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Watch out for 3 red flags before taking advice from a financial influencer

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Watch out for 3 red flags before taking advice from a financial influencer

Nearly 20% of college students say they look to social media most often for financial advice, a recent poll from Generation Lab and Morning Brew finds.

TikTok has emerged as one of the leading platforms for financial advice, with 34% of Gen Z saying they get their financial advice there, according to SmartAsset. The hashtag #FinTok, representing the financial TikTok community, has more than 4.5 billion views on the platform.

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At its best, social media helps expose young people to advice on how to save money or climb out of a mountain of credit card debt. But these platforms can also allow for the quick spread of financial misinformation.

When it comes to personal finances, social media has become “a blessing and a curse,” Brian Walsh, certified financial planner and head of advice and planning at SoFi, tells CNBC Make It. 

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“It’s a way for younger people, and actually anyone of any age, to get exposed to financial knowledge in bite-sized pieces when they need it, which can be extremely powerful,” he says. “But the curse of social media is really that there’s no barrier to entry. And it can become really hard for people to know what’s a reliable piece of financial information versus something that, quite frankly, is going to get them in trouble.”

As social media becomes an increasingly frequent source for money advice, it’s important to be able to distinguish between sound financial guidance and a potential scam.

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3 red flags to watch out for before taking advice from a financial influencer

Before following advice from a financial influencer, Walsh recommends looking for these three warning signs to help decide whether their tips are trustworthy. 

1. Their advice sounds too good to be true

Alarm bells should go off in your mind when an influencer promotes any kind of get-rich-quick plan. “If it sounds too good to be true, it most likely is,” Walsh says.

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“There are no quick fixes, overnight success stories, get-rich-quick schemes that are reputable for personal finances,” he says. “So when I see that, I say run away, because it is most likely going to be something that involves more risk than reward.”

2. They promote extremes and absolutes

Financial influencers who “take extreme stances or speak in absolutes on financial topics” also raise red flags to Walsh, particularly when they talk about debt.

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While some influencers recommend paying off all debt except your mortgage before beginning to build an emergency fund or invest, Walsh says that “not all debt outside a mortgage is created equal.”

He advocates for tackling high-interest debt such as credit cards early on, but “other debt might be pretty cost effective, i.e. student loans, and you may want to prioritize other goals ahead of an aggressive pay-down strategy.”

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“There’s so much gray area when it comes to personal finances that it’s almost a disservice to say something is always bad or always good,” he says. “The truth is somewhere in the middle.”

3. They have the same solution for every problem

Financial influencers who peddle an identical fix for every issue should also give you pause. Walsh sees this frequently when it comes to influencers who promote life insurance.

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“You see people positioning life insurance as a solution to if you die, retirement savings, saving for college, emergency fund, you name it,” he says. “But it’s very unlikely that one thing is going to solve every single problem that you’ve ever faced in your personal finances.”

Credentials to look for in a financial influencer

You’ve found a financial influencer you believe to be credible, and now you’re deciding whether or not to hit “follow.” To vet an influencer’s credentials, Walsh recommends looking to see whether or not they are financial professionals, something they’d likely include in their profile.

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“Financial professionals are going to be regulated by their organization and by regulatory agencies,” he says. “So they’re going to have less leeway when it comes to saying things and they’re going to have to actually back it up.”

While social media can be helpful for finding general financial tips online, those looking for specific advice should seek a financial professional to talk to one on one.

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All financial professionals are not made equal, either — different acronyms that follow someone’s name require different financial certifications and tests, such as certified financial planner (CFP) or chartered financial analyst (CFA).

You shouldn’t rely solely on official-looking acronyms, though. The U.S. Securities and Exchange Commission recommends checking a financial professional’s background as well.

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Influencer or not, you can look up a financial professional’s track record in a database such as BrokerCheck to see if they’ve run into trouble in the past. 

If an influencer isn’t a financial professional, it’s still worth it to investigate their background online to check for any glaring complaints or red flags.

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Before you make any financial decisions based on an influencer’s advice, Walsh suggests determining how the influencer makes their money.

“If they make money on selling a specific product, then chances are that’s going to be their solution and what they push, whether it’s the right thing or the wrong thing,” he says. “Not saying making money is a bad thing, but you should understand that perspective.”

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How a 40-ounce cup turned Stanley into a $750 million a year business

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How a 40-ounce cup turned Stanley into a $750 million a year business

For the better part of the past 110 years, Stanley was doing just fine. 

The drinkware manufacturer had made a place for itself in the knapsacks of outdoorsmen and lunchboxes of blue collar workers with its bottles and thermoses that kept food and drinks hot — or cold — for hours on end. 

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The Seattle-based brand was chugging along with a comfortable $70 million in annual sales from its famous hammertone green products, and looked poised for another century of modest, reliable success. 

But starting in 2020, something changed. A fledgling product came into its own and turned Stanley into a juggernaut. 

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Over the past four years, the Stanley Quencher has become one of the most popular water bottles in the world. Sold in an ever-growing array of colors and finishes, the Quencher has supercharged Stanley’s sales by appealing to a demographic that Stanley didn’t spend too much time catering to in its first hundred years: women. 

A favorite of nurses, teachers and celebrities alike, the Quencher has been such a popular product that Stanley’s annual sales are projected to top $750 million in 2023, according to data reviewed by CNBC Make It. 

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Here’s how Stanley leveraged the Quencher to turn a century-old company into one of the biggest names in hydration.

Early days

The Quencher arrived in 2016 to little fanfare. The 40-ounce insulated cup, which retails for between $45 and $55, sported a handle for ease of transportation, as well as a tapered design that allowed it to slide into a car’s cup holder. 

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But in its first few years, the Quencher didn’t make much of an impact. Year after year, the brand’s best-selling product remained the iconic green bottle. Indeed, sales were so middling that by 2019 Stanley had stopped restocking and marketing the product.

In 2020, Stanley brought on Terence Reilly as its new president. Reilly had spent the past seven years at Crocs, where he led the strategy that turned the rubber clogs into one of the hottest shoes on the market. 

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When Reilly came onboard, he did a listening tour around the company to hear from employees about what was working and what wasn’t. One employee mentioned a group of women in Utah who ran a commerce blog called The Buy Guide. 

Buy Guide cofounder Ashlee LeSueur had purchased her first Quencher at a Bed, Bath and Beyond store in 2017. She fell in love with the product and quickly began gifting it to friends and recommending it to followers. 

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The Quencher retails for between $35 and $55 and comes in dozens of colors and finishes.

Lauren Shamo

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In 2019, she tried to make a case for Stanley to continue production of the Quencher, but the sales numbers weren’t there. Instead, Stanley gave her another option: make a wholesale order to sell Quenchers directly to her Buy Guide audience.

“I felt like I was signing a mortgage,” LeSueur tells CNBC Make It of her purchase order for 5,000 Quenchers. “It was a big risk for it. It took every penny that we had in the business account, plus some personal funds to make that happen.”

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Those Quenchers, however, sold out within days. When Reilly took charge, he embraced The Buy Guide as partners, working with them to promote new, exciting colors like Desert Sage and Cream. 

“My experience at Crocs told me that that kind of influencer opportunity was just the magic that Stanley might need,” he says. “And we were right. The Buy Guide proved to be amazing partners and helped us create the Quencher phenomenon.”

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In fact, the Quencher sold so well that it replaced the iconic Stanley bottle as the brand’s top selling product in 2020. It hasn’t let go of the top spot since. 

Hydration domination 

The success of the Quencher has helped Stanley grow its annual revenue from $70 million to more than $750 million in four years.

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Gene Kim

With every new color Stanley rolled out, sales continued to increase. Stanley’s revenue jumped from $73 million in 2019 to $94 million in 2020. It more than doubled to $194 million in 2021.

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In 2022, Stanley released a redesigned Quencher model with a streamlined design and new array of colors and finishes. Revenue doubled again that year to $402 million.

The Instagram-friendly pastels helped the Quencher be seen as less of a utilitarian product and more as a fashion accessory. As the available color options grew — Stanley has released the Quencher in over 100 colors — some fans began building collections. 

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“We see all the time that [our customer] wants her Quencher to match her fit, her nail polish, her car, her mood, her kitchen,” Reilly tells CNBC Make It. “We’re serving her where she wants the product.” 

Content creator Chelsea Espejo first learned about the Quencher in 2022. She now has a collection of 47 cups. A gym enthusiast, she credits the cup’s large size for helping her stay hydrated throughout her workouts. The wide variety of color options certainly don’t hurt either. 

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“On the days that I do have extra time, I search for the specific [color] that matches my shirt,” she tells CNBC Make It. “I wouldn’t even say Stanleys are something I use. They’re actually part of my personality. If I don’t have it, if I don’t choose the right color, my day kind of doesn’t go how I planned it.” 

Espejo isn’t the only one with a strong attachment to her Quencher. The cup  is a social media darling, especially on TikTok. The #StanleyTumbler hashtag has been viewed more than 900 million times, and the product has been the star of many viral videos.

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They’re actually part of my personality. If I don’t have [my Stanley], if I don’t choose the right color, my day kind of doesn’t go how I planned it.

Chelsea Espejo

Stanley Quencher collector

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Helping drive the excitement is Stanley’s strategy of releasing new colors in limited-edition drops, advertising the latest additions to its roster on social media. Reilly also capitalized on the Quencher’s viral success by pushing for collabs with celebrities and brands

“My experience at Crocs was fueled by collaboration culture and drop culture,” Reilly says. “And I knew that once we had our legs under us at Stanley, and once we could see the connection to consumers that we were creating, we were also ready for collaborations.”

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Indeed, collabs have been key to driving the Stanley Quencher’s popularity. The Quencher is frequently released in limited edition colors that sell out in minutes. A recent collaboration with Starbucks resulted in a red Quencher that was being resold on eBay for hundreds of dollars the same day it dropped. 

A recent collab with country music star Lainey Wilson sold out in minutes.

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Stanley

When Target introduced new Quencher colors recently, some stores had to place restrictions on how many a customer could buy, limiting them to two per person.

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“The resale market is certainly flattering,” Reilly says. “The fact that there are signs at America’s best retailers limiting the number of Stanleys you can buy is an astounding thing to think about.”

Quencher collector Emily Fahrlander made her way to her local Starbucks at five in the morning the day the Starbucks collab was released, determined to get her hands on the limited-edition item. 

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“I’m not usually that crazy, I really am not,” she tells Make It. “But I didn’t get the last [drop], so I was like, ‘Let’s just wake up early.’” 

And while Reilly and the Stanley team still “want a little bit of scarcity” to help keep excitement around the product, he says they are constantly working on manufacturing as much product as possible.  

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“We really continue to increase the number of units available each time we drop, because we see the trend and the waiting lists that are growing,” he says. “But there’s only so many seats in the stadium, and when the seats are sold out, they’re sold out.” 

Halo Effect

Stanley has now sold more than 10 million Quenchers, and demand for the cup doesn’t look to be waning any time soon. 

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The Quencher’s popularity on social media has been a boon to the rest of Stanley’s business as well. Ellyn Briggs, a brands analyst at Morning Consult, tells CNBC Make It that a rising tide raises all boats. 

“It’s bringing the Stanley name to the forefront of consumers’ minds, making them aware of the brand, making them have more favorable perceptions,” Briggs tells Make It. 

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Indeed, Reilly says that the “entire Stanley brand has benefited from the Quencher trend.” 

Stanley’s entire lineup has adopted the Quencher’s embrace of color.

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Lauren Shamo

“We’re seeing our new products checking very well,” he says. “And certainly our heritage products have regained their velocity and their rightful place in culture and in serving the needs of consumers.” 

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For Espejo, whose introduction to the brand came through the Quencher, Stanley has become a mainstay in her cupboards with drinking glasses and mugs as well. 

“Now when I go to any store, the first thing I look at is the Stanley collection, whether it’s the mugs or the Quencher,” she says. “My love for [the Quencher] has given me the opportunity to love all of Stanley.”

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Close observers might notice that Stanley’s product line has taken a page out of the Quencher’s book, with aesthetic colors and eye-catching designs being adopted by Stanley offerings both new and old.

“[The Quencher redesign] gave us confidence that we can apply those same aesthetic principles across other categories,” Stanley design chief Graham Nearn says. “It gives us confidence that we could even start to refine and define our products that we were most famous for.”

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And while the success of the Quencher was fueled in large part by an embrace of colors favored by its new, female audience, Stanley was clearly onto something in its first 110 years. 

One of the Quencher’s most in-demand new colors? Hammertone green

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The first minds to be controlled by generative AI will live inside video games

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The first minds to be controlled by generative AI will live inside video games

A gamer uses a computer powered with an Nvidia Corp. chip at the Gamescon video games trade fair in Cologne, Germany, on Wednesday, Aug. 23, 2023. Gamescon runs until Sunday, Aug. 27. Photographer: Alex Kraus/Bloomberg via Getty Images

Bloomberg | Bloomberg | Getty Images

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It’s not just human life that will be remade by the rapid advance in generative artificial intelligence. NPCs (non-playable characters), the figures who populate generated worlds in video games but have to date largely run on limited scripts — think the proprietor of the store you enter — are being tested as one of the first core gaming aspects where AI can improve gameplay and immersiveness. A recent partnership between Microsoft Xbox and Inworld AI is a prime example.

Better dialogue is just the first step. “We’re creating the tech that allows NPCs to evolve beyond predefined roles, adapt to player behavior, learn from interactions, and contribute to a living, breathing game world,” said Kylan Gibbs, chief product officer and co-founder of Inworld AI. “AI NPCs are not just a technological leap. They’re a paradigm shift for player engagement.”

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It’s also a big opportunity for the gaming companies and game developers. Shifting from scripted dialogue to dynamic player-driven narratives will increase immersion in a way that drives replayability, retention, and revenue.

The interaction between powerful chips and gaming has for years been part of the success story at Nvidia, but there is now a clear sense in the gaming industry that it is just beginning to get to the point where AI will take off, after some initial uncertainty

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“All developers are interested in how artificial intelligence can impact game development process,” John Spitzer, vice president of developer and performance technology at Nvidia, recently told CNBC, and he cited powering non-playable characters as a key test case. 

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It’s always been true that technological limits and possibilities overdetermine the gaming worlds developers can create. The technology behind AI NPCs, Gibbs says, will become a catalyst for a new era of storytelling, creative expression, and innovative gameplay. But much of what is to come will be “games we have yet to imagine,” he said.

Bing Gordon, an Inworld advisor and former chief creative officer at Electronic Arts, said the biggest advancements in gaming in recent decades have been through improvements in visual fidelity and graphics. Gordon, who is now chief product officer at venture capital firm Kleiner Perkins and serves on the board of gaming company Take-Two Interactive, believes AI will remake the world of both the gamer and game designer.

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“AI will enable truly immersive worlds and sophisticated narratives that put players at the center of the fantasy,” Gordon said. “Moreover, AI that influences fundamental game mechanics has the potential to increase engagement and draw players deeper into your game.”  

The first big opportunity for gen AI may be in gaming production. “That’s where we expect to see a major impact first,” said Anders Christofferson, a partner within Bain & Company’s media & entertainment practice.

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In other professional tasks, such as creating presentations using software like PowerPoint and first drafts of speeches, gen AI is already doing days of work in minutes. Initial storyboard design and NPC dialogue creation are made for gen AI, and that will free up developer time to focus on the more immersive and creative parts of game making, Christofferson said.

Creating unpredictable worlds

A recent Bain study noted that AI is already taking on some tasks, including preproduction and planning out of game content. Soon it will play a larger role in developing characters, dialogue, and environments. Gaming executives, Bain’s research shows, expect AI to manage more than half of game development within five years to a decade. This may not lead to lower production costs — blockbuster games can run up total development costs of $1 billion — but AI will allow games to be delivered more quickly, and with enhanced quality.

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Ultimately, the proliferation of gen AI should allow the development process of games to include the average gamer in content creation. This means that more games will offer what Christofferson calls a “create mode” allowing for increased user-generated content — Gibbs referred to it as “player-driven narratives.” 

The current human talent shortage, a labor issue that exists across the software engineering space, isn’t something AI will solve in the short-term. But it may free developers up to put more time into creative tasks and learn how best to use the new technology as they experiment. A recent CNBC study found that across the labor force, 72% of workers who use AI say it makes them more productive, consistent with research Microsoft has conducted on the impact of its Copilot AI in the workplace.

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“GenAI is very nascent in gaming and the emerging landscape of players, services, etc. is very dynamic – changing by the day,” Christofferson said. “As with any emerging technologies, we expect lots of learning to take place regarding GenAI over the next few years.”

Given how much change is taking place in gaming, it may simply be too difficult to forecast AI’s scale at the moment, says Julian Togelius, associate professor of computer science and engineering at New York University. He summed up the current state of AI implementation as a “medium-size deal.”

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“In the game development process, generative AI is already in use by lots of people. Programmers use Copilot and ChatGPT to help them write code, concept artists experiment with Stable Diffusion and Midjourney, and so on,” said Togelius. “There is also a big interest in automated game testing and other forms of AI-augmented QA,” he added. 

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The Microsoft and Inworld partnership will test two of the key AI implications in the video game industry: design-time and assistance with narrative generation. If a game has thousands of NPCs in it, having AI generate individual backstories for each of them can save enormous development time — and having generative AI working while players interact with NPCs could also enhance gameplay.

The latter will be trickier to achieve, Togelius said. “I think this is much harder to get right, partly because of the well-known hallucination issues of LLMs, and partly because games are not designed for this,” he said. 

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Hallucinations occur when large language models (LLMs) generate responses that deviate from context or rational meaning — they speak nonsensically but grammatically, about things that don’t make sense or have any relation to the given context. “Video games are designed for predictable, hand-crafted NPCs that don’t veer off script and start talking about things that don’t exist in the game world,” Togelius said.

Traditionally, NPCs behave in predictable ways that have been hand-authored by a designer or design team. Predictability, in fact, is a core tenant of the video game world and its design process. Open-ended games are thrilling because of their sense of infinite possibility, but to function reliably there is great control and predictability built into them. Unpredictability in the gaming world is a new realm, and could be a barrier to having AI gain wider use. Working out this balance will be a key to moving forward with AI.

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“I think we are going to see modern AI in more and more places in games and game development very soon,” Togelius said. “And we will need new designs that work with the strengths and weaknesses of generative AI.”

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India is a ‘perfect’ emerging market for investors, ETF expert suggests

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India is a ‘perfect’ emerging market for investors, ETF expert suggests

India could be the ideal site for emerging market investment, according to one ETF expert.

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Kevin Carter, founder and chief investment officer of EMQQ Global, told CNBC’s “ETF Edge” this week that India’s population demographics, growing economy and technology-oriented policy make the country highly investable.

“You’ve got a government that’s a democracy that’s supporting technology, and you’ve got a talent pool that’s really unmatched on the planet,” he said. “So it really is in every way the perfect emerging market.”

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Carter, who manages the India Internet & Ecommerce ETF (INQQ), underscored the significance of India’s technology investments in particular.

“What’s coming along with that is $12 super computers,” said Carter, referencing the Jio Bharat smartphone released this year, which aims to close the connectivity gap between India’s rural and urban populations. “The smartphone is bringing those billions of consumers online for the first time.”

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That, according to Carter, is revolutionizing the financial system in a country of more than one billion people.

“What they’ve used that to do is basically enable about 800 million people to open a digital bank account using just their fingerprints and their eyeball, and also to open about 500 million new smartphone subscriptions. So they’ve brought everyone in the financial system, and they brought everyone there in a technological way.”

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Carter’s INQQ ETF focuses on Indian e-commerce and internet companies, targeting growth in the country’s digital economy. Per the fund’s website, as of Dec. 22, its top holding is Reliance Industries, the conglomerate behind the $12 smartphone boom.

“No other country on the planet has anything like this in terms of a digital foundation for their entire economy,” Carter added.

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