TikTok Is the Place To Go for Financial Advice If You’re a Young Adult
The short videos are ideal for many people. But is the advice any good?
The short videos are ideal for many people. But is the advice any good?
TikTok is the place to go for new dances, viral taco recipes—and, now, financial advice.
The big benefit of TikTok is that it allows users to dole out and obtain information in short, easily digestible video bites, also called TikToks. And that can make unfamiliar, complex topics, such as those related to personal finance and investing, more palatable to a younger audience.
But can TikTok users, many of whom are in their teens, 20s or early 30s, trust the financial advice that is increasingly being offered on the social-media platform?
That advice runs the gamut, from general information about home buying or retirement savings to specific stock picks and investment ideas. Rob Shields, a 22-year-old, self-taught options trader who has more than 163,000 followers on TikTok, posts TikToks under the username stock_genius on topics such as popular stocks to watch, how to find good stocks and basic trading strategies.
Most times, TikTok users don’t even have to search for information that might appeal to them—it comes right to their feed based on factors such as their user profile and usage.
To be sure, TikTok isn’t the only social-media platform popular with young people that features financial advice. YouTube and Instagram carry videos with financial content as well. But TikTok is a hit with younger generations in part because of its quick-hit videos, easily navigated swiping functions and highly personalized content suggestions. And the numbers of young TikTok users viewing financial-related content on the platform of late have surged, a trend that many users and industry professionals expect to continue.
A survey conducted in late January by LendingTree’s MagnifyMoney unit shows about 41% of Gen Zers, those born roughly beginning in 1997 up until a few years ago, reported turning to TikTok for investment information within the past month, versus 15% of millennials, often categorized as those born between 1981 and 1996. Recent research from Greenlight, an allowance and debit-card app that recently launched a financial-education and trading arm, shows that 35% of respondents age 13 through 20 have turned to TikTok for personal-finance and investing advice.
“There are very few educational resources about personal finance that are accessible and compelling to young people,” says Tim Sheehan, co-founder and CEO of Greenlight. “So it isn’t surprising that kids are turning to social media. TikTok, in particular, provides quick, digestible content that can instantly capture your attention,” says Mr. Sheehan. However, he adds, “Misinformation dominates social media and it can be very difficult to discern the facts.”
Dana Eble, a 25-year-old public-relations professional in Detroit, says she likes the idea that she’s learning things on TikTok from people who are close to her age and don’t come across as judgmental or preachy about what she should be doing with her money. Many of the finance articles she sees online, she says, target people in their 40s and 50s and the advice isn’t always pertinent to her.
“A lot of people my age are living on a shoestring budget, and the advice on TikTok seems to match where younger people are in life,” says Ms. Eble. “TikTok doesn’t make me feel bad if I buy a Starbucks once a month.”
But some financial professionals and TikTok users themselves express concern about the accuracy of financial advice sometimes given on TikTok and a lack of transparency, in some cases, regarding the identities and qualifications of people giving the information. While some trained investment professionals post TikToks, there are other so-called social-media influencers who post about financial matters on TikTok who have little or no formal financial background. In some cases, it is hard to find a TikToker’s real name, and it can take legwork to figure out their qualifications or whether they have a personal financial motivation for promoting themselves on TikTok. What’s more, some TikToks contain misleading or wrong information, make overly rosy claims about investment potential or include overly broad statements that could lead to significant financial missteps, according to financial professionals and users who have come across these types of TikToks.
Content related to general budgeting, saving money, cutting expenses and making smarter purchasing decisions is pretty innocuous, says Brian Walsh, senior manager of financial planning at SoFi, an online personal-finance company that offers products like loans and investments as well as free financial advice. But Mr. Walsh says there are other TikToks that concern him, such as the handful he saw that claimed that a fail-proof way to invest is by mimicking the holdings of top-performing actively managed mutual funds. Such lists of holdings are only historical snapshots, Mr. Walsh says, and the technical factors that might have led a fund manager to purchase those stocks might have changed in the meantime.
Mr. Walsh says he also is bothered by TikToks he has seen that proffer advice about buying rental properties and leveraging the risk, and that encourage home buyers to put down as little as possible up front. While these strategies might be appropriate for some viewers, he says he is worried about the possibility of younger people—who might be more naive or trusting—blindly following overly broad advice and being harmed financially as a result.
For its part, TikTok, on its financial-related hashtag pages, warns users to be careful of the financial advice they see on the platform and to report behavior that might fall short of community guidelines. On its #fintok page, with more than 296 million views, it states, “Before following any financial advice, keep in mind that all investments involve risks and consider doing your own research.” The company places similar notes of caution on pages for terms such as #stocktips, #cryptotrading and others. TikTok also has consumer guidelines against fraud and scams, including multilevel marketing operations. In addition, many TikTokers add disclaimers to their profiles saying things like “my opinions” and “not advice.”
“TikTok aims to promote a welcoming atmosphere for people to learn and find entertainment,” a company spokesperson says. “We’ve seen our community embrace a range of enriching ideas and content, and we’re focused on supporting that with both creative tools and safety features to help that authenticity thrive.”
Potential concerns aside, many young people in their 20s and 30s say they find TikTok’s medium appealing and use it to help educate themselves about pertinent financial-related topics that they often haven’t learned in school or from their parents.
“Many millennials don’t want to sit through a 30-minute or an hour or full-day seminar on finance,” says Amanda Israel, a 35-year-old certified pediatric sleep consultant in Philadelphia, who uses TikTok to learn about various financial topics she’s unfamiliar with, such as teaching children to be savers, buying investment properties and business financing.
The platform is a good starting-off point for learning about topics such as budgeting and retirement, says Lindsey Tayne, a 23-year-old senior at Northeastern University in Boston. If something catches her eye on TikTok, she says she makes sure to read posters’ bios and Google the topics to learn more.
“It’s a very fun, easy way to digest and eat all this content up,” says Taylor Price, a 21-year-old influencer with one million TikTok followers. Ms. Price is also chief executive at TAP Intuit, a financial-education platform that focuses on Gen Z. Ms. Price, who majored in finance and management in college, posts on a variety of basic investing topics that many young people aren’t learning in school; recent subjects include debunking common money myths, renting vs. leasing, summer side hustles, her current investment strategy and how taxes work.
Before posting a money-related video, Ms. Price says she does “extensive research” about the topics. “However, just because I do my own research does not mean viewers shouldn’t do their own due diligence, too,” she adds.
Several TikTok users also say they’ve made financial decisions based on TikToks they’ve watched.
Kim Bayle, a 30-year-old footwear-company sales director in San Juan Capistrano, Calif., says she was recently inundated with TikToks about cryptocurrency and she decided to invest $100.
“I have no idea why I bought what I bought,” she says. “They just said buy ethereum, so I did. It feels kind of stupid saying that. But I find myself getting influenced on TikTok all the time.” Still, she says she feels comfortable with her small purchase. “Anything more than that, I probably would have been uncomfortable with it,” she says. She has also bought a number of stocks based on investment strategies she has seen on TikTok.
The best thing to do when considering advice seen on TikTok, experts say, is to double-check everything with a reputable source, such as a financial adviser or accountant, before acting. “If it sounds too good to be true, it usually is,” says Ivan Knauer, a securities enforcement and litigation attorney in Ballard Spahr’s Washington, D.C., office. “When you hear someone spouting their personal opinions from the TikTok mountaintop, you should take whatever they say with a hefty grain of salt.”
Several TikTok influencers say that young people should be encouraged to educate themselves financially and that they should not take influencers’ recommendations blindly. “It’s hard to tell what is real since there are so many people out there,” says Mr. Shields, the options trader and TikToker. While Mr. Shields feels confident in his expertise, he says others need to do their own research to make sure they are making solid financial choices for their circumstances. “Wouldn’t you want to research it yourself because it’s your money?” he asks. “I’m still a dude on the internet.”
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Supplier Foxconn plans to build more factories and give India a production role once limited mostly to China
Apple and its suppliers aim to build more than 50 million iPhones in India annually within the next two to three years, with additional tens of millions of units planned after that, according to people involved.
If the plans are achieved, India would account for a quarter of global iPhone production and take further share toward the end of the decade. China will remain the largest iPhone producer.
Apple has gradually boosted its reliance on India in recent years despite challenges including rickety infrastructure and restrictive labor rules that often make doing business harder than in China. Among other issues, labor unions retain clout even in business-friendly states and are pushing back on an effort by companies to get permission for 12-hour work days, which Apple suppliers find helpful during crunch periods.
Apple and its suppliers, led by Taiwan-based Foxconn Technology Group, generally believe the initial push into India has gone well and are laying the groundwork for a bigger expansion, say people involved in the supply chain.
Apple is emblematic of a move among companies worried about over dependence on China to move parts of their supply chains elsewhere, most often to Southeast Asia and South Asia. Diplomatic efforts by the U.S. and its allies to block Beijing’s access to advanced technology and strengthen ties with New Delhi have accelerated the trend.
The first phase of a Foxconn plant under construction in the southern state of Karnataka is expected to start operating in April, and the plant aims to make 20 million mobile handsets annually, mainly iPhones, within the next two to three years, said people with direct knowledge of the construction plans.
A further iPhone-producing mega plant is on Foxconn’s drawing board with capacity similar to the one in Karnataka, although the plans are still in a nascent stage, the people said.
Apple has also chosen India as its site for a manufacturing stage for lower-end iPhones to be sold in 2025. In this stage, known as new product introduction, Apple’s teams work with contractors in translating product blueprints and prototypes into a detailed manufacturing plan. Until now, that work was done only in China.
Combined with plans for expanded production at an existing Foxconn plant near Chennai and at another existing plant recently bought by Indian conglomerate Tata, these developments signify that Apple intends to have the capacity to make at least 50 million to 60 million iPhones in India annually within two to three years, said people involved in the planning.
Annual capacity could grow by tens of millions of units after that.
Foxconn indicated its commitment to India by announcing on Nov. 27 that it was investing the equivalent of more than $1.5 billion in the country, money that people familiar with the matter said would include production for Apple. The announcement didn’t mention the iPhone or name specific locations.
Global iPhone shipments last year totalled more than 220 million, according to research firm Counterpoint, a number that has remained steady in recent years. Because almost all iPhones are made in either China or India, China will continue to account for well over half of iPhone output.
Apple has faced challenges in China this year beyond trade tensions with the U.S., including the Chinese government instructing some officials not to use iPhones at work.
“India’s trust factor is very high,” said Ashwini Vaishnaw, India’s information technology minister.
This year, for the first time, India-made iPhones were introduced on the first day of global sales of the latest model, eliminating the lag with China-made phones.
Supply-chain executives say hourly wages are now significantly lower in India than in China, but other costs such as transport remain higher, and labor unions sometimes resist rule changes sought by manufacturers.
In May, the chief minister of Tamil Nadu state, where Foxconn’s flagship Chennai plant is located, said he would withdraw regulations allowing a 12-hour workday, weeks after the state passed an amendment authorising the longer hours. The chief minister, M.K. Stalin, attributed the decision to opposition from labor activists.
Karnataka state has stood by a decision earlier this year to extend the workday to 12 hours, up from a previous limit of nine hours, though companies must seek approval to do so. A state labor official, G. Manjunath, said new rules also allow companies to employ women on overnight shifts without seeking government approval.
After years of battling local-content rules and other red tape, Apple this year opened its first retail stores in India. Abhilash Kumar, an India-based analyst at TechInsights, said the top-of-the-line iPhone 15 Pro Max was selling well in the country, though it costs about $700 more than in the U.S.
Apple is also making progress in India toward building a network of core suppliers, long a strength of Chinese manufacturing. Officials said this week that Japanese battery maker TDK would build a new factory in India’s Haryana state to manufacture battery cells to power Indian-made iPhones. A TDK spokesman declined to comment.
The moves don’t mean Apple and its suppliers are leaving China. Apple Chief Executive Tim Cook has traveled to China twice this year, stressing the country’s importance as a production hub and consumer market. He visited Luxshare, a China-based assembler that is taking a bigger role in the China portion of iPhone assembly.
On social media, Apple has assured Chinese consumers that iPhones selling in authorised channels are made in China. At an industry event in Beijing that Chinese premier Li Qiang attended in late November, Apple’s booth stressed the company’s business with Chinese suppliers.
Foxconn Chairman Young Liu said in November that China would continue to account for the largest share of Foxconn’s capital investment next year.
Liu has visited India at least three times in the past year and a half, meeting Prime Minister Narendra Modi and other officials. People involved in the planning said Modi’s home state of Gujarat in the west was one possible site of a future Foxconn plant. Meanwhile, the company has other projects in the works in the southern half of the country for electronic components and a plant likely to focus on making AirPods for Apple.
The plant in Karnataka state is under construction on 300 acres of land near the airport in Bengaluru, a southern city that is considered India’s tech hub. Officials involved in the planning said Foxconn has secured approval to invest nearly $1 billion in the plant and is seeking the go-ahead to put in an additional $600 million or so.
Combined with other projects, Foxconn’s investments in the state are likely to reach around $2.7 billion, they said.
Some iPhones are also made at a plant near Bengaluru that India’s Tata Electronics agreed in October to buy from Taiwan’s Wistron. Tata Group is the first local company to take on manufacturing iPhones.
“Apple has created an additional spoke in its India strategy by roping in the country’s largest business group—Tata—to be a part of its manufacturing system in addition to Foxconn,” said India’s junior information-technology minister, Rajeev Chandrasekhar.
—Shan Li in New Delhi and Selina Cheng in Hong Kong contributed to this article.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’