I lost over $3000 by following the bad investment advice on YouTube

  • After I inherited some money, I turned to YouTube personal finance to learn about investing.
  • There was a lot of hype around stocks like the Tesla and Coinbase IPO, and I felt like I had to jump in.
  • But I have since lost over $3000 and realized I should just watch YouTube for fun.

In 2021, I finally made the decision to become a financially responsible adult by investing and saving for my future. I am a huge fan of learning from people who know more than me about different topics, so I turned to YouTubers for personal finance.

Many of the YouTubers I’ve watched are millionaires, so I assumed they knew what they were talking about. Unfortunately, it ended up losing thousands of dollars.

I was drawn to think that these people were experts

When I decided to start investing, I had thousands of dollars in inheritance, and I didn’t know what stocks to buy. I turned to YouTube for some advice because I’m familiar with the platform. Even though I’m not active anymore, I created my own YouTube channel To more than 80,000 subscribers. YouTube is a great platform for learning, and there are plenty of experts who share their wisdom through educational content.

In early 2021, Tesla stock recently reached all-time highs at around $880 per share, and one family member made a lot of money from that stock. I decided to start from there and equip myself with more information about this stock and see if others think it’s a good idea.

If you write anything related to the Tesla stock on YouTube, you will be drowned out by the content. There are some personal finance YouTubers who devote most of their time to discussing this particular stock. While checking out these channels, I came across a YouTuber who talked about more than just Tesla stocks and caught my eye.

This YouTuber has not only made multiple videos every day but also made a live stream opening and closing of the market. It’s worth millions, it even pays for Bloomberg StationThat’s $2000 a month. With the amount of content this person provided, it was my favorite.

This YouTuber was friends with other personal finance YouTubers, so I started watching their channels as well to find out more. One YouTuber covered the coding, something I was definitely interested in learning more about.

On average, I would probably watch five to six hours of personal finance on YouTube every day. YouTube’s algorithm is designed to recommend similar content, so I’ve had a lot of YouTubers to watch who have covered both crypto and traditional stocks.

My ignorance of the stock market was my downfall

I was hooked on the fact that these guys were richer than me, so I assumed they knew what they were talking about. At this time, I didn’t know anything about financial statements and quarterly earnings or what technical and fundamental analysis is.

When you don’t know what these things are, you’ll be surprised when these YouTubers display numbers and graphs that explain what they mean. Once they told you that they were sure the stock was undervalued and that it was a great buy, I didn’t doubt it.

At the time, I didn’t realize that if the stock market was so easy to understand, we would have so many more billionaires. I didn’t know it’s a known fact that you can’t predict the market. I also didn’t know that many people buy stocks after they have peaked, which is a bad idea.

All of these YouTubers were promoting Tesla stock because apparently it was at an all-time high. As they promote Tesla stocks, they also highly recommend buying in Cathy Wood ETFs, such as ARK Innovation ETF. Wood was seen as a genius for owning a lot of Tesla stock, so it was easy to believe what YouTubers were saying.

The Coinbase IPO is what woke me up of what was going on

Coinbase went public on April 14, 2021. I’ve heard that it’s never a good idea to buy an IPO, but the hype on YouTube was unbelievable. I watched a YouTuber who was making non-stop videos about Queen Piece IPO for about a week before launch. He talked about how he spent hours upon hours browsing through Coinbase’s financial statements and was absolutely positive that the stock was worth about $700 per share. So, anything less than that was a steal on the day of the IPO.

On that day, I remember telling myself several times that I would never buy Coinbase shares. But when the market opened, shares started at $381, much lower than the YouTuber had expected. I still did not buy.

The price went up to $429.54, and I remember thinking how I could make some easy money if I bought on the open market.

When the price fell back below $400, I was watching the YouTuber, decided to buy and was talking about stealing it. I still did not buy.

In the end, it went down to $333 a share, and I thought I’d be an idiot if I didn’t buy. I bought three shares, and I was lose money since then.

In the following weeks and months, I watched this stock drop more and more. I realized that if this YouTuber had spent that long analyzing this company and it was a mistake, he clearly had no idea what he was talking about. Then I realized that none of them did. I started going back to their previous content and followed up on how many times they were right, and it was pretty low.

Of course, professional portfolio managers also get it wrong – again, it’s impossible to predict the market. But the energy and fanaticism about some stocks on YouTube, sustained mostly by investment enthusiasts rather than financial advisors, led me to make an expensive mistake, and I’m sure others have done the same — with a lot of money at stake.

As of today, between Tesla, Coinbase, and the ARK ETF, I lost more than $3,300. I learned the costly lesson that YouTube personal finance “experts” should only watch for entertainment purposes, and that’s it. I can’t help but think that others may have lost a lot by making the same mistake I did.