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HOW SOUND IS TIKTOK’S FINANCIAL ADVICE?

BY MOVIEGUIDE® CONTRIBUTOR

While many young people are turning to TikTok for financial advice, researchers warn that not every tip on the platform is good advice to follow. A new study found that 60% of TikTok’s financial advice contains “inaccurate” or “misleading” information. This statistic is fueled by many popular influencers who post about their affluent lifestyle and offer courses on how to follow in their footsteps. However, it is often through these courses that the influencers make the majority of their money rather than through what they teach. With millions posting about the methods they have used to make money, many younger people feel pressure to make investments they do not understand. This is especially true within the crypto space, where there is extremely high volatility, leading to jaw-dropping gains alongside the potential to lose every dollar invested. “My [younger] sister, she’s even investing in things like crypto coins, and she knows nothing about it,” one person told the researchers. Another dangerous financial trend that has become popular through TikTok is the ability to ‘Buy Now Pay Later’ (BNPL). Multiple BNPL apps have popped up in recent years that allow younger people to impulsively buy things they cannot really afford. When these payments become due, they are often paid off through other means of credit, further deepening their financial hole. Despite more than half of the information shared being faulty, it is no surprise that TikTok has become a hub for financial advice. Social media platforms like TikTok have become hubs for people to find information they would have previously found in newspapers. Last year, half of all U.S. Americans turned to social media for their general news. Unfortunately, the misinformation found within TikTok’s financial advice is also present in the news shared on the app. Movieguide® previously reported:

According to a new study, almost 20% of the videos presented to TikTok users contain misinformation.  Researchers at Newsguard, a journalism and technology tool that tracks information online, searched TikTok and Google for information about topics like COVID-19 vaccinations, school shootings, and the 2020 election.  They found that, compared to Google, TikTok “repeatedly delivered videos containing false claims in the first 20 results, often within the first five. Google, by comparison, provided higher-quality and less-polarizing results, with far less misinformation.”