TikTok says its users have shown an interest in personal finance and investing, with #sidehustle and #makemoney among the top hashtags related to the topic. The company removes posts and accounts that violate its community guidelines, which it identifies through a combination of technology that automatically flags content to its moderation team for review as well as reports it receives, a spokesperson said.
“We do not permit anyone to exploit our platform to harm others, which includes schemes to defraud individuals or steal assets,” the guidelines say. “We remove content that deliberately deceives people in order to gain an unlawful financial advantage.” The company didn’t provide details on how its algorithm works, or specific examples of content that was reviewed or removed.
TikTok’s appeal is its simplicity. Dry or complicated financial topics like taxes, investing or retirement planning are broken down and explained in no more than 60 seconds, complete with background music, visual filters, colorful text, and even dancing. But this multimedia format means it’s much harder to police compared with the text-heavy content on Twitter and Facebook, according to Cotter at Arizona State University.
The videos are having real-life impact, sometimes in a good way. Over the past year, 21-year-old Brandon To has made big changes to his financial life. He started contributing to a tax-free savings account, opened a retirement fund, invested in his first brokerage account and started a business, all within a matter of months.
Stuck in lockdown during the pandemic, he discovered financial influencers on TikTok and became obsessed with the idea that he could become financially independent and retire early. “Before TikTok, I wasn’t very motivated in school, I just wanted to finish my degree and get a job,” said To, who lives in Vancouver.
While scrolling through the app, he stumbled on a video that, through simple terms and the use of pictures and illustrations, explained how setting up a Limited Liability Company could help him pay less in taxes.
The knowledge he gained encouraged him to take a tax course in college, and he started his own online pet shop shortly thereafter. The business failed.
“It wasn’t successful, but TikTok did help foster my ambition to learn more about how to run a business,” To said.
He also learned from TikTok that “every year money loses its value.” (Or as we call it, inflation.) So he put a majority of his money into the stock market in March and since then, he says, his net worth has increased. To has now started his own TikTok channel to share his steps to success.
Steve Chen, 33, is a former public school teacher who runs a successful TikTok account, @calltoleap, that offers financial advice to about 360,000 followers. He set out to make finance and trading simple but with a disclaimer: His followers should always do their own research and that options vary depending on different financial goals.
Chen has gained less traction on Instagram and YouTube, and he attributes much of his success on TikTok to the platform’s algorithm. His most viral videos, with over 1 million views, are the ones that he said started an intense debate in the video’s comment section. When he explained in a video about how he achieved financial freedom by the age of 33, it spurred a lot of commentary. That engagement seems to have been picked up by TikTok’s algorithm, which featured the post in its “For You” page that lists “recommended videos” and can boost traffic.
Zippler has his own theory for why his post on living off credit card debt proved popular. “It went viral because TikTok has a very young crowd, and everyone’s always looking for that fast money and easy way to live, let alone live for free,” he said. “Everyone loves a shortcut in life.”
-With assistance from Emily Cadman and Marisa Gertz. This article was provided by Bloomberg News.