Looking to take out a mortgage or wondering whether you should sell or buy Tesla stocks?
TikTok, the social media platform known for dance clips and Fleetwood Mac lip sync videos, has plenty of suggestions — but it may not all be good advice.
The video-sharing app has millions of videos with the hashtags #fintok or #stocktok that offer financial and stock market advice from anyone able to create a TikTok profile — day trading know-how and economic intelligence not required.
While there are short videos that helpfully teach ways to pay down credit card debt and explain the differences between types of long-term savings plans, Vox reports, at its worst, “Finance TikTok perpetuates financial myths, scams and dangerously misleading information.”
We took a look at some of the, um, more dubious financial claims and stock advice on Tiktok and whew. https://t.co/6u2gNFZBDk— Emily Stewart (@EmilyStewartM) January 18, 2021
Perhaps the most limiting factor of TikTok financial advice — other than scores of influencers selling their own brand and the lack of fact-checking — is the abbreviated nature of the platform’s videos.
But, within those limitations, “many creators view TikTok as a way to introduce their audience to personal finance topics, so they may be inspired to learn more on another platform,” reported NextAdvisor, a Time Magazine partner that focuses on money management. “Yet the widespread accessibility of social platforms like TikTok, as well as Instagram, YouTube and others, may be exactly what’s needed to improve financial education and literacy, especially for traditionally underserved communities.”
“I just want people to hear the words index funds and ETF (Exchange Trade Fund),” said Delyanne Barros — or known on TikTok to her more than 172,000 followers as @DelyanneTheMoneyCoach — according to NextAdvisor. “My goal is just to build that vocabulary for people, to pique curiosity.”
But the platform’s reach and brevity can also be a problem when it comes to delivering reliable information.
“What users end up seeing often isn’t good advice from trusted sources, it’s just one random person’s experience making thousands of dollars off buying and selling Tesla calls,” reported Vox in its story, “Terrible financial advice is going viral on TikTok.” “Other times, it’s business owners promising to make you a millionaire — all you have to do is give them your money first.”
Emily Stewart, a Vox politics and business reporter, debunks dubious claims by TikTok users and breaks down other financial truths to consider in 10 of the most viral finance videos on the app.
Will “Tesla calls” and shorting the stock market lead to financial freedom for the average TokTok-er? Probably not.
Can starting an S corporations turn your household into a tax shelter? No.
The Federal Reserve has a mysterious million-dollar bank account that you can route money out of with your Social Security number? A total myth.