Why Some Are Turning to TikTok for Financial Advice

By: First Union | Date:

business-finance

Why Some Are Turning to TikTok for Financial Advice

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One would think that when a person is searching for financial advice, among the last platforms that they'd turn to would be TikTok, and yet that is exactly where many are going. TikTok, hugely popular and growing even more in light of the past couple of months, is especially utilized by Gen Zers. And many of them are starting to take financial advice and recommendations from the platform. Everything from home buying strategies to how best to invest in a 401k can be found on TikTok.

While the financial advice segment of users on TikTok is still relatively small, it seems to be increasing. The tag #investing hit over 275 million views as of last week. While corresponding tags such as #realestateinvesting and #investing101 followed suit racking up millions as well. Certainly, there are more mainstream, lifestyle categories that get billions of views, but those younger users out there seeking money-minded advice are starting to noticeably appear more and more often.

Many turning to TikTok and consequently searching for financial tips are just looking to learn some of the basics. There are thus videos that address the topic of debt, for instance. Those that share advice on how to save for the future. And even some that provide financial wellness tips for making it through a recession comfortably.

There are people however who are concerned about this growing TikTok trend. Financial experts worry that some of the videos are touting get rich quick schemes and unrealistic day trading expectations. One recent account suggests purchasing stocks hardest hit in recent months, assuring users that these industries would bounce back soon. For its part, TikTok does remove content that promises any such get the rich quick concept.

For many young people, TikTok represents a starting point when it comes to their overall financial journey. They go to certain accounts to learn the basics, as many just starting can't afford a financial planner to guide them in the right direction. From a practical perspective and in light of the "real world" advice that can be found on the platform, this strategy does seem to work for some. Down the road, they may find a need to go to more trusted sources for help with finances and investing, but again, this can be seen as something of a first step.

Many do warn about fraudulent accounts steering people in wildly wrong directions. It is important to understand where the information is coming from, how credible the source, and to what extent you should follow some or all of the advice being offered. Common sense does come into play here.

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