to work after running out of money. I’m sympathetic they are trying to do the right thing. I’m aghast that people in their 20s and 30s are being told they can retire the minute they can survive on a 4% withdrawal rate from their portfolio.  

I started this piece with a quote from Hemingway and that was deliberate. I think Hemingway would have been able to relate to the world of finfluencers and how projecting and maintaining an image wears at you. This world of budget hacks, checklists, side hustles and keeping score is grinding away at generation anxiety. The finfluencers have created lifestyle brands that are masquerading as investment advice. This only works in Bubbleville. The best description that I heard to describe the current investing landscape used a quote by British poet Thomas Gray who said, “Where ignorance is bliss, ‘tis folly to be wise.” Wisdom is useless in Bubbleville when the answer to every investing problem is going further out on the risk spectrum. Options and crypto are the fastest routes to the good life, even if diversified portfolios apparently return 12 per cent a year.     

I’m staring at a virtual car crash and I can’t look away. I’m flicking through Instagram during another meeting with our compliance team where I’m being told about a change in ASIC guidance that requires us to update our disclosures yet again. I wonder if anyone at ASIC has Instagram. We’ve been banned from using the word expert to describe anyone at Morningstar. Meanwhile, another self-described expert is telling me the key to long-term wealth is to set aside an hour a day for ‘adulting’. Just another day in Bubbleville where everyone’s skin is on point and the Instagram filters are for life.

Thank you to everyone who wrote to me about their own experiences in Bubbleville. I want to hear more. Email me at [email protected]