TikTok Financial Advice Cannot Be Trusted – 5 Worst Tips To Avoid – Komando

TikTok Financial Advice Cannot Be Trusted - 5 Worst Tips To Avoid - Komando

It should go without saying: never take financial advice from an app known for surveillance and life-threatening trends. But it seems Gen Z never got the memo. According to Barronsmore 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 who want to take your money. Tap or click here for details on popular tricks, from fake sweepstakes to bogus coupons.

Not even the headlines about multimillion-dollar crypto lawsuits can shake Gen Z’s trust in financial advice from internet strangers. When we heard this news, we went looking for the worst financial advice on TikTok. You won’t believe people actually follow these money tips!

Warn your family about terrible financial advice from TikTok

In the past, we have written about the many drawbacks of TikTok. You might agree with FCC Commissioner Brendan Carr who says TikTok is a threat to national security. But even if you avoid it, we bet you have friends and family who still love TikTok.

Your loved ones may encounter bad advice. Remind them that some things are worth paying for – special financial advice.

Misplaced financial information can be found all over “FinTok,” the popular term for TikTok’s personal finance section. Users who know nothing about personal finance view 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 have no credentials or experience. They’re just randos talking confidently into a camera.

One in seven personal finance videos on TikTok contain misleading financial information.

From BBC News

Many TikTokers will encourage viewers to make risky financial decisions. However, they do not explain what the consequences are.

Take a stranger’s free tips and you could be in thousands of debts. The person claiming to be knowledgeable may just be repeating something they’ve read online but don’t fully understand. Here are some of the worst shots from so-called “financial experts” on TikTok.

1. They tell you which stocks will make you rich in 2023

TikTok’s financial gurus like to make short videos telling you which stocks to buy. However, they rarely mention their sources. Sometimes they name random stocks that they barely researched.

Never buy stock based on the advice of an internet stranger. Thoroughly research the stock’s performance over the past year. Determine the risks before you buy anything. Also remember that some TikTokers may have ulterior motives. They can recommend stocks they’ve already invested in so they can artificially boost demand and share price.

2. They tell you to invest in cryptocurrency

Like stocks, crypto requires thorough research. Countless celebrities, from Kim Kardashian to Shaq and Tom Brady, have come under fire for promoting crypto. A fan is suing his idol Tom Brady for promoting a cryptocurrency that later underperformed.

Remember, celebrities are paid handsomely to recommend products, including cryptocurrencies. While it’s tempting to trust your favorite actor, musician, or reality TV star, know that they don’t have your best interests at heart. They think about fattening their bank accounts. They don’t care about your financial well-being.

RELATED: The beginner’s guide to buying cryptocurrency

3. They propose 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 will be motivated to pay off cards with higher balances.

However, TikTok advisors do not mention the critical part: you also have to 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 larger debts aside. This causes additional problems later on and affects their credit scores.

4. General financial TikTok advice pushes you towards day trading

You don’t need a college degree to start day trading. But you need a lot of time and economic knowledge to succeed.

Many TikTokers make day trading look easier than it is. It comes with a lot of risk, which is why it is 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 instead invest the money they would spend on paying off loans.

That’s a risky decision. Wait too long to pay off your debts and the interest rate can push your debt to an impossibly high amount. Instead of going all in, play it safe and pay back your loans regularly.

Keep reading

This tricky scam campaign goes after those who have lost money in crypto

Beware: fake coupons are proliferating on social media

Leave a Reply