Why investors are uploading their trading advice to YouTube
By Simon Owens
From a very early age, Justin Rodriguez knew he wanted to be rich. “When I was in the first grade I told people I wanted to be a doctor just because I knew they made a lot of money,” he told me. In the sixth grade he joined a club where the students would open up each day’s newspaper, circle the stocks they liked, and then follow along every week to see how the stocks performed. “I knew then that I was definitely going to buy stocks one day, I just didn’t know when.”
Given this early ambition, you’d think Rodriguez went on to major in finance and pursue a career on Wall Street, but his route to trading was much more circuitous. After graduating with an education degree in 2009, he took a job teaching high school math in the Chicago area. By this point, he still knew virtually nothing about trading stocks.
But by living with his parents, he’d managed to save up a little money, and Rodriguez began thinking about how he could possibly use these savings as seed capital to jumpstart his investing. “Finally one day I was just like, ‘I’m going to call Scottrade and ask whoever picks up the phone to show me how to do it,’” he said. “So I called my local branch office and said, ‘I want to start investing. How do I set up an account?’ And he walked me through it.” He then made his first trade, purchasing nine shares of Apple.
That was in 2012, and that same year Rodriguez quit his teaching job and launched his own business building and selling his own fingerboards, which are miniature, finger-sized skateboards. He also continued to dabble in stock trading, but progress was slow. “It took me two years to break even,” he said. “It was kind of a slow process. I feel like I could have put more time into it and sped that up more, but I was running a business on the side. I didn’t know if I had a lot of time to focus on it.”
Rodriguez finally decided to get more serious about his trading in late 2016. A guy who helps him with his taxes told Rodriguez about his experience with options, a type of trading that exposes a trader to both greater risk and greater potential reward. He watched several videos and read numerous articles on options trading until he felt he had a firm grasp of how the process worked. Then, in early 2017, he began trading in earnest.
I found out about Rodriguez because I stumbled across his YouTube channel, which is called Road to the 2 Comma Club. He got the idea from Gary Vaynerchuk, who has been using YouTube and other platforms to document his experience running a digital marketing agency. “I was thinking that I should do a YouTube channel documenting my journey to hit a million dollars” — hence the reference to the two commas — “I put it off for like a year, and finally I was tired of waiting and decided I was just going to put my phone on record and start talking.”
Those early videos are fairly rough, mostly because he simply uploaded them straight from his phone. But eventually Rodriguez began editing the videos down using Adobe Premiere Pro, and he even added a flashy intro for each episode. He starts every episode with an update on where he is in his two comma journey, regardless of if he’s up or down. A video uploaded in August, for instance, flashes the figure $99,177.99 on the screen — his total haul so far — before segueing to a very depressed looking Rodriguez. “Ah crap,” he says. “Stocks are down…This is not good. We were on an eight-day streak and it looks like we’re going to be hit pretty bad today.” In another video uploaded a month earlier, Rodriguez is ebullient. “Holy shit guys,” he begins, before launching into an explanation of how he made $11,000 in a single day.
At first, hardly anyone watched the channel, but then one day Rodriguez stumbled across a YouTuber named Ryan Scribner. Scribner had been uploading his own investing videos and had amassed over 4,000 subscribers. “So I reached out to him on Facebook, and said, ‘hey, I have a channel. I’m documenting me hitting a million dollars in investing. Would you be interested in doing a collaboration video so we can help each other’s channels?’”
Rodriguez ended up shooting three separate videos for Scribner’s channel, and each time one was posted, his own subscriber count would jump up. “He kind of blew up,” said Rodriguez. “His channel went viral and he went from 4,000 subscribers to over 50,000. So when he uploaded my last video to his channel, I got like 200 subscribers in a couple days.” This boost, though relatively small, gave Rodriguez the momentum he needed to start growing his channel organically, and now he’s adding a few hundred new subscribers every month. In just eight months, he’s amassed close to 1,300 subscribers and has generated over 30,000 views.
Rodriguez is just one of dozens of investors I’ve come across who are uploading videos about trading to YouTube. In some cases, these channels are posting explanatory videos for beginner investors. In others, the traders are making predictions about future stock moves or documenting, like Rodriguez, their own ups and downs. You’ll find YouTube videos on just about every kind of investing niche, from penny stocks to cryptocurrencies.
So why are these investors placing so much effort into producing videos? For Rodriguez, it’s an effort to build two incomes: one from investing, and the other from advertising. He’d read stories about “YouTube millionaires” who made it big via the platform’s revenue sharing. “I thought, wow, that would be so cool to make a full time living on YouTube. That would be a dream job.” But soon after he launched his channel, YouTube instituted a new rule that channels couldn’t monetize until they reached at least 10,000 views. He had to wait until he hit that benchmark, and ever since he began implementing ads he’s been generating about $1 a day. “I did learn early on that the financial YouTube channels get a much higher CPM than the regular channels,” he said. “I’m not anywhere near where I’m making enough to make a living, but I feel like it’s happening sooner than I was expecting. If I can just keep the momentum going.”
David Moadel also launched his YouTube channel to make money, but not through advertising. Like Rodriguez, Moadel had been a teacher before he dipped his toes in investing. Eventually he grew burnt out as an educator (“I was being forced to do test prep all day,” he said), and so he quit his job to focus on trading full time. As he saw more and more success, he found himself coaching friends and family on their own investing. “They all said I should monetize this,” he told me. So he rolled out investor coaching services as a side business.
To promote his personal brand and expertise, Moadel began in 2016 posting regularly to YouTube, Twitter, and StockTwits, a Twitter-like platform for investors. For the first six months, he struggled to gain followers. “Once I got my first hundred, then it got easier to get my next hundred,” he said. “And then once I got my first thousand, then getting the next thousand was so much easier.”
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Despite leaving his teaching job behind, he said he still benefits from his work as an educator. “Even though my background was not in finance, the feedback I’ve received as a YouTube educator is that I’m very good at explaining things. Unfortunately for a lot of my competition, they might have an excellent track record in terms of trading or investing, but their videos don’t teach much. So they’ll have misleading titles like ‘how to make 500 percent in one day,’ and then you click on a video and there’s nothing of the sort.”
That’s not to say Moadel hasn’t shifted his video topics based on what gets clicks. He found that the videos that focused on the most sound advice, which is investing in stocks and sitting on them longterm, didn’t attract much interest. “The ones that get thousands or tens of thousands of views are on how to make money quickly,” he said. “And also numbers seem to help. So take a video titled ‘Five penny stocks with explosive growth potential.’ Something like that will get a lot of clicks. It’s short term, — the word ‘explosive’ implies that — and references penny stocks, which people know can go up 100 or 500 or 1,000 percent. If you put a number on that and make a list out of it, then that generates a lot of clicks.”
As his channel grew more and more popular (he now has over 8,000 subscribers and 750,000 views), potential clients began emailing him about his coaching services. I asked Moadel to describe what his typical day looks like. He said that he spends about six and a half hours each day actively trading with the T.V. on in the background. “Then, after 4 o’clock, when the market closes, I can start thinking about what videos I want to do next. What do people want to see? They ask for things in the comments and they email me, and they’ll say, ‘can you put out a video about this?’” Moadel will also devote about an hour or two each evening to his coaching clients.
For both Moadel and Rodriguez, interactivity on the channel is key. “I get a lot of people commenting,” said Rodriguez, “I respond to every comment, and I get in a couple debates with commenters, which is fun.” He said that many of his regular commenters are young people who are looking to get into trading. “They haven’t started yet, but they’re interested in starting, so they’re just watching the channel to learn.” Moadel told me that most of his commenters are beginners as well, and YouTube analytics informs him that 91 percent of his viewers are male.
Watching these investor videos, I couldn’t help but draw parallels between them and business news networks like CNBC, which has any number of talking heads dispensing trading advice. Are these YouTubers trying to become the next Jim Cramer? “A lot of financial YouTubers will put down Cramer and make fun of him,” said Moadel. “Some people think he’s a clown, he’s all bells and whistles. Flashy graphics and what not. But any of those guys secretly would love to be in Cramer’s position with that kind of a following.”
Ultimately, said Moadel, YouTube provides him and others the opportunity to offer a kind of CNBC 2.0, but much of their success rides on the fact that many YouTube channels are willing to dive into niche financial topics that CNBC hardly ever covers. “For someone who wants to learn about penny stocks, there’s nothing for them on CNBC,” he said. “Or MSNBC. Or Fox News. If they want to learn about options trading, there’s nothing for them. There’s nothing on TV or the radio. For the most part, the internet is where you’re going to go to learn about that stuff. Futures. Commodities trading. Sooner or later you’re going to type these terms into Google and Google will bring you to YouTube a lot of the time.”
There’s one other reason that investors post to YouTube: many say it makes them better traders. By having to articulate why they made a certain trade or explain a complicated financial product, they’re able to understand the process that much more. “By interacting with people, it’s forced me to step up my game,” said Moadel. “I don’t want to tell a commenter ‘I don’t know.’ I say, ‘you know what, I’ll get back to you.’ That’s what good teachers do; they admit when they don’t know something and then go and research it. I’ve been forced to learn all sorts of new things about the markets, and I have to be on top of my game to do that.”
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Simon Owens is a tech and media journalist living in Washington, DC. Follow him on Twitter, Facebook, or LinkedIn. Email him at simonowens@gmail.com. For a full bio, go here.
