Mutual funds, cryptos, big spends…the money secrets of social media influencers

They are young. They are smart. They have a voice. And they want to be heard.

Meet the social media influencers. This new breed of entrepreneurs is making big bucks, even while some of them are still in college. Their fan base — judged by the number of followers they have on their social media profiles like Instagram and YouTube — run into thousands, sometimes well over a million. The marquee — or top of the line — influencers in the investor education space command around 3-8 lakh followers on their respective Instagram handles. Masoom Minawala, for instance, a fashion entrepreneur boasts of 1.3 million Instagram followers. Others like Rachana Ranade, a YouTube celebrity, has 2.91 million followers, just on her YouTube channel.

The bigger their fan following and the longer their track record in this profession, the bigger the bucks that they earn. According to industry estimates, top social media influencers can pocket between Rs 2-8 lakh for a 3-5-minute video, many of which require a few seconds’ worth mention of the brand that is willing to pay them.

The question is: What are they doing with all this money? While the financial influencers might be a bit more aware of money matters than those who talk about branding, food, culture, art, fashion, and so on, it’s nevertheless interesting to check out how the influencers manage their own money. How much they spend, how much they invest, do they have an insurance policy, do they understand the meaning of emergency cash, and so on.

Moneycontrol reached out to as many as 20 social media influencers across fashion & lifestyle, entertainment, financial and food & cuisine sector influencers. Only seven of them agreed to speak with us. Why? Here’s the shocking part: Most of the ones who refused to speak with us told us point black they do not handle their own money. Someone else does. That is why, they added, it “doesn’t make sense” to speak with us.

But not all is lost in this entrepreneurial community, it appears, when it comes to handling their own finances, deftly.

 Equities, crypto and bank fixed deposits

 Typically, millennials and those in their 20s have a high-spend lifestyle. Social media influencers are not much different, since they too, typically, belong to this age group. Sonam Babani, 30, is a fashion influencer and luxury content blogger, and has a keen interest in all things fashion. Aiming to be the last word in fashion, Babani spends big bucks to keep up with the trends. She spends nearly 20 percent of her monthly income to buy the latest apparel, bags and footwear. Forty percent goes into investments, including directly buying equity shares. The remaining 40 percent of her monthly income is used for future business spends.

“My husband is obsessed with the stock market; he keeps reading, researching and talking about it. So, I hear a lot about investing, and then make my own financial decisions,” says Babani. That’s the good part. The flip side: No mutual funds for Babani, she takes the high-risk route to investing her money. Babani prefers to park the corpus needed to build her own business in the future, in her bank account, than investing it in liquid funds.

 Big bucks at a young age

 The way social media influencers earn money is like this: They create content around their areas of expertise (fashion, food, personal finance, and so on) and amass a fan following over time. Brands, on the other hand, look for celebrities and influencers to talk good about them. A few seconds’ mention in the video content put out by influencers on their own Instagram or YouTube pages, does the trick.

A popular Bengaluru-based comedian influencer is known to charge as much as Rs 8 lakh for a few seconds’ mention in a short video. A digital content creator who dabbles in acting and fashion is known to charge as much as Rs 4.5 lakh to brands for a mention.

Meet Mumbai-based duo Shyam Sharma and Dhruv Shah, both aged 27. They have a thriving YouTube channel called ‘Funcho’, where they regularly upload satire shorts based on the common man and woman’s everyday lives. The channel has about 32.6 lakh subscribers. Their Instagram handle has over 2.3 million followers.

One of their latest videos on YouTube appears to be a funny take on how some motor workshops fleece unsuspecting customers who come in with their automobiles. A few minutes into the 11-minute video, one of the lead actors, Shyam Sharma, starts talking about a forex trading app where investors can trade in currencies, cryptos and stock market indices. Such branding earns them their big bucks. 

But making big bucks will also bring with it the task of managing it responsibly.

 Friends and family offer plethora of investment tips

 Family and friends continue to play an important role in the lives of many of the social media influencers we spoke with. 

When it comes to investments, they take cues from Shah’s sister who is a chartered accountant. Both Sharma and Shah believe in equity investing.

Social media influencers in the personal finance space come across as more aware of investing avenues and how to manage their own money, comparatively.

Fincocktail founders, Sayali Rai and Niyati Thaker, claim to collaborate with brands and push products that sit well with their investment ideology. Both Rai and Thaker have finance backgrounds. Rai has worked at Citibank before. Thaker, a chartered financial analyst, has worked with ASK Wealth Advisors, one of India’s leading wealth managers. They started Fincoctkail, their social media identity, in 2020.

Both invest in mutual funds. Both talk extensively about mutual funds, the benefits of making regular investments and savings, and create educational content.

 Crypto or no crypto

 The social media influencer community appears to be divided when it comes to cryptocurrencies. Pranjal Kamra, a popular social media influencer and a Moneycontrol.comcontributor, avoids cryptos. Kamra, Chief Executive Officer of Finology Ventures Pvt Ltd, is a known face in the world of financial content creation, also known as ‘finfluencing’.

He is an avid stock market investor and prefers to directly buy shares of listed companies. Kamra recently bought a house almost entirely out of his own savings. “I wanted to buy this house, as the plot holds an emotional value for my parents. My ancestors used to live around here,” he says. As a result, around 70 percent of his net worth now lies in his newly-purchased home; the remaining 30 percent lies in his existing equity portfolio.

The Fincocktail duo invests up to 5 percent of their earnings in cryptos. “We think cryptos might be a more widely accepted investment avenue in the future, but you can’t ignore the risks. We only invest in it as much as we can afford to lose,” says Rai.

Babani, on the other hand, likes cryptos. Being in the fashion industry, Babani sees how Bollywood celebrities have warmed up to cryptos and non-fungible tokens. “I definitely feel that cryptos could probably become a big part of our future. A number of luxury brands have started accepting payments in crypto. So, that is one reason I have been looking at investing in crypto because at least in my field (fashion), it seems to be accepted,” says Babani.


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