We turn to social media for advice on fashion, friendships, relationships, food, travel, home decor, fitness, wellness, etc. You name it and I bet you that there is someone on social media that is trying to get you to buy it. Research studies have shown that many people rely on information and reviews on social media as a guide for planning their future purchases. We all want to know what products our favorite influencers use and highly recommend. The content that we absorb on social media has the ability to make us act in very specific ways that are positive to business owners. In other words, social media influences what we buy.
According to a Deloitte report, consumers who are influenced by social media are 4 times more likely to spend more on purchases. The influence of social media can be so high that 29% of consumers are more likely to make a purchase on the same day of using social media.
Social media promotes consumerism, consumerism is good for business profits, and business profits are good for business owners.
Did you know that shareholders are business owners? As a shareholder of a company you are an owner of the company and as an owner of the company you benefit from the consumerism promoted on social media? A shareholder is a person, company, or institution that owns at least one share of a company’s stock, which is known as equity. Because shareholders are essentially owners in a company, they reap the benefits of a business’ success.
In 2020, I decided to not only buy the products and services that my favorite influencers were promoting on social media but to use that influence to my advantage by also investing in the companies that produced the products and services that were trending on social media. Here’s what I did: I started analyzing all of the major brands that were trending on social media and did some due diligence on the companies (growth projections, dividend payout ratios, earnings per share, etc.). As a result, I turned my obsessions with social media into a study of the companies that owned the trending brands. As a result, I invested in the following companies:
Netflix, Inc. (NFLX)
In 2018, everyone and their mother were using #netflixandchill all over social media. The hashtag is still relevant in 2020 and has been used over 20.8 million times on Instagram. As an active Netflix user and a proud advocate of #netflixandchill, I thought it made sense to invest in Netflix stock. Almost everyone on social media uses Netflix (or has access to Netflix via some generous person’s Netflix account) and Netflix movies are always trending. Do you guys remember how popular BirdBox was in 2018, The Irish Man in 2019, and Tiger King in 2020? When I invested in Netflix stock (pre-corona virus), the shares were trading at $326.95 per share. Netflix shares are currently trading at $491.89 per share. That’s an increase in value of 50.45%. In simple terms, if I were to sell 1 of my Netflix shares today, I would make a profit of $168.70 (before transaction fees, capital gain taxes, etc.).
Caveat: Covid-19 and the resulting quarantine/stay-at-home orders are partly responsible for the significant increase in NFLX stock value, but even without Covid-19, I believe that NFLX is a good investment given its relevance in pop culture, social media trends and the increasing use of streaming services versus traditional cable television.
Beyond Meat, Inc. (BYND)
Listen, #vegan, #veganlife and #plantbased is a major movement. Every one of us knows someone that is vegan, plant-based, or pescatarian. More and more people are moving towards plant-based diets which have resulted in an increased demand for plant-based meat substitutes. BYND is the leading maker of plant-based meat substitutes, Impossible Foods is also a leading maker of plant-based meat substitutes but unlike BYND, Impossible Foods is privately owned so its shares are not traded on the stock exchange. When I purchased BYND, the shares were $87.75 per share, the shares are currently trading at $127.17, that’s an increase of 44.92%.
Fun Tidbit: The next time you go to brunch at your favorite NYC restaurant, take a closer look at the menu and you’ll probably see an “Impossible Burger” listed as a menu option. Burger King even recently added an “Impossible Whopper” to its menu. Plant-based meat substitutes are here to stay, why shouldn’t you profit from this trend?
Honorary Mention: Apple, Inc. (AAPL)
I wrote this blog post on my Apple MacBook Air while checking my Instagram updates on my iPhone 11. Every phone that I’ve owned in the last 5 years has been an iPhone. Almost everyone that I know has an Apple iPhone or watch or music subscription. Apple has dominated the electronics market for many years and I believe that they will continue to do so for many years to come. When I invested in AAPL stock, the share price was $291.66, the shares currently trade at $375.40, that’s an increase of 28.71%.
I am not an investment professional and this is not investment advice. I am simply highlighting the fact that social media has been profitable for many companies and as consumers and social media users, we should pay close attention to trends that we continuously promote. There is value in being both a consumer and a shareholder.
Steffon Henry
July 30, 2020Great advice to consider. Thanks.
nandy_millette
July 30, 2020I’m glad you liked it!!
Carrie
July 30, 2020Great article. It’s so important to invest early (while we can) in brands like Netflix especially if you’re on the route toward financial independence. For those who don’t know how to get started, do you mind sharing how you made these investments? Did you use an investment company or app?
nandy_millette
July 30, 2020I’m happy that you enjoyed the article. I use the Etrade app. I like Etrade because there is no account minimum, you can set up an account with as little as $1 and start trading! They also don’t charge commission for trades in US stocks and ETF so it reduces the cost to you as an investor! You should definitely check them out!