- Seth Godwin is now a full-time TikTok creator after gaining 400,000+ followers during the pandemic.
- Godwin educates his viewers about personal finance, investing, cryptocurrencies, and much more.
- The 27-year-old gave Insider tips to help young investors build wealth and avoid financial pitfalls.
27-year-old Seth Godwin was working from home during the pandemic, doing the normal nine-to-five for a credit union when he became frustrated with the lack of customer knowledge about basic financial topics.
The Florida native, like many of us, had some extra time on his hands due to the lockdowns, so he decided to start a TikTok to help educate the public about credit, personal finance, investing, and more. Just four videos in, his channel blew up.
“It literally changed my life almost overnight,” Godwin said. “My fourth video in was my first online hit. It got over 100,000 views overnight. And then four videos after that was the first video I put out that got over a million views.”
“I was like what is this!? Why is this happening!? You know, I had never experienced anything like that, so I just hit the ground running,” he added.
Over the past year, Godwin has made dozens of videos on TikTok garnering millions of views. He’s branched out from his initial expertise in credit to touch on everything from new cryptocurrencies to Wells Fargo’s recent mishaps.
Godwin’s follower count quickly grew during the pandemic, and because he was earning enough from TikTok alone and had saved several months’ worth of expenses in a rainy day fund, he decided to quit his job and become a full-time creator.
Like many TikTok stars, the 27-year-old makes the majority of his money through Patreon, a service that allows people to financially support creators for their work. Godwin offers his perspective on investing and financial topics in articles as a part of his
package, and has also begun providing one-on-one personal finance and investing coaching to clients.
The majority of Godwin’s videos help break down basic finance topics for consumers, and he’s found that there is a dire need for this type of education — especially for young people. With that in mind, Insider asked Godwin for three simple tips to help young investors build wealth and avoid the many pitfalls of modern finance.
1) Invest now to help pay the future you
Godwin’s first tip, and perhaps the most critical for those looking to find financial freedom, is to invest early and invest often.
Godwin said he has found that the mindset of many young people is skewed toward savings, when it should be a more balanced approach that involves investing in safe, appreciating assets to help “pay the future you.”
He recommended young investors think long-term when investing and mostly avoid buying individual stocks or cryptocurrencies. Over 90% of Godwin’s portfolio is in stable exchange-traded-funds (ETFs) and mutual funds that he plans to hold even in instances of market turbulence.
To Godwin’s point, the chart below shows the S&P 500’s historical returns since the early 1990s. As you can see, even when you factor in the dot-com bubble and the great recession, over the last two decades market returns have been positive. That’s why many financial experts argue it makes sense for the average investor to avoid picking stocks and instead opt to hold an ETF like the SPDR S&P 500 ETF Trust for the long haul.
2) Don’t use house money when you’re investing
The second tip Godwin had for young investors is: “Don’t use your house money when you should be using your Vegas money.”
Godwin emphasized how critical it is for investors to not use too much of their overall wealth when buying riskier assets like cryptocurrencies or individual stocks. Doing away with oversized bets when buying these assets will help young investors avoid substantial losses that can disillusion them from investing later in life, the TikTok star said.
Godwin went on to say that he believes over 90% of cryptos will ultimately fail as well, so investors in the space should be careful. The creator described how he knows about scams within the crypto community because he was offered $25,000 to produce two videos supporting a popular alt-coin (which he wishes to remain unnamed). For the record, Godwin declined this offer.
Younger investors might also want to avoid using leverage to buy stocks or cryptocurrencies, Godwin said, because it can lift total investment exposure to dangerous levels. The use of leverage or debt to buy stock has been rapidly increasing since the pandemic began. FINRA margin debt, a common measure of the amount stock investors have borrowed from brokers to buy or sell-short stocks, hit a record $882 billion in June.
Godwin argued that sticking to safe investments without using debt to finance further gains is a better path in the long run.
“I’m a very boring and safe investor, and it’s worked for me,” he said.
3) Don’t fear credit, it’s a tool to be used wisely
These days many personal finance “gurus” like the popular Dave Ramsey have made young people fear credit. One wrong move and it’s years of pain, they’ll say.
Godwin, who has years of experience in the industry, isn’t so sure.
There are of course dangers to mismanaging credit, as Godwin has explained in his TikToks. It’s important to never carry a balance on your credit cards because compounding interest payments can really hurt over time, but that doesn’t mean you should avoid credit altogether, the creator says.
And that’s especially true if you want to invest in real estate later in life. Young investors should ensure they are building their credit the right way so that they can use it in the future to invest in rental properties or buy a home.
“Why teach people to fear credit, when we can just teach people to properly use it?” Godwin said.