Dear reader, if you have paused the scrolling on your social media app and are reading this, we can say with confidence that in some way or the other you too have been affected by what we have to talk about today.
A young student from Jaipur, Gaurav, was swept off his feet when he read about “CRYPTO” a few years ago. Like many Indians, he too fell for something off the internet. A viral “Finfluencer,” who raved about sky high returns in crypto and pushed a platform called Vauld. Gaurav invested Rs 60,000 into Vauld in 2022. Imagine a student and Rs 60,000. The markets tanked and Vauld blocked all withdrawals.
Sandeep, an equity research analyst from Hyderabad, got a message in his Instagram DMs, which pushed a Telegram channel for “Daily stock trading tips.” He joined it, worked on the tips, and saw small profits initially. And then everything went downhill. He had put in over Rs 2.5 lacs from his father’s provident fund, which vanished in a matter of days, thanks to the ZERO researched tips on the telegram channel.
There are countless such examples where young Indians fell for such scams. But there is something common amongst them.
The Connecting Thread – The Algorithm
What is common between the stories we shared above and the countless others where Indians lost a lot of money?
The Algorithm!
Now, before I say more, let me be very clear. The internet is not all bad. Social Media platforms are not all bad. Stock investments are not all bad. Crypto is not all bad. There are people who have earned millions thanks to these sources, and that too in a legitimate way. The problem lies elsewhere.
You see, when you are scrolling on any social media platform, your activity is recorded. Every single microsecond of it. What you watch, what you read, how much of it you watch or read, what ads you show interest in, what pages you surf, where you shop from, what do you shop for, what time you shop at mostly, who all you shop for… I can go on and on, but I guess you get the idea. EVERY. SINGLE. DETAIL.
And what is done with this data? It is used to show you ads for products for which you are a strong potential buyer. And the more interest you show in some type of ads or products, the more related content, and ads you see.
And how do you think the ads are served to your feed? The very same recorded data is used by companies and individuals, threaded into the algorithm, to not only cater to your needs, but also to make you believe you need a particular product.
And there is one category of ‘content creators’ if we can call them so, who exploit this for their own solid gains.
The Epidemic of “Finfluencers” – Sucking Your Wallets Dry
Finfluencers are what in today’s world are called social media stars. They are a subcategory of “Influencers,” who specialise in the financial field. Hence, they are called Finfluencers. You will find them everywhere! YouTube, Instagram, Snapchat, Facebook, Hinge, Bumble… Literally everywhere.
And they have one core qualification or quality in common – a huge following. Following is social currency. The more you have it, the more people respect you and trust what you say. So, when young Indians see any finfluencer with millions of people following, the trust is established without due diligence.
Forget the need for a degree in finance, commerce or any related field, or any certification from regulatory bodies like SEBI or BSE. And don’t even mention the need for some practical experience. Most give out financial advice with no care or concern for the viewer. Their only goal is to make money. Period.
In most cases, the ones who end up making money from their advice is, not surprisingly, them. Let me explain. Like in the case of Gaurav we saw above, it would not have mattered if the markets rallied. It was Vauld that allegedly turned out to be a scam. And how did Gaurav get to Vauld? Because some Finfluencer with a huge following promoted the app, promising the prospects of huge returns. We know what the result was.
Let us break this down – Vauld finds a finfluencer with a huge following, offers them a big fixed “Remuneration” plus commissions on each new client onboarding. The Finfluencer in turn goes all guns blazing to promote the platform, also adds a promo code to get flat discounts, all while promising the potential for astronomical returns.
The finfluencer’s millions of followers see this ad multiple times across social media platforms, fall for it and sign up, finally adding thousands and lacs of rupees on the platform for trading. The finfluencer often gets a commission for every new onboarding (bet you did not know this!). In some cases, a percentage of the money they add in their platform wallets as well. Imagine someone with 2 million followers or 20 lacs. Even if 0.1% of this number converts hypothetically, that is 2,000 new signups for the platform.
Assume a Rs 500 commission per new onboarding, the overall commission comes up to Rs 10 lacs. That’s over and above the fixed pay and the percentage of the wallet money. Of course, the components of the deal would vary greatly from person to person. But again, you get the idea. The finfluencer has multiple revenue streams. You, on the other hand, have just one – often motivated, often shallow, but rarely legit, financial advice.
A March 2025 report by the CFA Institute of India says “Only 2% of influencers are SEBI-registered, yet 33% provide explicit stock recommendations. Additionally, 63% of influencers fail to adequately disclose sponsorships or financial affiliations.
They target young Indians because they are hustling hard to make some money and get to financial freedom quickly (another finfluencer peddled idea). And are also mostly clueless about how finance works. As per NSE data, less than 27% of Indians under 30 even know the basics.
Remember, most Finfluencers are not here to make you rich; they’re getting rich off you.
But how do you separate the bad ones out of the lot.
Don’t Get Carried Away – Red Flags That Scream “Scam!”
You see, while the entire lot might not be bad, the overall lot is growing by the minute. In the words of Andy Warhol, “In the future, everyone will be world-famous for 15 minutes”. Eventually, some of them will tread on the same path. You must understand that’s how the basic business model works. We don’t blame your favourite cookie brand for selling refined flour biscuits laden with palm oil and refined sugar, do we? Till there are buyers, businesses will keep producing the product.
Look for the Red Flags as soon as you feel the urge to trust the next finfluencer. Remember, you just have to avoid the bad apples.
Red Flag# 1 – The Flashy Hook Lines
You have seen it without a doubt. The reel screaming, “How I turned Rs 50k into 5 crores!”. Or about the race to make 10 crores before you turn 30. It’s pure FOMO bait, with some finfluencers flexing luxury cars and international vacations. They promise guaranteed returns, crypto jackpots, or quitting your job by 30. Sounds all cool, but it’s a scam buffet. RBI reported billions lost to frauds in 2025, mostly by millennials chasing such hype. Remember Sandeep who lost Rs 2.5 lacs?
Red Flag #2 – Lack of Credentials
The next time you see a finfluencer selling something or imparting financial “wisdom”, try and find out his qualifications. Does he have a BSE Certification? A SEBI registration? A finance Degree at least? Something? Most cases they don’t. By law, you are not allowed to give stock market tips to the masses without SEBI’s nod. So, lack of valid credentials is a big red flag.
Would you take medical advice from someone who has a degree in Performance Arts?
Then why take financial advice from someone who has no supporting education at all?
Red Flag #3 – The Affiliate Link
This is most simple to catch. If all their “tips” lead to a link which in turn leads to a sign-up page to some service of the other, it would be a wise decision to turn around and start running. Often, these are the same deals we discussed earlier. More about their wealth building than yours.
Red Flag #4 – Keeping “Risks” at Bay
Have you heard this line: “Mutual Funds and Stock investments are subject to market risks. Read all documents carefully before investing.” I am sure you have! The ones who know their game, don’t shy away from highlighting the risks. If the reel or short has no mention of risk, stop! There is no mention of risk because they probably don’t understand the risks themselves. A finfluencer who understands risks, the importance of saying them aloud and that it is mandatory to do so, could be someone you might want to follow.
If you can spot these red flags, consider yourself halfway to bulletproof.
Want to keep your money safe and still chase those dreams?
Here are some real tips to try and achieve that.
- Get Money-Smart First: Hit up free resources like NSE or BSE guides. Knowledge beats a scam every time. The regulatory bodies have a ton of educational initiatives with them.
- Look For Credentials: Verify advisors on SEBI’s site. They have a list of registered Research Analysts and Investment Advisors
- Start Small, Stay Cool: Test investments with pocket change. Track results without losing your cool.
- Call Out the Bullshit: See a scam? Report it to SEBI’s SCORES or RBI. You’re saving others too. That’s the least we can do.
- Question Everything: If it sounds like a Bollywood plot, it’s fake. Poke holes like a pro. Remember, if it sounds too good to be true, it probably is false.
- Maintain a Healthy Scepticism: Do keep their social media handles handy. Listen and note what all you want, but with the above pointers, cut out the noise and bullshit. Don’t start worshipping every word your favourite influencer says. You really think Ajay Devgn eats Vimal or Shahrukh drives around in a Hyundai?
Be The Only One to Influence Your Money
Once you are good with the above, plan for the long term. Read about Indian Warren Buffetts like Nemish Shah, Rakesh Jhunjhunwala, Radhakishan Damani, Mukul Agarwal etc.
Most of all, read about the real Warren Buffet and his legacy.
Crorepati by 25? No, aim for freedom by 45 with the 50/30/20 rule: half on needs, 30% wants, 20% savings. Don’t forget to create a cash cushion – 12 months’ expenses at the minimum in a solid and safe bank account or liquid fund (ones that don’t take any risk).
Have patience, Warren Buffett made 80% of his $130bn net worth in the last 10 years. That’s the beauty of compounding. Just Rs 5k a month in SIPs at 12% could hit a crore by 45. The next crore will come about in less than 6 yrs!
Start early, win big.
Remember, it’s like cooking a killer biryani… Slow, steady, and worth it. The process might be tedious, but the payout makes it worth everything.
The purpose of this article is only to share interesting charts, data points, and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
Suhel Khan has been a passionate follower of the markets for over a decade. During this period, he was an integral part of a leading Equity Research organisation based in Mumbai as the Head of Sales & Marketing. Presently, he is spending most of his time dissecting the investments and strategies of the Super Investors of India.
Disclosure: The writer and his dependents do not hold the stocks discussed in this article.
The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities or other related investments of issuers and/or companies discussed therein. The content of the articles and the interpretation of data are solely the personal views of the contributors/ writers/authors. Investors must make their own investment decisions based on their specific objectives, resources and only after consulting such independent advisors as may be necessary.