It should go without saying: Never take financial advice from an app famous 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 TikTok financial advice over tips from a certified advisor.
Anyone can claim to be a financial expert on the internet. Social media platforms are full of charlatans looking to trick you out of your money. Tap or click here for details on trending tricks, from fake sweepstakes to false coupons.
Even the headlines about multimillion-dollar celebrity crypto lawsuits can’t 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 that people actually follow these money tips!
Warn your family about terrible TikTok financial advice
In the past, we’ve written about TikTok’s many drawbacks. Maybe you 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 come across lousy advice. Remind them that some things are worth paying for — especially financial advice.
Misguided financial information is all over “FinTok,” the popular term for TikTok’s personal finance section. Users who don’t know anything about personal finance see FinTok as an easily accessible tool for beginners. They think they can learn bite-sized finance lessons in short, one-minute videos.
However, many of the most popular FinTok leaders lack credentials or experience. They’re just randos speaking confidently into a camera.
One in seven personal finance videos on TikTok has misleading financial information.From BBC News
Many TikTokers will encourage viewers to make risky financial decisions. However, they don’t explain the consequences.
Take a stranger’s free tips and you could find yourself thousands in debt. The person claiming to be knowledgeable may just be parroting something they read online but don’t fully understand. Here are some of the worst takes from so-called “financial experts” on TikTok.
1. They tell you which stocks will make you rich in 2023
TikTok financial gurus love to make short videos telling you which stocks to buy. However, they rarely cite their sources. Sometimes, they mention random stocks they hardly researched.
Never buy stocks based on an internet stranger’s advice. Thoroughly research the stock’s past performance over the past year. Determine the risks before you purchase anything. Also, remember that some TikTokers may have ulterior motives. They may recommend stocks they’ve already invested in so they can artificially boost the demand and 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’re thinking of fattening their bank accounts. They don’t care about your financial well-being.
RELATED: The beginner’s guide to buying cryptocurrency
3. They suggest the snowball debt method
This is a common strategy 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 critical part: You must also pay your other debts. Young and naive TikTok users hear about the method and think they only have to pay their smaller debts. Then, they leave more significant debts by the wayside. This causes additional issues later and impacts their credit scores.
4. Common TikTok financial advice pushes you toward day trading
You don’t need a college degree to start day trading. But you need a ton 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. So-called financial advisors on TikTok often tell their followers to invest the money they would spend paying off loans on investments instead.
That’s a risky decision. Wait too long to pay off your debts and the interest rate could churn your debt into an impossibly high number. Instead of going all in, play it safe and pay back your loans regularly.
This tricky scam campaign goes after those who lost money in crypto