Sully: Clears up personal finance misinformation found on TikTok
SAN DIEGO (KSUI) – People are learning all kinds of new things on TikTok: how to do viral dances to popular songs, how to make hot cocoa bombs or paint an accent wall.
They are also learning dubious financial information from unverified sources with millions of followers, according to KUSI Contributor Sully Sullivan.
Personal finance TikTok, also known as #FinTok or #StockTok, has become a massively popular segment of the app that, at its best, is made up of experts who make videos discussing how to get out of credit card debt, explaining the difference between a Roth IRA and a 401(k), and encouraging young people to start investing for retirement.
So Sully drilled down to explore it a bit – and some of what I saw was disturbing.
“Finance TikTok is definitely perpetuating some financial myths, scams, and dangerously misleading information,” said Sully.
Couple examples Sully noticed:
1) The claim: If you start an S corporation, you don’t have to pay taxes
What this really is: An S corporation is indeed a thing, but not a thing that means you don’t have to pay taxes.
2) The claim: The Federal Reserve has secret million-dollar bank accounts for every American citizen
What this really is: A myth!
3) The claim: Just buy Tesla calls!
What this really is: Options trading, a risky investment strategy for novice investors.
4) The claim: Just copy the investments of rich people!
What this really is: Copying public information filed with the SEC and a really bad idea – once the nfo is “out there” – its too late to take advantage of that exact trading strategy!
And finally – this iffy “one size fits all” piece of advice:
5) The claim: Actually, you should pay more on your mortgage
What this really is: There’s (still) no one right way to approach your mortgage, and you should talk to a professional.
Why you should think twice: This, again, could make sense for some people, and the best bet is to talk to a professional for advice.