Of course it should be said. Never take financial advice from an app known for its surveillance and life-threatening tendencies. But it seems Gen Z never got the memo. According to Barrons, more than a third of Americans in this age group prioritize TikTok financial advice over advice 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 scam you out of your money. Tap or click here for details on trending tricks, from fake sweepstakes to fake coupons.
Even 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 searched for the worst financial advice on TikTok. You won’t believe that people actually follow these money tips.
Warn your family about TikTok’s scary financial advice
In the past, we have written about the many disadvantages of TikTok. 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 may encounter evil advice. Remind them that some things are worth paying for. especially financial advice.
Financial misinformation is all over FinTok, the popular term for TikTok’s personal finance section. Users who know nothing about personal finance find FinTok an easily accessible tool for beginners. They think they can teach financial lessons with short, one-minute videos.
However, many of FinTok’s most prominent leaders lack credentials or experience. They’re just randos talking confidently on 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 its consequences.
Take a stranger’s free advice and you could end up thousands in debt. A person who claims to be knowledgeable may just be parroting something they read online but don’t fully understand. Here are the worst perceptions of 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 that they barely researched.
Never buy stocks based on advice from internet strangers. Take a close look at the stock’s performance over the past year. Determine the risks before you buy anything. Also, keep in mind that some TikTokers may have ulterior motives. They can offer shares in which they have already invested so that they can artificially increase the demand and the price of the shares.
2. They tell you to invest in cryptocurrency
Like stocks, crypto requires due diligence. Tons of celebrities, from Kim Kardashian to Shaq to Tom Brady, have come under fire for promoting crypto. A fan is suing his idol, Tom Brady, for promoting a cryptocurrency that has since performed poorly.
Keep in mind that celebrities are paid heavily to endorse products, including cryptos. While 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 think about fattening their bank accounts. They don’t care about your financial well-being.
CONNECTED. A beginner’s guide to buying cryptocurrency
3. They recommend the snowball debt method
This is a common strategy that people use to reduce their debt. The advice says to pay off the cards with the lowest balances first. So you’ll be motivated to pay off cards with higher balances.
However, TikTok consultants miss the most important part. you must also pay your other debts. Young and naive TikTok users hear about the method and think they need to pay off their smaller debts. Then they leave more significant debts on the road. This later causes additional problems and affects their credit scores.
4. General TikTok financial advice drives you to trade
You don’t need a college degree to start day trading. But you need a ton of time and economic knowledge to succeed.
Many TikTokers make day trading look easier than it is. It involves a ton of risk, which is why it’s best 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 would otherwise spend on paying off loans instead.
It’s a risky decision. Wait too long to pay off your debts and the interest rate can turn your debt into an unbelievably large number. Instead of going all out, play it safe and pay back your credits regularly.
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