TikTok is a never-ending stream of bad financial advice

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A recent LendingTree survey found that 41% of Generation Z have relied on TikTok for financial advice in the past month, and indeed, hashtags like #FinTok or #Money have hundreds of millions of views. But do these little videos really give good advice? Often not, even comically. In many cases, the “expert” is just an influencer with a large audience and no financial education of any kind. Here are some examples of bad advice and how to tell the good from the bad.

TikTok has all kinds of bad financial advice

The best and worst thing about TikTok is that complex topics can be broken down into easy-to-understand videos that are typically under 60 seconds long. The problem is knowing when the advice is just wrong, unless you do your own research. Here’s a look at the different types of bad financial advice you might see on TikTok:

Well-meaning advice that isn’t fully thought out.

This video suggests that you can generate passive income by purchasing candy machines and installing them in high-traffic areas. What is video does not tell you is that this secondary activity is not that passive (machines require continuous maintenance) and that you cannot move onto other people’s property without their permission, which greatly hinders the number of machines that you can install in a secure location.

This, in turn, limits your ability to make a lot of money with a business that doesn’t make a lot of money initially (coin-operated machine revenues are around $ 1 per day)

Too reductive advice that lacks important context.

The tips in this video is how to “go from $ 200 to $ 50,000” by choosing the right stocks. However, the rationale for buying the shares is based on superficial assumptions, like buying Zillow shares because mortgage interest rates are low, for example. But as the financial planner reviewing this clip points out, this mortgage rate information isn’t new and is already built into the stock price.

What you don’t know about this video is the history of the company, its balance sheet or the amount of its debt. As always, past performance is no guarantee of future results.

Categorical and completely wrong advice.

in this video, the advice is to be paid only in Bitcoin, because “who is going to get you? The answer, of course, is the IRS, which is crack down on cryptocurrencies and even the hiring of external contractors to identify cryptocurrency investors whose tax returns omit or contain incorrect data on cryptocurrency transactions. If you followed this advice, you will have to pay taxes and face fines and even criminal prosecution.

How to spot bad financial advice on TikTok

The problem is, a good chunk of these videos are made by untrained influencers who are motivated more by likes and followers than being correct. If they are wrong, this bad advice can be dismissed with a warning “this is only my opinion”, as many creators of TikTok do. Therefore, if you want to spot bad financial advice, be sure to ask yourself:

  • Do they have credentials? If an influencer bio doesn’t say they’re a Chartered Financial Planner (CFP), Chartered Accountant (CPA), or Registered Investment Advisor (RIA), and tell you what to do with your money, be very skeptical.
  • Is the designer trying to sell you something? If an influencer appears to be promoting a product or a certain type of stock, keep in mind that they might have an undisclosed financial interest in what they are selling.
  • Is it too good to be true? No one can accurately predict the future performance of the stock market, and if he could, he wouldn’t be sharing it with millions of TikTok viewers. Avoid “get rich quick” investment advice; if it sounds too good to be true, it’s probably because it is.
  • Can I verify this? Often times, the only thing you can check about an influencer is if they’re popular, but that doesn’t mean the advice they approve of is correct. You will always want to do your own research before you act on the financial advice offered in a 60 second video.


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