Who wants to be a millionaire? Jokes about the early 2000s quiz-style TV show aside (#throwback), we talk to a lot of clients who have this goal. One million dollars. Or two million dollars. Besides going on the show, yes it is still running (what!?), do you have a desire to be a millionaire? How achievable is this goal for Millennials? How do you know if you’re on track? And does our social media saturated world make it harder or easier than it was for our parents?
Social media can be tricky. And you might think that we are here to tell you it’s terrible and has no place in your financial life. Nope. Not us. That simplifies things way too much. Social media can also help you get your financial sh*t together, if you know how to leverage it for your benefit, and avoid some of the pitfalls it can present.
So, if one of your goals is Millionaire status, here are the pros and cons of social media.
Pro: Information is Easily Available
Social media makes it easier than ever to share information. Yes, the internet made info super accessible, and you can google anything and everything (though some things really shouldn’t be googled, as we all know from personal experience), but social media takes it to a new level. We can now access the information of our friends and mentors and crowdsource opinions and input on just about anything within seconds. The bigger your following, the more information you can get with ease.
What people post on social media is their highlight reel, and may not actually be real at all.
Sarah Fallaw, the co-author of The New Millionaire Next Door discusses this in both her book, and a recent appearance on the fantastic podcast So Money. Her father, Thomas Stanley, wrote one of our all time favs when it comes to finance books: The Millionaire Next Door over 20 years ago, and Sarah has given it an update, keeping in mind the challenges and resources available to the aspiring Millennial Millionaire. In the episode she talks about how social media can be a great resource to learn about how others are building wealth, for instance, the retire early community. “That’s a great way to learn different tips and tricks and kind of lifestyles that it would take to become wealthy. I think there’s a lot of sharing out there that’s really useful.”
Hot tip: Are you a podcast fan? We totally recommend checking out not only this episode of So Money, but also Episode 900, which features our very own finance guru, Stash Wealth CEO, Priya Malani.
There’s a mini con hidden in this pro. Just because there is more information doesn’t mean it is always better. Social media can make it hard to vet your sources, and sources are important. Make sure to look into who is giving the advice you are getting. There are a lot of bad money blogs out there.
Con: Constant Comparison
As Sarah notes in her interview on So Money, comparison isn’t anything new. We’ve always looked to those around us to set a benchmark of where we want to be, where we can be. However, social media makes that comparison constant. We don’t have to walk out our front door or even look out or window to see how well people are doing, or at least appear to be doing. And this doesn’t stop with our friends or celebrities. We know we follow strangers on the internet because we love their #aesthetic.
The best way to combat this comparison carnival is to remember your goals. What people post on social media is their highlight reel, and may not actually be real at all. You already know this, but it is so important that you remember to put things in perspective as you set financial goals. Sometimes you gotta put on some blinders, and social media is not exactly blinders-friendly.
According to The Next Millionaire Next Door, millionaires are actually pretty frugal, statistically speaking. Remember that when you are scrolling through endless pictures of trips to Tulum and $500 sunglasses. Note: This doesn’t mean millionaires never splurge. Sarah’s talking stats, and the numbers show that when you look at averages, millionaires are way more frugal than you’d expect them to be. Not so fun Stash Wealth fact: We don’t like taking on clients in their 40s. This isn’t because people in their 40s aren’t awesome, it’s because we don’t like delivering bad news. The facts are that the sooner you get your financial sh*t together, the less you will need to compromise. Getting distracted by social media can make it even harder to stay focused, but we believe in you!
Pro: Connected to a Larger Network of People
It’s called social networking for a reason. And one of the largest social networks is LinkedIn, a social media platform built entirely for advancing your career. LinkedIn can be just as challenging as Instagram when it comes to avoiding comparison. However, all social media platforms can be leveraged for creating opportunities, particularly LinkedIn.
Think of all the people you are now able to keep tabs on. Where have they gone? What are they doing? What skills have they gained? How can you leverage those connections for a new job, new skills, and new opportunities?
Facebook has also become a great resource for job searches. There are groups dedicated to helping you find a job, particularly if you’re a woman and/or POC. Find the groups that want to help you succeed and take advantage of them!
Con: Ads, Ads, Ads
Advertisements on social media are getting harder and harder to ignore, partially because they are getting harder and harder to spot. As personal branding becomes sponsorable, it can be nearly impossible to tell when something is being advertised to us, even with #ad thrown into the 75 other trending hashtags.
And it’s not just about the sneaky ads, the obvious ones also drive us to buy more than we would if we had never been marketed to in the first place. As we scroll and click more, the algorithms also get better at serving us ads for stuff we will like, and the more targeted the ad, the more likely we are to actually want it. With the exception of those creepily specific t-shirts that no one actually wants “I’m a country girl, living a city life, Vermont Forever!” Yeah, no thanks, you left Vermont for a reason.
Creepy targeting aside, one key way to combat social media ads is mindfulness. Sarah recommends this in her book, and we definitely agree with it as a method of blocking out the noise. A thoughtful, intentional focus on your goals can help block out any distractions. Really hold your goals in your mind regularly, take them seriously, and know that you are gonna have to scroll on by some really great stuff, but it will be worth it in the end.
One of the most interesting questions posed by The Next Millionaire Next Door is what are the key traits of Millionaires and have they changed? Turns out there are some traits that have remained consistent, despite changes in social media, rising costs of education and healthcare, and technological advances. Resiliency. “That ability to overcome obstacles,” Sarah states, “tends to be something that again, millionaires really have in spades.”
Our Challenge For You
Are you up for an experiment? We challenge you track the time you are spending on social media (most phones have this functionality built in these days), and then do a quick cross reference with your credit card transactions. Are you spending more on days you are online more? This doesn’t need to be super scientific, just check in. The more you know about your online spending behaviors, the more agency you have to take control.