Scroll for a little while on Tik Tok and it won’t take you long to learn something new.
Maybe it’ll be a random life hack about how to separate egg yolks and whites; what it looks like inside triple j’s offices; that percentages are reversible; how to make a viral pasta recipe; or why mixing alcohol with diet soft drinks will make you drunk faster than with full sugar ones (thanks Dr Karl!).
And, sooner or later, you’ll probably come across some financial advice.
A fair bit of it is innocent enough: like how to get started with micro investing, explanations on financial terms like “superannuation” and “ETFs”, or tips on how to budget more effectively and get better at saving cash.
As Vox recently pointed out, though, a lot of the money tips going viral on TikTok are actually terrible. There’s tips on stocks that are “guaranteed to make you rich”, for example; the “best” way to pay off a mortgage (there’s no “best” or universal way – everyone’s loans are different), plus there’s a tonne of straight up scams, pyramid schemes, or videos of strangers basically asking you to give them money.
“I think, with anything in life, but especially with money, if it seems too good to be true, it probably is too good to be true,” says Tori Dunlap, a finance influencer on TikTok known as herfirst100k.
“On Tik Tok it’s really easy to just keep scrolling and see a piece of content but not engage with it or be critical of it. But just like anything you consume, you need to do your research, especially if you’re going to invest money.”
Unlicensed financial advice is illegal in Australia
Here’s another thing to keep in mind when you’re browsing financial TikToks: In Australia, giving out financial advice is actually illegal, unless you’re a qualified financial adviser with an Australian financial services (AFS) licence.
(You can check if someone is licensed by searching their name, financial adviser number or ABN here).
So not only is the random ~finance~ guy filming Tik Toks in their bedroom potentially dodgy, they could also be breaking the law – with penalties carrying jail time and fines of up to $133,200.
Tori Dunlap also says that while Tik Tok can be a good foundation point for learning the basics or getting started with your financial literacy, it’ll never be the place where you can figure out exactly how to manage your money.
“In terms of setting your own financial goals and figuring out your own priorities, that is going to take some tweaking. It’s going to take figuring out which advice makes sense for you, and then molding it to fit your life.”
Bottom line? Take your financial advice on the internet with a grain of salt. And when in doubt, seek advice from someone who actually knows what they’re talking about and is licensed to help you out.
-ABC Triple J Hack
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Disclaimer: This article contains general information only. You should consider obtaining independent professional advice in relation to your particular circumstances.