Barefoot Investor: Don’t take investment advice from Alec Baldwin

Wall Street has dreamt up yet another way to screw young people, using two things they’re addicted to: gaming and sports betting.

Don’t take advice from Alec Baldwin, warns The Barefoot Investor.

You’re interested in the stock market, right?

It seems like everyone is right now … especially young people who’ve watched the recent saga of Reddit traders taking on the big hedge funds and making “tendies” (social slang for trading profits).

I know what you’re thinking.

You’re thinking, “I sure want some of those chicken tendies (or whatever the kids are talking about), but I don’t really understand the first thing about the stock market”.

Well, if that’s you, famous actor Alec Baldwin has some advice especially for you, courtesy of an ad he was paid to front for the trillion-dollar trading platform eToro.

Baldwin’s ad tries to lure young, inexperienced newbies into trading complex investments.

Here’s how it goes.

Actor Alec Baldwin spruiking trading platform eToro. Source: YouTube

Baldwin looks down the barrel of the camera and says:

“Maybe you’re thinking, ‘But I’m just a food blogger, I can’t do this trading stuff on my own’. Well, I’ve got news for you, pal. With eToro’s social trading, you don’t have to.”

Then Baldwin puts on a sock puppet who squeaks: “But sir, my brain can’t handle more than 140 characters! Is there some way you could make things even easier for me?”

Baldwin once again stares down the camera lens and deadpans:

“Well, yes I can. With CopyTrader, you just find a top investor on eToro … and hit ‘copy’. And from then on, whenever they make a trade, you make the same trade automatically.”

Dude, put a sock in it!

What could possibly go wrong with entrusting your money to an anonymous username on a website to trade on your behalf?

Quite a lot actually.

Earlier in the year it was reported that one such “top trader” on a copy trading platform went rogue over a 48-hour period and blew himself up, losing every dollar of his account. And you guessed it: strapped to his mouse were 1,200 young Aussies who copied his every doomed trade.

Fairfax reported that an online support group for these affected traders gave out the Lifeline number for young people who were devastated by the experience.

Alec Baldwin in an ad for etoro investment app.

Okay, so let’s put old Alec’s smelly socks away, because there’s a bigger game being played right now:

Wall Street has dreamt up (yet another) way to screw people.

This time it’s young people.

They’ve taken two things that many young people are addicted to: computer games and sports betting. And they’ve combined the two … and created apps that turn the stock market into a computer game.

On one millennial trading app, digital confetti falls when you make your first trade.

Another nudges you to make more trades.

And, as our buddy Alec Baldwin explains, on eToro you can even get a “cheat code” and piggyback off the, errr, “best” players #liveathomewithmymum.

It feels just like a game. And it kind of is … if the game is at a casino.

Just like a casino, the pros know that the more bets (or trades) you place, the more they can screw you.

In other words, the more you trade, the more you lose.

Especially if you’re taking advice from a sock puppet.

Listen: if you really want to make tendies, and stick it to Wall Street, let me tell you a simple way to do it.

Don’t play their game. Buy an index fund, put it in the bottom of your sock drawer, and never sell it.

Tread Your Own Path!

ING have started to play silly games with their customers and you might be better off with UBank, Up, or even ME Bank.

ING MAKES LIFE DIFFICULT

Hi Scott,

Today I received an email from ING (I am sure you did too) saying that in March 2021 there would be an extra criterion to meet to get the best interest rates for the Savings Maximiser — at the end of the month your balance has to be more than what it was at the start of the month.

What annoyed me was that it was framed as a great opportunity for customers to save, even though it is clear the bank wants to make more money and pay less interest! I called ING to give my feedback and was told it is what all the banks are doing. Is that true?

Full disclosure: I am someone who will be disadvantaged by this for a time as I will be going on maternity leave. We have saved hard into our “Fire Extinguisher’”account to cover the period I won’t be working. We won’t be able to save more during this time, meaning we won’t qualify for the best interest rate. Maybe I am getting more worked up over this than I need to be, but I would appreciate your perspective!

Bec

Hi Bec,

This move by ING reminds me of a girl I once dated at uni.

When we began dating, things were simple, open and transparent. Yet it got way more complicated as time went by …

“Are you going to the pub to avoid me?”

“Don’t you dare pat my cat like that.”

And my favourite: “What do you mean when you say ‘good morning’?”

In the end, there were so many emotional hoops to jump through, it all became too freaking hard.

ING is fast becoming like my ex-girlfriend.

I was attracted to them because of the simplicity: they paid a leading interest rate, with no fees. Unlike other offerings, they didn’t play those teaser rate and “bait and switch” games.

Well, until now.

Their marketing guys have obviously decided they’ve got enough customers, so from March 1 they can afford to burn off a few, and trust the majority will stick.

So, Bec, I called up ING and spoke to them on your behalf.

They told me they plan on paying a higher rate of interest than they are now (though they wouldn’t confirm how much it would be).

They also said, “You know, Scott, technically you could transfer a single dollar and still get the interest”.

Yet that just gave me flashbacks to my uni dating days.

I mean, why make us jump through hoops? We’re already going steady!

So, Bec, what to do?

Well, many people may be better off with ING’s higher rate. But in your situation you’re probably better off with UBank, Up, or even ME Bank, who don’t (yet) play these silly games.

YOU JUST LOST ANOTHER FOLLOWER, BAREFOOT

Scott,

I just read your latest column about the camping trip with your sons. Okay, I am kind of embarrassed that it seems it was an “All MALE” trip, so you have inadvertently lost another follower. So sad that you will be remembered as the smelly old goat who couldn’t cook!

Bronwyn

Hi Bronwyn,

I’ve decided to print your question for two reasons.

Firstly, I want to give people an insight into what it’s like writing for a mass audience.

And it’s not just you, Bronwyn. The PC-police are ready and waiting for me each Monday to tell me just how offended and outraged they are. It’s never-ending.

Secondly, if that’s the one thing you took out of my column — that you were embarrassed — then maybe you should get off the interwebs, stop emailing strangers, and go camping with some people you love. I heartily recommend it. And so do my boys!

Shout out to a really great initiative that’s close to my heart: the Kids News Bushfire Poetry Competition. They’re calling for poems on the fires by young people. The winners will be featured in a book on the Black Summer fires of 2019/20. Check it out at KidsNews.com.au website.

DISCLAIMER: Information and opinions provided in this column are general in nature and have been prepared for educational purposes only. Always seek personal financial advice tailored to your specific needs before making financial and investment decisions.

If you have a money question, go to barefootinvestor.com and #askbarefoot.

The Barefoot Investor For Families: The Only Kids’ Money Guide You’ll Ever Need (HarperCollins) RRP $29.99