TikTok, the Chinese-owned social media app best known for its young users and viral dance videos, is quickly becoming a forum for a different kind of moves – what to do with your money.
Search for #personalfinance and you will find that the videos associated with the hashtag have been viewed 4.3 billion times, while the #personalfinancetips content has 33 million views. The proliferation of money chats on TikTok, which has around 1 billion monthly users, indicates an increasingly eager audience for help on how to manage their money.
Just ask Tori Dunlap, a financial and professional coach best known on the app as @ herfirst100k. Dunlap, which aims to help women take control of their financial lives, joined TikTok last July and has since amassed 1.6 million followers.
“It proved to me that the folks on TikTok needed this financial advice. I didn’t think Gen Z would care, but they do a lot of it. It proves it’s needed in a non-judgmental way. and without shame, ”she told CBS MoneyWatch.
Dunlap, 26, often brings up topics like why it’s smart to start investing early in life, how to pay off debt, and job interview advice. The areas of investing and personal finance can seem impenetrable, “and one of the reasons women lack financial equality and we are left behind is that we haven’t learned these things. Our goal is to translate it into English for everyone, especially women, ”said Dunlap.
Nicole Victoria, who runs the @nobudgetbabe account with over half a million subscribers, also wants to empower women in particular to be confident about their finances.
“When it comes to personal finance for women, they are told to stop shopping and spending money on Starbucks. And when it comes to advice for men, they are taught to invest,” he said. declared Victoria. “I want people to know that cutting costs is just one part and that you don’t have to give up everything you love to get ahead financially.”
A large number of subscribers can also open up new revenue streams for the most popular TikTokers.
Nick Meyer, or @nicktalksmoney, is a 25-year-old Certified Financial Planner with over half a million subscribers on TikTok. He produces educational videos about money and the stock market – in addition to his daily work as a tax advisor at a small accounting firm based in Minnesota.
TikTok pays him a nominal fee per video viewing, which is enough for “about two weeks of racing,” Meyer said. But the real money, he said, comes from branded partnerships, including collaborations with tax preparation software TurboTax and Public.com, a platform that allows members to hold fractions of tax. ‘actions. “Once you start to have more subscribers, they get a lot more important. In the last couple of months, once I hit 100,000+ subscribers, I got a lot of deals. brand, ”he said.
Meyer’s TikTok video earnings now rival what he earns in his day job. Stopping “is probably something I will consider in the next few months,” he said.
“An extremely powerful platform”
Delyanne Barros, a lawyer and financial coach who calls herself @delyannethemoneycoach, said she joined the platform to educate people like her who are young, female and Latino – and are not used to learning to invest from their peers. Barros joined TikTok over a year ago and knew she was on to something when her follower count quickly grew to over 180,000.
“I realized that this was an extremely powerful platform and that people were hungry for this kind of information, especially the young Gen Z and Millennials who never did Found this information elsewhere. No one has talked about it with them at work or within their families, and suddenly here it is on TikTok, “she said.
Barros’ videos have covered topics ranging from debunking common investment myths to explaining the differences between savings accounts. She is also transparent about how much money she earns and spends.
“I teach new investors how to invest in the stock market and I’m on long-term investing, not meme stocks, day trading or crypto. I’m just trying to teach people what a 401 (k) is. (k) and an IRA, ”Barros said. “It comes down to the basis of long-term investing, which can be unpopular on TikTok where users hear about GameStop and AMC.”
“It distorts what the investment is supposed to be”
Indeed, some of the investment education on TikTok comes from legitimate and well-meaning creators like Dunlap and Barros, who are either knowledgeable financial coaches or even certified financial advisors who want to help 20 and 30 year olds. to learn the basics of investing and management. their money.
But there is a wedge between these types of creators and what critics call unskilled users who share bad financial advice with inexperienced or untrained TikTokers.
Examples include recommendations to invest in individual stocks and cryptocurrencies, regardless of what the fundamentals of the investment suggest regarding their high prices and risks. Beware of any hints that emulating another person’s investment strategy will work for you as well. Caveat emptor, also, any promise to “get rich quick”.
“It distorts what investing is supposed to be, and some people say, ‘Why am I going to invest for 20 years when I can earn this amount overnight? “” Barros said.
Dunlap advises investing for the long term, but recognizes that it may be at odds with the most popular type of content on TikTok.
“The definition of investing is putting time, sweat, blood and tears into something for a long time. Investing shouldn’t be sexy; it should be consistent and stable over a long period of time. time, ”Dunlap said.
“No cookie-cutter advice”
So how can personal finance newbies differentiate between good advice and bad advice?
- Know who you are receiving advice from. A quick internet search will likely tell you enough about a person to indicate whether or not they are qualified to talk about personal finance. For example, they may have confirmed credentials such as CFP (for Chartered Financial Planner), CPA (for Chartered Accountant), or RIA (Chartered Investment Advisor). “Ask the source. Do your research on who you are taking this education to. You need to determine if this is something that might even work for your life,” said Victoria of @nobudgetebabe.
- Trust your instincts. “If someone says you can make $ 1 million in a week, then yes, that’s too good to be true. If your gut tells you something is wrong, you probably shouldn’t trust that person, ”Dunlap said.
- Don’t trust the advice of designers who know nothing about your personal finances. “There is no cookie cutter advice that works for John Doe and Jane Smith. It is done on a case-by-case basis and it depends on many factors,” said Jeffrey Feinman, a New Yorker. CPA and partner of accounting firm DDK & Co. “I would be reluctant to take advice on TikTok as it is a personalized decision and depends on many factors including current earning capacity, future earning capacity, that you are the beneficiary of a confidence, age, all of those things. “
- Don’t expect to learn everything in 60 seconds. Think of a video as an introduction to a topic or concept that needs to be explored further. “I hope you engage more with this content, and don’t just say, ‘Okay cool, I watched the video – I know all there is to know now.’ said Dunlap.
- Ignore users who promote so-called “secure uninterrupted compound interest accounts” on 401 (k) s and other traditional savings and investment products. “If you’ve never heard these words before, beware as this is just a name for something else like life insurance that young people in particular don’t need,” said Barros. And Feinman took issue with the unfounded claim heard on some TikToks that investing in a 401 (k) is a bad idea: “I think the 401 (k) is a good vehicle,” he said. “I always recommend maximizing the amount so that instead of paying taxes, you use what you’ve saved in taxes to invest in yourself. I don’t agree with the advice not to and to put it in those other products instead. “