30 Worst Pieces of Financial Advice You Should Avoid on TikTok
Have a TikTok account? If you’re on TikTok at any point during the course of your week, you’re bound to see some type of unsolicited financial advice. With over 4.2 billion views, #personalfinance continues to grow with scores of videos all geared to teach you how to manage your personal finances.
FinTok, the newly coined name for TikTok’s fast-climbing personal finance sector, is where self-proclaimed experts offer financial advice via video to money-weary viewers. Topics span the entire personal finance niche from side hustles to credit card debt, to navigating the stock market and trading to real estate and travel.
Unfortunately, with the growing number of “financial experts” weighing in, the number of misguided financial information has also increased. What’s even more troubling is that many of these financial experts are not credentialed or experienced in the world of personal finance. In fact, Paxful, a cryptocurrency trading platform, found that one in seven personal finance advice videos is misleading. These videos often encourage viewers to make risky financial decisions without disclaimers of those decisions' consequences.
Here, we help you uncover the very worst pieces of financial advice to ever hit the world of finance on TikTok.
Buy hotel points to save a ton of money on vacation.
No. of followers: 166.6K
Why it's not the best financial advice: This guru shows you how to save money by buying points offered by hotels and using those points to purchase your room. Buying hotel points to pay for hotel stays seems like a great idea in theory, but it's not that simple. In fact, it can be risky.
When you buy points directly from an airline or hotel chain, the room or ticket changing when you go to redeem it. Therefore, it can leave you with points you can’t use. The other risk is the fact that most points can’t be returned, so it’s cash you can never get back.
Before getting points, research your destination and possible hotels to see if you can get it cheaper than what’s being offered via a hotel or airline point system. Checking with third-party sites such as Priceline or AAA could save you more money than the points ever could, and you’re guaranteed your preferred room or destination.
Copy the investments of millionaires to become rich.
Advice from: CEOWatchList
No. of followers: 1M
Why it's not the best financial advice: This piece of financial advice has been going on for quite some time. This advises viewers to find wealthy investors and simply copy whatever investments they are making.
There are a few issues with this strategy. Copying investments of millionaires requires a good amount of capital and the capability to soak up the loss when it does occur. Picking stocks can be extremely tricky. Could you simply just follow what investments millionaires are making? You certainly can, but there are different timelines to consider on trades and time lags that need to be considered.
The other piece that this financial advice won’t tell is the strategy behind why these bigger investors are making certain trades or what the bigger picture is behind such investments. It’s risky to invest blindly based on the financial statement of a wealthy investor.
Everyone can make money as a successful day trader.
No. of followers: 111.5K
Why it's not the best financial advice: Day trading may seem like an easy and fast way to make money. Learn the stock market, trade and make a higher percentage back. As promised, you don’t need a college degree nor any prior training to get started. However, you will need capital, time and emotional stamina. Most day traders experience losses, while some lose their entire investment or go into debt if they use more money than they can afford to lose in the market.
The risk in day trading is often not worth the excessive time and potential risk involved. Building an investment portfolio that doesn’t require a ton of guesswork is often a better place to start with your money.
Don’t pay off your student loans (early).
Advice from: Cloebarmoneycoach
No. of followers: 67.5K
Why it's not the best financial advice: This TikTok account tells individuals not to pay off their student loans early but rather to invest the money they would spend on a student loan payment into the stock market. Student loan debt, for some, can reach hundreds of thousands of dollars. Not paying it off or paying it off slowly can result in higher interest rates, which means you're paying more in the long run.
This tactic might only work for those who can refinance their student loans as well. Refinancing allows you to potentially lower your interest rates, but it extends the payoff period even more. Waiting to pay off a debt, such as student loans, can lead to higher loan amounts, which can also negatively impact your credit score.
If you start an S corporation, you’ll avoid paying taxes.
Advice from: juliahurtlyrealtor
No. of followers: 169.8K
Why it's not the best financial advice: First off, avoiding paying taxes in any way (especially if you’re a business owner) is just bad advice. Avoiding taxes can lead to a long trail of issues from the IRS closing in on your business, personal property seizure, liens and other hosts of issues you don’t need as an individual growing your dream business. Secondly, starting an “S” corporation doesn’t help you to avoid taxes. Julia insists that if you start an “S” corp, you buy everything as a “company expense” and won’t have to pay taxes on it.
The issue here is that you’ll still have to pay FICA taxes on your salary, and then that salary is, of course, taxable. The IRS also watches S corps closely for these very reasons. In the video, Julia mentions that using an S corp this way is a “[crappy] thing to do,” and indeed, it is. Here’s more on why you need to avoid this piece of financial advice.
Retiring early (F.I.R.E.) is for everyone.
Advice from: CallumCarver
No. of followers: 284.4K
Why it's not the best financial advice: F.I.R.E. (financial freedom | retire early) has been a popular topic in the personal finance niche for quite some time. The promise to retire in 12, 11 or 10 years' time with a formula of cash assets and investments is seemingly tempting financial advice. Chris Woods, a financial planner and founder of LifePoint Financial Group, says that many aspects of the FIRE movement are exceptional, noting the fact that it advises lowering expenses and saving your money.
However, FIRE is not for everyone, as the title from this financial advisor on TikTok would come to suggest. Woods states that “much of this advice is taken out of context without much explanation by many of the influencers on TikTok”.
Everyone’s financial situation is different, and the advice from many FinTok influencers simply doesn’t take this into account. FIRE is not a one-size-fits-all approach and is not a realistic goal for many. This advice can easily be taken out of context in a 60-second clip.
Cryptocurrency will make you wealthy.
Advice from: Millionaire_Jack
No. of followers: 133.6K
Why it's not the best financial advice:Cryptocurrencies have certainly skyrocketed in popularity, but their unpredictability and shaky staying power make them extremely difficult to profit from, regardless of what crypto-investors like Millionaire_Jack state.
CEO Clayton Moore, founder at NetCents Technology, said that even though TikTok has played a huge role in getting the word out on cryptocurrencies, they are a space where a ton of fraud takes place. “Watch for the classic pump and dump: crypto-influencers who are just in it for a quick dollar.”
It has been commonplace for influencers to take payment on cryptocurrencies for their claims about a certain coin and then dump the currency once payment has been made.
IRAs and 401K investments are a waste of time.
Advice from: Sneller Financial
No. of followers: 220.2K
Why it's not the best financial advice: IRAs and 401Ks have been around for a long time — and for good reason. There is a thought that 401Ks and IRAs are nothing more than a scam put on by Wallstreet.
However, most financial advisors encourage the use of 401Ks and IRAs as part of a less-risky, long-term investment. These investments are recommended as secure savings in contrast to many other riskier investments highlighted by investment influencers.
Buy Tesla Calls.
Advice from: Biaheza
No. of followers: 226.1K
Why it's not the best financial advice: The video alone shows you the risk involved with investing in Tesla Calls. Options trading like this gives traders the ability to buy or sell shares for a certain period.
Although it is really simple to buy a call option on Tesla or any other stock, they are highly risky and very expensive. Due to the level of volatility, options trading is not for everyone.
Invest in gold and precious metals.
Advice from: thewealthschool
No. of followers: 1.7M
Why it's not the best financial advice: While the cost of gold and silver have been up in recent times, their predictability over the long haul as a stable investment remains to be seen by expert financial experts.
Therefore, the swarms of TikTok advisors pushing investments in gold or precious metals are not taking into consideration the long-term effects for investing in gold. As with certain investments, precious metals, such as gold, remain unpredictable.
Put the least amount down on your home purchase.
Advice from: Mr_brrr
No. of followers: 751K
Why it's not the best financial advice: One financial piece of advice floating around TikTok is the idea that putting the least amount of money down on one’s mortgage (about 5 percent) is a preferable method to save and even make more money in the long run. While this may appeal to some who don’t quite have a higher percentage down for their mortgage, many advise against this approach.
Putting less down might mean higher interest rates, the potential requirement of mortgage insurance and fewer mortgage options.
Copy past investment strategies.
Advice from: The Daily Trader
No. of followers: 931.8K
Why it's not the best financial advice: There are numerous TikTok videos that attempt to simplify the investment process by copying investment holdings, stocks and trades from managers that have performed well in the past.
However, high past performance on stocks can’t predict future performance, and while this TikTok video assures that there are teenagers making more money than their parents, the benefit simply does not outweigh the risk.
Make money fast (get rich quick).
No. of followers: 104.2K
Why it's not the best financial advice: For people who are looking to make cash quickly, FinTok has you covered with plenty of unsolicited financial advice. However, as popular as it is to search for ways to make a lot of money fast, there is just no fool-proof way to make hundreds in mere hours like this video would promise. Using a backdoor way of translating via Google translate to earn money on platforms such as PeopleperHour or Fiverr sounds like a great idea but only if Google translate is accurate enough. Translating seems simple enough, but some of the tasks can take hours depending on length, and if Google translate misinterprets text, you run the risk of not getting paid based on poor work quality.
The onslaught of side-hustle nation has proven how simple it can be to make money on your own schedule. The problem with this is, of course, the notion that you can make a full-time living using these platforms in just a few hours a week. While the potential might be there, the reality of side hustles is that they do require time, and the pay can be in short spurts, oftentimes in the form of gift cards or delayed by a week or more for your pay out. The phrase “make money fast” is used so often that there’s an almost even larger number of TikTok financial experts making videos to poke fun at how ridiculous some of the claims actually are.
Momentum trading is the best way to buy stocks.
No. of followers: 88K
Why it's not the best financial advice: Momentum trading or buying stocks when they go up and then selling them involves timing that can be extremely difficult. The practice itself is an old strategy and a risky one. It’s often hard to guess when a stock is going to go up or down.
There’s a large learning curve in determining the momentum of a stock as well as quite a bit of guesswork involved. Learning patterns of the stock market is necessary in order to succeed with this type of investment strategy.
Buy these certain stocks today.
No. of followers: 202.9K
Why it's not the best financial advice: TikTok is filled with financial “advisors” who direct viewers on which stocks or investments might be the most lucrative. Many of these experts have no credentials and base their recommendations on pure speculation.
The issue, of course, is that stocks and investments change from day to day regardless of what might seem like a good investment at the time. As well-intentioned as this financial advice may be, it doesn’t include the risk potential nor any updates to the current status of the stocks mentioned.
Become a millionaire by compounding interest.
No. of followers: 1.5M
Why it's not the best financial advice: There are a number of TikTok financial gurus out there boasting big claims that compound interest is the key to becoming a millionaire. It sounds amazing: Invest some money, let your money grow, and after some years, you’re rich. However, as this video shows you, compound interest only works when you have a significant amount of capital to put forth.
Other financial advice within the realm of FinTok instructs viewers how to turn $1,000 into $1 million in 100 days using compounding interest. Again, if it sounds too good to be true, it probably is. This technique involves using compound interest but in the stock market and within options trading — all of which come with huge risks for loss that far outweigh the potential profit.
While investing money monthly in compound interest may be a great idea for some individuals, it certainly isn’t the best route, and there’s no one set way to invest that works for everyone.
Make money renovating rental properties without spending any money.
No. of followers: 663.5K
Why it's not the best financial advice: Real estate and passive income seem like easy tactics to fast-track your way into becoming a millionaire. However, this financial advice often tells you to borrow money to buy the property, rent it and then use that rent money to renovate the home. The risk here is in the unknowns. Not all rental properties make money, and if yours doesn’t, you’ll have another mortgage to pay regardless.
Being a rental property manager is not as simple as these videos make it seem either. You may not have anyone to rent your property to initially, and finding qualified renters produces a whole other host of potential problems. So, while rental properties can be profitable, purchasing a property with debt is highly risky.
Use life insurance to buy real estate.
No. of followers: 122.9K
Why it's not the best financial advice: This financial advice tells its viewers to use the cash value of their life insurance to purchase a property. This advice doesn’t instruct the viewers on how to invest that cash in properties; nor does it explain the debt you’ll need to pay back if your real estate investment doesn’t cover what you buy.
Life insurance isn’t “free money” and will need to be paid back. The other risk, of course, comes in if you actually need your life insurance due to an unforeseen event.
Pay off credit card debt in full each month.
Advice from: limitlessculture
No. of followers: 564.1K
Why it's not the best financial advice: While paying off your credit card debt in full each month sounds like a great way to save on interest, you will need to show some evidence that you’re using the credit as well.
A balance between paying it off in full one month and then carrying a small balance the next month (under 6 percent) demonstrates that you’re using the card wisely all while keeping you well under your limit and keeping it at a bare minimum, so you can pay it off every other month easily.
Take small loans out against your life insurance to make money off of purchases.
Advice from: jerryfetta
No. of followers: 14.4K
Why it's not the best financial advice: This financial guru tells his viewers how he makes money from taking out a loan against his life insurance to buy a couch. Taking any loan out on your life insurance to purchase a couch, as this video suggests, is risky at best.
Most individuals who use their life insurance to make purchases often find themselves unable to make payments toward that loan and end up without the life insurance they need to protect themselves and their families.
Don’t pay taxes on your car.
No. of followers: 2.3M
Why it's not the best financial advice: This individual tells his viewers that everyone can avoid paying taxes on their car in states like California by “simply” opening an LLC in a state with zero sales tax and then purchasing the car. A few things to note here is that it can take quite a bit of time and money to open an LLC in another state.
Aside from this, if you purchase the vehicle in a state with sales tax, you’ll still need to pay the tax within that same state. Then, there’s the matter of using an LLC to purchase anything, especially if the business is not showing money on the books. You’ll need to report out to the IRS in some way, which takes even more time.
Using a debit card is bad.
No. of followers: 236.9K
Why it's not the best financial advice: This FinToker advises you to use credit cards over debit cards because debit cards don’t protect you from fraud, you don’t build credit with debit cards and there are few reward structures for using one.
The issue here is that your debit card holds your cash and your money far better than borrowed money, especially if you may have trouble paying it back in the long run.
Invest in IULs (life insurance) to become wealthy.
Advice from: IULstrategies.com
No. of followers: 371.6K
Why it's not the best financial advice: This FinTok advisor tells his viewers to invest their money in life insurance as a way to get wealthy. The problem with these claims is that investing in life insurance runs the risk of fees and hugely underperforming in the stock market.
Oftentimes, individuals who offer a specific stock or are trying to convince users to purchase life insurance, as this individual is, are trying to sell you a product.
Use your student loans to invest in real estate.
Advice from: khang.wtm
No. of followers: 3.2M
Why it's not the best financial advice: This financial advice directs students not to pay off their student loan debt but to simply invest the money in real estate and then pay it off later with their profits.
This financial tactic is cause for huge concern considering most people don’t know how to properly invest in real estate along with the fact that student loans carry high-interest rates. The time it will take to learn real estate investments, understand how to make a profit from that investment and then pay down the student loans, individual interest rates will have compounded, resulting in a much larger debt, not to mention possible collections and damaging credit scores.
Avoid paying taxes by setting up a corporation in another country.
Advice from: zac__hartley
No. of followers: 47.6K
Why it's not the best financial advice: FinTok influencers like this frequently offer advice on how to avoid paying taxes. This tidbit tells you how to avoid paying taxes as a business owner under a corporation by setting up businesses in other countries.
The issue, of coures, is that tax evasion is illegal, and once money is brought back to U.S. soil, you’ll get taxed on it.
Easily make hundreds of thousands of dollars by investing in an index fund.
Advice from: financial_cheat_codes
No. of followers: 29.1K
Why it's not the best financial advice: This advice tells you to open a brokerage account, buy an index fund and then you’ll end up with $100,000. There is no other direction as to how much money you’ll need to spend, how long this will take or if you could potentially lose what you invest.
Any type of investment offers potential, but there’s also risk involved. It’s best to consult with a financial advisor, so you know exactly how much to invest and all of the potential risks associated with these types of investments.
Short the stock market to become rich.
Advice from: sentrotrades
No. of followers: 13.5K
Why it's not the best financial advice: Shorting the stock market simply means that you’re short-selling based on the thought that the price of a stock or an asset is going to go down.
This financial advice is very risky and is generally for more experienced investors. Even if you’re given what stocks to use when shorting, you still face excessive risk and loss.
Pay as much as you can toward your mortgage.
No. of followers: 69.3K
Why it's not the best financial advice: This “Fin Influencer” tells her viewers if you pay half your monthly mortgage payment every two weeks, you can save money on interest and pay off your mortgage faster.
While this seems like a great idea in theory, there is ultimately no “correct way” to approach your mortgage. All mortgages are different, and speaking to a professional regarding the best strategy for you is the best way to handle your house expenses.
Don’t put your money in a savings account.
Advice from: kriskrohnreitv
No. of followers: 106.8K
Why it's not the best financial advice: This viewer advises not having any money in savings and putting it all in the stock market or in other investments. When thinking about your money, it’s good practice to spread out your cash in a variety of places so it mitigates the risk on several levels.
Placing all of your money in one financial basket or tool isn’t the best approach when it comes to making your money work for you. As with all financial advice, seeking a professional opinion is always best.
Pay no taxes on your income.
Advice from: thelegacyinvestingshow
No. of followers: 2.3M
Why it's not the best financial advice: This “Finfluencer” advises their viewers to simply move to Puerto Rico in order to avoid paying taxes. Due to Puerto Rico’s 0 to 4 percent tax, an individual would be able to not pay or pay little on their income tax if they lived in another territory such as Puerto Rico.
The issue with this, of course, is more logistics, as most individuals simply can’t move to Puerto Rico, buy a residence and meet the 183-day qualification process. The other side of this, is there is simply no “legal” way to avoid taxes.