TikTok, the Chinese social media app best known for its young users and viral dance videos, is quickly emerging as a forum for a different kind of movement: what to do with your money.
Search for #personalfinance and you will find that videos associated with the hashtag have been viewed 4.3 billion times, while #personalfinancetips content has been viewed 33 million times. The spread of money talk on TikTok, which has about 1 billion monthly users, points to a growing audience eager for help with their money.
Just ask Tori Dunlap, a money and career coach better known in the app as @herfirst100k. Dunlap, who focuses on helping women take control of their financial lives, joined TikTok last July and has since amassed 1.6 million followers.
“It proved to me that people on TikTok needed this financial advice. I didn’t think Gen Z would care, but they do a lot. It proves it’s needed in a non-judgmental, non-embarrassing way,” she told CBS MoneyWatch.
Dunlap, 26, often covers topics such as why it’s smart to start investing early in life, how to pay off debt, and interview tips. The field of investing and personal finance can seem impenetrable “and one reason women don’t have financial equality and we’re lagging behind is because 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 followers, also wants to empower women to feel confident in their finances.
“When it comes to personal finance for women, they are told to stop shopping and spend money at Starbucks. And when it comes to advice to men, they are taught how to invest,” said Victoria. “I want people to know that cutting costs is just one part of it and that you don’t have to give up everything you love to get ahead financially.”
Large numbers of followers 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 followers on TikTok. He makes educational videos about money and the stock market – in addition to his day job as a tax consultant at a small accounting firm in Minnesota.
TikTok pays him a nominal fee per video view, which is enough for “about two weeks of groceries,” Meyer said. But the real money, he said, comes from brand partnerships, including collaborations with tax preparation software TurboTax and Public.com, a platform that allows members to own fractional shares of stock. “Once you start getting a bigger following, they become a much bigger thing. In the last two months when I had over 100,000 followers, I got a lot of brand deals,” he said.
Meyer’s TikTok video earnings are now comparable to what he earns from his day job. Quitting “is probably something I’ll consider in the coming months,” he said.
“An extremely powerful platform”
Delyanne Barros, a lawyer and money coach who goes by @delyannethemoneycoach, said she joined the platform to educate individuals like herself who are young, female and Latino — and unaccustomed to learning about investing from their peers. Barros joined TikTok over a year ago and knew she was on to something as her following quickly grew to over 180,000.
“I realized that this was an extremely powerful platform and people were hungry for this kind of information, especially younger generation Zers and millennials who have never found this information anywhere else. No one talked about it with them at work or in their families, and suddenly here it’s on TikTok,” she said.
Barros’s videos have covered topics ranging from debunking widespread 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 about long-term investing, not meme stocks, day trading or crypto. I’m just trying to teach people what a 401(k) and an IRA is,” said Barros. It returns to the basics of long-term investing, which may not be popular on TikTok, where users hear about GameStop and AMC.”
“It distorts what investing should be”
Indeed, some of the investment education on TikTok comes from legitimate, well-meaning creators like Dunlap and Barros, who are either knowledgeable money coaches or even certified financial advisors who want to help 20- and 30-somethings learn the fundamentals of investing and managing. their money.
But there is a big gap between these types of creators and what critics call unqualified users who share bad financial advice with inexperienced or inexperienced TikTokers.
Examples include recommendations to invest in individual meme stocks and cryptocurrencies, regardless of what the investment fundamentals suggest about their elevated prices and risks. Beware of any hints that mimicking another person’s investment strategy will also work for you. Also, caveat, any promise to get rich quick.
“It distorts what investing should be, and some people say, ‘Why am I investing for 20 years when I can earn this amount overnight?'” Barros said.
Dunlap advises investing for the long term, but recognizes that this could be at odds with the type of content most popular on TikTok.
“The definition of investing is to put 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,” Dunlap said.
“There is no such thing as cookie-cutter advice”
So how can newcomers to personal finance differentiate between good and bad mentoring?
- Know from whom you are getting advice. A quick web search will probably tell you enough about a person to indicate whether they are qualified to talk about personal finance. For example, they may have confirmed credentials such as CFP (for Certified Financial Planner), CPA (for Certified Public Accountant), or RIA (Registered Investment Adviser). “Doubt the source. Do your research on who you’re taking this training from. You need to find out if it’s something that could even work for your life,” said @nobudgetebabe’s Victoria.
- Trust your gut. “If someone says you can make $1 million in a week, it’s too good to be true. If your gut feeling says something isn’t right, that person is probably not to be trusted,” Dunlap said.
- Don’t take the advice of creators who know nothing about your personal finances. “There’s no such thing as cookie-cutter advice that works for John Doe and Jane Smith. It’s on a case-by-case basis and depends on many factors,” said Jeffrey Feinman, a New York-based CPA and partner at the accounting firm. DDK & Co. “I would be hesitant to take advice on TikTok because it is a personal decision and depends on many factors, including current earning potential, future earning potential, whether you are the beneficiary of a trust, age — all those things.”
- Don’t expect to learn everything in 60 seconds. Think of a video as an introduction to a topic or concept to explore further. “I hope you’re into that content more, not just saying, ‘Okay cool, I watched the video — I now know everything there is to know,’ Dunlap said.
- Ignore users who promote so-called “secure continuous compound interest accounts” through 401(k)s and other traditional savings and investment products. “If you’ve never heard these words before, be suspicious, because it’s just a name for something other than life insurance that especially young people don’t need,” Barros said. And Feinman disputed the baseless 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 getting the most out of it so that instead of paying taxes, you use your tax savings to invest in yourself. I don’t agree with the advice not to do it and do it instead into these other products.”