Financial advice is turning into a more complex topic, especially since young people and entrepreneurs have taken it to social media platforms like TikTok, Instagram, and Reddit to navigate others through finance management.
Recent reports have shown that videos that are related to stocks, personal finances, and investments are likely to receive more traffic and views from the audience. Most social media platforms have carved out dedicated communities for sharing content about saving and investing.
Since personal finances are not a topic taught at school or at home, hence the majority of the people qualify as financially illiterate. These people are most likely to turn to Google and popular online videos, posts, and blogs to learn just about everything about finances which can lead to poor decisions and scams.
Internet and social media platforms have been more accessible than before and there are over 5 billion people using these platforms worldwide. This rapid growth in demand and traffic has spurred the rise of social media influencers who offer financial tips from their point of view and gain followers and publicity.
While we all understand social media to foster fake news and spread misinformation, there are still a few things to watch out for before taking action on any financial advice. Here are a few pointers to help you along the way:
Consider the entire picture before implementing one’s advice
Many influencers don’t have the option of the bandwidth to explain the full context behind a piece of information or advice. Similarly, social media platforms are better suited for brevity rather than the long-term content which could affect various areas of your financial life; for example, an investment can disrupt your financial stability and have a huge impact on your tax balance sheets.
Before you start considering financial advice, ask yourself if it is relevant to your future and try to understand it in the long run. If it is relevant to your future then work on it after researching it or ask the people around you for their opinion.
Tread carefully with anyone sharing investment hacks
Financial advice is supposed to be directed at a specific investment but should be customized for individuals. Many people sharing investment advice on live streams on Facebook, Twitter, Instagram or LinkedIn aren’t licensed people with much professional experience.
They instead share their opinions and things that luckily worked out for them, which may not necessarily work out for you since all advice varies on situations and an individual’s financial position. Anyone can use social platforms and spread words regardless of their background or experience. Only trained financials who have studied legislation and taxes can guide you with your savings, investments, and retirement planning.
More followers don’t make a person professional
Keep in mind that for seasonal social influencers creating content is their primary business and a source to earn money based on their media performance and work with advertisers. It is impossible to verify the credentials of an individual on social media.
Moreover, there is no way to prove that the person you are following is actually qualified or even knowledgeable on the subject. Use your discernment and consult financial professionals to give you the correct advice for your financial situation since finance planning is a vital part of your life at every stage and should not be taken lightly or experimented with.
