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TikTok’s 5 Worst Investment Tips-News-Herald

This article provides educational information. NerdWallet does not provide advisory or intermediary services. We also do not recommend specific investments such as stocks, securities or cryptocurrencies.

If your stakes are low, do-it-yourself is fine. Everything you need to know about drywall patches is on TikTok. But what if your stakes are high? Would you like to rewire your house after watching some TikTok videos? Probably not, and the same logic applies to financial advice.

Pour your savings into your investment (or any product) is generally a bad idea. But how do you know which advice is valid and which is secondary? Below, experts review the worst investment advice we’ve seen recently on TikTok and other social media.

1. The FIRE movement is for everyone

FIRE stands for “financial independence, early retirement,” and the acronym is appropriate given how the move spread on social media. Chris Woods, Certified Financial Planner and Founder of the LifePoint Financial Group in Alexandria, Virginia, states that many of the core beliefs of the FIRE movement are excellent.Multiple streams of income to help you Retire early, This can all be a sound financial decision.

The problem is that everyone’s financial situation is different. Financial planners spend a lot of time learning in advance as much as possible about someone’s own financial position before making a proposal. And for some, the FIRE movement may be a good goal, he says. But it’s not for everyone, and sound bites from social media influencers can’t take into account your personal situation.

“A lot of people will do what these influencers are saying, even if it’s not right for them,” Woods says. “It’s one of my big comprehensive disappointments or dissatisfactions with the influencers out there, often because they’re talking about this without context.”

The next time you see someone living the best #vanlife and boasting of retiring at the age of 30, remember looking at the highlight reels. Their financial situation may have been completely different from yours, and there is no guarantee that working for them is right for you.

2. Forget about 401 (k) and IRA

Funding a retirement account like a 401 (k), IRA, It’s old.

Tiffany Kent, CFP and Portfolio Manager at Wealth Engagement LLC in Atlanta, said:

Kent says that to stand out on social media, no one can talk about a typical retirement account over and over again, no matter how proven they are. The boring thing doesn’t make viewers feel like breaking that Like button.

Instead, they talk about new, complex, and sometimes confusing products just to stand out from the crowd. Sometimes the ideas are a little inconsistent, and sometimes they are completely weird. But according to Kent, this approach is absolutely the wrong way to get financial advice.

“If it’s boring, that’s good,” says Kent.

3. Precious metals are the best long-term play

Gene McManus, CFP, Certified Accountant and Managing Partner of AP Wealth Management in Augusta, Georgia, argues that precious metal IRAs (investing in gold and silver instead of stocks and bonds) are a better choice. I said in an email. Typical IRA.

He said strategic aides claim that the precious metal IRA better protects your money from inflation, global supply shortages, financial market collapse and more.

But McManus disagrees.

“The long-term history and achievements of gold and silver do not indicate that they are a rewarding asset class,” he said. “In the short term, it can exceed the S & P 500, but in the long term, it doesn’t make sense to own it specifically in the portfolio, either exclusively or overweight.”

4. Hundreds of thousands of people can’t be wrong

Certainly numbers have power. But it’s just as fair to say that mob spirit, echo chambers, and hype can hinder rational decision-making. Anthony Trias, CFP and Principal of Stonebridge Financial Group in San Rafael, California, Investing in stocks They’ve heard it mentioned on social media — no matter how astounding the claims of future potential — are because so many people were talking about them.

“There will be 300,000 people on social media who say one thing,” says Trias. “But wise investors block noise, do due diligence, and find out who they are actually listening to.”

Trias also reflects Woods’ concerns. He says it’s problematic to validate investment ideas based on social media hype. Because investment decisions should be highly tailored to you and your needs, which is not possible on social media.

5. Your cryptocurrency will definitely go to the moon

All rocket emojis in the world couldn’t give anything worthless Cryptocurrency Long-term sustainability, regardless of who is pumping it.

Clayton Moore, founder and CEO of crypto payment system NetCents Technology, said in an email that attractive platforms like TikTok helped disseminate information about cryptocurrencies, but they are also a breeding ground for fraud. rice field.

“You have to be careful of the crypto influencers who are participating in it to make money right away,” he said. “Classic pumps and dumps.”

Moore said it’s common for crypto influencers to accept payments in exchange for making barbaric claims about coins, and only give up their support for them once the check is cleared. rice field.

“If there’s a 99% chance that it’s too good to be true, it’s true,” Moore said.

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Chris Davis is writing for Nerd Wallet. Email: cdavis@nerdwallet.com.

TikTok’s 5 Worst Investment Tips-News-Herald

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