When it comes to sources of questionable financial guidance online, the first thing that may come to mind is social media.
Indeed, the Financial Conduct Authority issued guidance in March reminding social media influencers that promoting a financial product, without approval from an FCA-authorised person with the right permission, could be a criminal offence.
But it is not just on social media where dubiousness around money exists.
Websites such as lifestyle publications are liberal in their use of the word ‘invest’, where articles bear headlines such as, ‘Five of the sharpest cotton shirts to invest in this summer’, ‘10 classic designer handbags that are worth the investment’, and ‘The best new season jacket trends to invest in right now’.
Of course, language is not a rigid thing, and words can have multiple uses and meanings.
Investing for example, can mean to “put money into financial schemes, shares, property or a commercial venture with the expectation of achieving a profit”, according to Oxford Languages.
Informally, it can also mean to “buy a relatively expensive product whose usefulness will repay the cost”, a definition that lifestyle publications seemingly adopt more than the former.
That is not to say buying material goods within your means should be taboo. Even the ‘50/30/20’ budgeting rule allocates 30 per cent of a person’s monthly income to ‘wants’.
And discretionary purchases such as designer bags have made handsome sums at auction, in some cases making twice their upper estimate by selling for between $20,000 and $30,000 (£15,786 and £23,680).
Nevertheless, when lifestyle publications encourage readers to ‘invest’ in things like clothes and bags, it is not usually with the view that they will actually go on to sell these so-called investment pieces. Instead, the intention is that it is worth choosing more expensive and higher-quality items over fast fashion.
While people do not necessarily read lifestyle publications in search of financial guidance, there should be more care around how the term ‘investing’ is used, when not even half of adults are investing in the strict sense of the word.
Figures from the FCA show that less than two in five adults (38 per cent) held any investment in 2023. The number of new accounts opened by firms offering retail investment services was also generally on the decline between July and November 2023.
Lifestyle content inspires people to make purchases that are regarded as worthwhile, but blurs the line between spending and actual investing.
Terms such as ‘splash out’, ‘splurge’ or even just ‘buy’ would be better, more accurate alternatives to using the word ‘invest’. So ‘Five of the sharpest cotton shirts to buy this summer’, for example. Because are these purchases really funding investment goals, like buying a home or retirement?
That way, perhaps people who probably should be investing more will associate the word ‘investing’ less with spending on material purchases and more with a prudent practice that can multiply their money.
