Needless to say: Don’t take financial advice from an app known for surveillance and life-threatening trends. But it looks like Gen Z never got the memo. According to Barrons, more than a third of Americans in this age group prioritize financial advice from TikTok over tips from a certified advisor.
Anyone can claim to be a financial expert on the internet. Social media platforms are full of charlatans trying to trick you out of your money. Tap or click here for details on trending scams, from fake sweepstakes to fake coupons.
Not even the headlines about famous multi-million dollar crypto lawyers can shake Gen Z’s faith in financial advice from internet strangers. When we heard this news, we looked for the worst financial advice on TikTok. You won’t believe people follow these money tips!
Warn your family about TikTok’s terrible financial advice
In the past, we wrote about many disadvantages of TikTok. You might agree with FCC Commissioner Brendan Carr, who says TikTok is a national security threat. But even if you avoid it, we bet you have friends and family who still love TikTok.
Your loved ones could find lousy advice. Remind them that some things are worth paying for — especially financial advice.
There is misleading financial information all over “FinTok,” the popular term for TikTok’s personal finance section. Users with no knowledge of personal finance see FinTok as an easily accessible tool for beginners. They think they can learn short financial lessons in short one-minute videos.
However, many of the most popular FinTok leaders lack credentials or experience. It’s just randos speaking confidently into a camera.
One in seven personal finance videos on TikTok contains misleading financial information.
From BBC News
Many TikTokers will encourage viewers to make risky financial decisions. However, they do not explain the consequences.
Take free tips from a stranger and you could be thousands in debt. The person who claims to know may be paraphrasing something they read online but don’t fully understand. Here are some of the worst things from so-called “financial experts” on TikTok.
1. They tell you which stocks will make you rich in 2023
TikTok financial gurus love making short videos telling you which stocks to buy. However, they rarely cite their sources. Sometimes, they mention random stocks that they barely researched.
Never buy stocks based on the advice of an internet stranger. Thoroughly research the stock’s performance over the past year. Find out the risks before you buy anything. Also, remember that some TikTokers may have ulterior motives. They may recommend stocks they have already invested in so they can artificially increase demand and the share price.
2. They tell you to invest in cryptocurrency
Just like stocks, crypto requires thorough investigation. Tons of celebrities, from Kim Kardashian to Shaq and Tom Brady, are under fire for promoting crypto. One fan is suing his idol Tom Brady for promoting a cryptocurrency that later performed poorly.
Remember that celebrities are paid handsomely to endorse products – including crypto. Although it’s tempting to trust your favorite actor, musician or reality TV star, you should know that they don’t have your best interests in mind. They are thinking of fattening their bank accounts. They don’t care about your financial well-being.
RELATED: A beginner’s guide to buying cryptocurrency
3. They recommend the snowball hunting method
This is a common strategy that people use to lower their debt. The advice says to pay off cards with the lowest balances first. That way, you’ll be motivated to pay off cards with higher balances.
However, TikTok advisors don’t mention the crucial part: You also have to pay off your other debts. Young and naive TikTok users hear about the method and think that they only have to pay their smaller debts. Then, they leave more significant debt on the side of the road. This creates additional issues later and affects their credit scores.
4. Common TikTok financial advice pushes you towards day trading
You don’t need a college degree to start day trading. But you need tons of time and economic know-how to succeed.
Many TikTokers make day trading look easier than it is. It involves a ton of risk, which is why it’s better to build an investment portfolio over time.
5. Many TikTokers say you shouldn’t pay off your student loans early
This is a bad idea because student loan debt can reach enormous heights. TikTok’s so-called financial advisors often tell their followers to invest the money they have to pay for loans on investments instead.
That is a dangerous decision. Wait too long to pay off your debt and the interest rate on your debt could become too high. Instead of going all in, play it safe and pay back your loans regularly.
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