Since I’m someone who is chronically online, the Chase Bank hack flooded my FYP when it went viral. And I very much screamed at my phone. With a simple Google search, people would have realized they were participating in check fraud.
Following bad advice could set you back months, or even years, in your financial journey. This is especially true when you go to social media for your financial advice. Of course, there are legitimate creators out there who offer good advice, but they’re often eclipsed by other influencers who have more audacity than sense.
[Read: Best Credit Cards.]
Digital Courses Are the New Pyramid Schemes
“Buy my course” is the new “Be your own boss.” Influencers tout how much they make every month and say you can do the same if you just buy their course. While this isn’t illegal, it doesn’t mean it’s not a scam.
These are master resell rights, or MRR, courses. You’re pulled in with some fancy sales pitch only to realize your new job is getting other people to sign up for these courses as well. The problem is this closely resembles a pyramid scheme.
Many of these courses also promise huge returns that often seem too good to be true. (Spoiler: They are!) You can definitely make money with online side hustles, and some online courses are perfectly legitimate and helpful. But you need to scrutinize every bit of advice that comes across your screen because a lot of influencers don’t actually care about helping you; they care about helping themselves.
‘Avoid These Credit Cards’
I’ve seen these videos pop up from time to time. An influencer will recommend a certain set of credit cards while disparaging others for one reason or another. But credit cards are unique to the individual. Just because one creator doesn’t see the value in a credit card with an annual fee, for example, doesn’t mean it won’t work for you and your circumstances.
What’s worse is many of these influencers don’t disclose if they’re making money from affiliate links. Ask yourself, “Why is this creator recommending this specific credit card or cards?” If they have something to gain from your getting a specific credit card, be wary.
[Read: Best Rewards Credit Cards.]
Check an Influencer’s Credentials
Remember, just because someone has podcast equipment doesn’t mean they’re worth listening to. Hundreds of thousands of followers don’t equate to expertise unless the podcaster has the credentials to back it up.
It’s no secret financial advice can be a bit dry and boring. So finfluencers need to spice it up if they’re going to get those views. As a result, a lot of the advice floating around is misleading, wrong or even illegal.
According to a 2024 report by Edelman Financial Engines, 27% of social media users said they believed financial advice they found on social media that turned out to be false or misleading. And 19% have fallen for this type of content more than once.
I recommend finding a few legitimate influencers and then look up whom they follow. Look for people that have the proper credentials like certified financial planners, financial consultants or advisors, and financial journalists (hi!).
Some of my favorites to follow are Humphrey Yang (@HumphreyTalks), Tori Dunlap (@HerFirst100K) and Robert Ross (@Tik.Stocks). Yang talks about investing and is a former financial advisor. Dunlap focuses on tackling taboo financial topics and wrote a New York Times bestselling book called “Financial Feminist.” Ross is a professional stock analyst and gives stock market tips.
[Read: Best Student Credit Cards.]
There’s No (Legitimate) Way to Get Rich Quick
These “get rich quick” schemes are just that — schemes. Some common ones involve real estate and passive income. One popular piece of advice I’ve seen floating around is to borrow money to buy rental properties and then use the rent you make from these properties to cover bills. You can then flip the property in the future for a profit.
Sounds reasonable in theory, right? But putting yourself in debt in the hopes your rental will make money is risky. If you’re unsuccessful, you still have to pay that mortgage one way or another. Plus, managing rentals isn’t exactly easy.
In 2023, experts at the Swiss Finance Institute analyzed 29,000 finfluencers and divided them into three categories: skilled, unskilled and antiskilled (defined as those with negative skill). They found that 28% of finfluencers provide valuable investment advice that leads to a positive return.
However, 56% of finfluencers were categorized as antiskilled, and following their advice leads to a negative return. Perhaps unsurprisingly, the unskilled and antiskilled finfluencers had “more followers, more activity and more influence on retail trading than skilled finfluencers.”
So if a finfluencer is telling you how to “beat the market” or “use this hack to earn $10,000 a month without doing anything,” maybe take a step back and ask yourself, “If this is so easy, why isn’t everyone doing it?”
Final Thoughts
TikTok is a great place to start the conversation when it comes to financial literacy. We should all be a little more open when it comes to finances so we can work to dissolve the stigma that comes with certain circumstances.
But it’s important to not take everything at face value and take all advice with a grain of salt. Because what worked for someone else might not work for you.
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