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Don’t Listen to TikTok

TikTok isn’t the place to go for financial advice, and here’s why.

Don’t take financial advice from TikTok. Lately, it seems like a lot of people are trying to offer financial and career advice on TikTok. These types of videos are so popular that they have their own hashtags; #fintok and #Stocktok.

This isn’t a dig on the platform; it has a use. From dance to comedy, TikTok is about entertainment—finance and investing are a little more complicated than a dance. Here’s what you should know about TikTok financial advice and what you should do with it.

Throw it out

Ok, maybe not simply throw it out, but take it with a grain of salt. During research, we came across a video that tried to explain how to save $7,000 in three months. The creator gave some solid bits of advice: stick to your budget, don’t eat out, etc.—you’ve heard it before. But they never said how much they make a month. Most people don’t make $7,000 in three months, let alone enough to save that much in three months.

The point is, they had some solid, obvious advice, but the video as a whole is simply clickbait. People make money if their TikToks get enough views. Making a dramatic statement gets people to open the video. Because of the short nature of the video, people are likely to finish it. All of this plays into the algorithm that promotes content and pays creators.

It’s already too late

“Oh, but this guy who makes all his money trading stock said this stock is a hot buy!” And it was; before he said it. People who make their living trading stocks don’t get their information from viral memes. They do research, they read previous SEC filings, they look at past data and compare it to current trends, and they analyze how people are buying, selling, or shorting a stock.

If you’re hearing about it in a viral video, the people who are really going to make money on that investment already have. You buying in only serves to drive their goal: raising the price even more to their benefit when they sell it for more than they bought it.

It’s not that they are trying to deceive you. Think of it as a race car driver telling you to buy the brand that sponsors their car. You can’t buy their car, nothing on their car is in the car you can buy. It’s two different levels of driving, two totally different vehicles. Being motivated by their promotion isn’t bad, but it doesn’t put you on the same level.

What can you do?

Talk to people you trust, people who have a vested interest in your financial success. Your parents or other family members are a good start. There’s a good chance some family members have already made financial investments on your behalf, find out what those are and what you can do with them.

If you want to get serious about investing, talk to someone at your credit union. If they don’t have a financial adviser on staff, they most likely can point you to a few people. Those people are going to be licensed professionals who give financial advice for a living.

Another option is to start a club at school. More than likely some of your teachers are somewhat wise in the ways of investing. Put together a club, invite speakers, pool your knowledge with your classmates on where to find good, relevant information for making smart investments.

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