In a time when financial advice is easily accessible, a lot of people—particularly younger people—are looking to social media sites like YouTube, Instagram, and TikTok for money management assistance. The old saying, "don't believe everything you read on the internet," certainly applies to the financial industry, even if these platforms provide an almost limitless amount of material.
The Allure and Risks of Social Media Financial Advice
The accessibility of social media and its producers' approachable, informal tone are what make it so appealing. The hitch is that not every "finfluencer" is legitimate or even truthful. Some social media stars are more interested in exploitation than in teaching, according to a recent article in Fast Company.
The report cautions that "some bad actors see dollar signs in a vulnerable audience," particularly when it comes to promoting dangerous investment methods or fast tax hacks that make quick money.
This is supported by a WallStreetZen analysis that reveals 63% of TikTok videos on stocks are deceptive. Even still, these films often get millions of views and shares, demonstrating how quickly false information may proliferate under the pretense of sound guidance.
In a warning of its own, the California Department of Financial Protection and Innovation (DFPI) pointed out that many producers "earn commissions on the products they push" and are not required to put the financial security of their customers first.
A Cautionary Tale
In one recent instance, a popular TikTok fad urged young employees to switch their W-4 withholding to "exempt" in order to increase their take-home income. After adopting the advise at its value, some customers were slapped with unexpected tax obligations. According to one young lady in a Yahoo Finance article, she now owes the IRS close to $5,000 and acknowledged that she was unaware of the distinction between withholding and tax due until it was too late.
These circumstances highlight the need of having a qualified expert confirm any tax or financial "hack."
The Importance of Professional Financial Guidance
Social media may introduce people to financial themes, but qualified tax specialists, certified public accountants, or financial counselors should always be the source of actual strategy.
These professionals are qualified to comprehend your unique circumstances and can create a long-term strategy that will keep you out of trouble with the law.
According to investing expert Brad Clark, "a lot of social media advice is designed to evoke fear or greed,"Bankrate said. That is immediately a warning sign. "Believing arbitrary advice on TikTok can lead people to gamble with their financial futures," he continues.
Final Thoughts: Trust Your Tax Pro
Not all we do is file paperwork. All year long, we act as your financial safety net. We are knowledgeable about the regulations, keep up with the most recent developments, and assist you in avoiding expensive errors. Above all, we don't act for clicks, likes, or affiliate commissions—we act for you.
Avoid using social media to ask questions or get answers. Speak with this office. You'll be grateful to yourself later.
