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Terrible financial advice is going viral on TikTok

February 10, 2021

People are learning all kinds of new things on TikTok: how to do viral dances to popular songs, how to make hot cocoa bombs or paint an accent wall. They are also learning dubious financial information from unverified sources with millions of followers.

Personal finance TikTok, also known as #FinTok or #StockTok, has become a massively popular segment of the app that, at its best, is made up of experts who make videos discussing how to get out of credit card debt, explaining the difference between a Roth IRA and a 401(k), and encouraging young people to start investing for retirement.

At its worst, however, Finance TikTok perpetuates financial myths, scams, and dangerously misleading information. TikTok’s ability to take an average user’s video and show it to millions of people in a matter of hours or days is unmatched. As a result, 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. Other times, it’s business owners promising to make you a millionaire — all you have to do is give them your money first.

“I love the content, but people should not invest on the basis of a TikTok video,” said Josh Brown, CEO of Ritholtz Wealth Management, who has a YouTube channel and TikTok of his own. Not that it’s not good for young people to get interested in the stock market and personal finance — just that videos of unverified claims that happen to go viral might not be the best (and certainly shouldn’t be the only) source of information. “People would be better served reading books than following TikTok gurus on trades.”

What’s happening on TikTok is hardly a new phenomenon. Day trading has been around since the 1970s, and scams have been around forever. People tend to evangelize risky investments during a bull market, when it’s far easier to make money because the stock market is going up overall. During these times — and we’re in one now — it’s also far easier to position oneself as a financial genius, when really, everyone else is making money, too. 

Below, Vox business and politics reporter Emily Stewart breaks down 10 of Finance TikTok’s most viral investing videos and what they’re actually selling, and why you might want to think twice before falling prey to a get-rich-quick scheme, or worse, accidentally doing something illegal. This commentary is not intended to provide specific advice or recommendations on any investment product or strategy. The bottom line: The best financial advice is the kind that’s tailored to your life, and likely can’t be contained in a 60-second video. Speak with your own financial advisor or investment professional to decide what’s best for you.