At a time when financial literacy can be lacking in younger generations, it seems that the popular social media platform TikTok is helping to bridge the gap. With content creators under clever pseudonyms like FinTok and StockTok offering tips in intriguing 15- to 60-second video clips, it’s not surprising that users are turning to the app for quick financial guidance.
How sound is the advice? It depends on what you’re looking for. A lot of users praise the app for educating them on topics they might not normally be interested in, such as credit and mortgages. Learning about the importance of building credit or how a mortgage works are helpful life skills. What gets a bit tricky are the flashy thumbnails grabbing viewers’ attention by claiming they know how to “make a ton of money trading stocks with no prior knowledge,” or advising viewers to “just always short the market to become a millionaire.”
While these clickbait titles may grab your attention and seem great, keep in mind they’re sensationalized to garner views. For all the useful information out there, there is as much misinformation and it’s easy for the lines between reliable content and bad advice to blur. Some of the investors in these videos have been lucky and offer explanations for how they got lucky – but they’re not sharing actual strategy or long-term planning.
As a young professional in finance, I get excited when I see young people taking an interest in the stock market or their own finances, especially when it’s on social media platforms that are so accessible. I love seeing financial content that is interesting, simple, and fast – but living in this culture of fast facts and quick information can also be dangerous.
My recommendation to those who have an interest in finance is to rely on more than one source and to get your own independent advice. A lot of these videos don’t consider important factors like risk tolerance, personal values, or long-term goals and -- unfortunately -- a 15-second video just doesn’t give you the full picture. Working with an investment advisor will ensure a fully explored strategy that draws on years of education, experience, and proven track records.
TikTok and social media are great vehicles for connecting us to the financial world (and for dancing videos of course) – just be careful, when you climb on board, about whom you take along for the ride.
- Monica Mazun
Associate Investment Advisor