Becoming an Investor

Can You Trust TikTok’s Advice?

TikTok is rife with pitches for trendy, volatile investments, including cannabis and cryptocurrencies.

Recently, while I was at the gym, I overheard a conversation between two mothers. One of the moms’ sons, who is in middle school, wanted to invest in bitcoin in an account his parents would set up for him. While the women debated the best way to support the budding in­vestor, they remained puzzled about one thing: How did he stumble upon cryptocurrency in the first place?

I couldn’t help but chuckle to myself—partly because spending 10 weeks as an intern at Kiplinger will make you start to notice personal finance references everywhere you go, but mainly because, as a fellow member of Generation Z, I already knew the answer.

TikTok, the Chinese short-form-video app with an algorithm that hyper-personalizes content for a user’s customized page, has skyrocketed in popularity during the pandemic. Besides serving up memes, cooking tips and viral dance trends, the app has become a haven for amateur personal finance advice. Videos categorized under #fintok, a popular hashtag for money-related subjects, have accumulated more than 472 million views.

But like most social media platforms, TikTok is rife with misinfor­mation and pitches for trendy, volatile investments, including cannabis and cryptocurrencies. As these amateur investing videos gain more and more steam, how can you tell which ones to trust?

Consider the source. One of the main problems with personal finance TikTok is that there are no restrictions on who can offer advice. An amateur’s get-rich-quick scheme can be just as popular (often even more so) than advice from a veteran financial planner.

So take a look at the creators’ profiles. Do they have any professional certifications, such certified financial planner (CFP)? Do they have experience in the financial industry?

There are some qualified and trustworthy content creators on TikTok, and most share their credentials. For example, Nick Meyer (username @nicktalksmoney), a financial TikToker with more than 600,000 followers, includes his CFP credential in his profile—along with a disclosure that his content is meant to be educational, “not advice.” Other well-known financial media outlets, such as Yahoo Finance, NPR’s Planet Money and even Kiplinger (@kiplingerfinance), have also jumped on the bandwagon and created their own TikTok accounts.

Watch out for scams. TikTok has a massive reach, with more than 100 million users. So another strategy for evaluating personal finance TikTok videos is to consider whether content creators are using that huge audience to enrich themselves through scams, such as a “pump-and-dump” scheme, in which creators promote a thinly traded stock and cash out shortly after users buy in.  

Although TikTok has generated interest in investing, it’s no substitute for doing your homework. Seek financial advice from reputable sources, such as Kiplinger.com and professional advisers. When it comes to investing, experience counts.

Most Popular

Why Are Gas Prices Still Going Up?
spending

Why Are Gas Prices Still Going Up?

The cost of a gallon of gas is heading back toward its March highs. What’s driving the resurgence, and will gas prices go down anytime soon?
May 23, 2022
Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
Retirement Income Shouldn’t Depend on the Market; It Should Depend on Math
retirement planning

Retirement Income Shouldn’t Depend on the Market; It Should Depend on Math

The math isn’t as tough as you might think. It all starts with dividing your assets into three different buckets.
May 23, 2022

Recommended

Got Cryptocurrency or NFTs? They Need to Be in Your Estate Plan
cryptocurrency

Got Cryptocurrency or NFTs? They Need to Be in Your Estate Plan

Handled incorrectly, these popular assets could go poof. You need a password-sharing plan, a plan for naming beneficiaries and possibly a trust.
May 23, 2022
Buy Value Stocks, Says J.P. Morgan’s David Kelly
Markets

Buy Value Stocks, Says J.P. Morgan’s David Kelly

This investing strategist says to use valuation as your guide for stock investing opportunities in the balance of 2022. Plus, bonds are looking better…
May 23, 2022
Midyear Investing Outlook: Where to Invest Now
Kiplinger's Investing Outlook

Midyear Investing Outlook: Where to Invest Now

Much hinges on whether the Fed can guide the economy to a soft landing.
May 22, 2022
An Impact Investing Guide for Private Foundations
investing

An Impact Investing Guide for Private Foundations

Putting assets in service of mission can take many forms. Here are four distinct approaches to consider in your efforts to foster positive change in o…
May 19, 2022