Money and investing on TikTok: Five tricks to avoid and why

Money and investing on TikTok: Five tricks to avoid and why

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  • New research from brokerage XTB reveals which #FinTock and #StockTock trends to avoid, and why
  • Some TikTok hacks with over 500,000 views are promoting extremely risky investment strategies that could leave investors bankrupt.
  • With hashtags like #investing, #money, and #stocks amassing over 43 million views on the platform, such misleading hacks are gaining more attention than ever before.

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TikTok is one of the largest social media platforms in the world, and people use it for more than just casual entertainment. Thousands of people are searching for money tips on the platform, from content creators who post tips and tricks to make money called “Investing and Money Hacks”. While learning about investing and how to manage finances should be encouraged, some of these TikTok hacks are very misleading and can be dangerous for a lot of people.

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Avoid these investment hacks and money on TikTok

To help debunk these misleading hacks, analysts at brokerage firm XTB identify five widespread “investment and money scams” for all the wrong reasons and explain why they should be avoided:

  1. Made 100% Back Hack – 597K Views

This hack is awesome – in a perfect world. This hack tells you to invest $1,000 in risky stocks and when you have $2,000, invest your initial $1,000 in a low-risk dividend stock, and keep repeating until you get rich.

The first glaring problem: 100% profit on risky stocks. If trading were that easy, we would all be millionaires. The average price return on the FTSE 100 has been 5.7% since 1983. Therefore, doubling your money on one stock – while possible – is probably a fantasy for the majority. Keep in mind that risky stocks are risky for a reason – you can lose everything just as easily as you can make money!

  1. How to Become a Millionaire Hack – 2.9 Million Views

This “hack” or “tip” simply says that once you save up to $2,000 from a “side hustle” or even a regular job, you can then turn it into $100,000 in “Cigar Butt” methods and CMARs and not diversify your investments. Who knew it was so easy to make a 5,000% profit?

Then the hack explains that you should make low risk/high reward investments until you reach $1 million.

This tip will only work if you have the Midas touch of stock trading, and turn every stock you invested into gold. Turning $2000 into a million dollars requires a tremendous amount of knowledge and effort, not to mention a lot of time and some luck along the way. This TikTok is very misleading and should not be taken lightly.

  1. Passive Income Hack – 3 Million Views

This TikTok hack shows that you should use passive income to pay for something you might want to buy – in this case a new truck. According to this hack, you should buy a home with a down payment of $25,000 which when rented out will cover the costs of your monthly truck payments.

It’s all well and good if you have $25,000 to put on a home!

  1. Cheap Cryptocurrencies Ready to Explode – 100K Views

These hacks highlight three or so cryptocurrencies that they claim are going to explode (see sharp increase in value). Depending on TikTok and the cryptocurrency they choose, they could be completely right or wrong – most of the time, the creators of TikToks have no idea!

If you’re looking to invest in cryptocurrencies, don’t blindly follow the recommendations you see online without doing your research first because, as we’ve seen with what happened to Luna, cryptocurrencies can go from the most promising to being worth absolutely nothing in the world. A very short time period.

  1. Hacking money for financial freedom – 666,000 views

This money hack claims that instead of buying a popular monthly subscription service like Netflix for $10 with your own money each month, you should instead invest $2,500 and use the $10 return in interest to pay for it — and continue to do so with every purchase you make. want to make it.

Two problems with this one:

  • You likely won’t have $2,500 to invest, but you will likely have an extra $10 of disposable income each month to pay for something like Netflix.
  • Not everything you invest in will return a profit. It’s always important to keep in mind that while investing as a whole can be a great way to improve your financial situation over time, not every investment you make will turn a profit. For example, you can invest that $2,500 in a company, but then its stock price drops, so not only will you get $10 per month in interest, but your initial $2,500 will be lower.

These are just a few of the financial hacks that are currently popular on TikTok. It’s always important to take any financial advice on social media with a pinch of salt – if you’re in doubt, or if it sounds too good to be true, it probably is!

Top 3 tips from the experts at XTB

  1. There is no get rich quick strategy. Don’t be fooled into thinking there. Investing is a skill that must be honed over years of experience.
  2. Have a trading plan. This is an essential step when you start investing. In this plan, you should consider risk/reward ratio, risk management, technical analysis, fundamental analysis, economic data, etc.
  3. Choose the strategy that best fits your personality, time, and knowledge. There are hundreds of strategies out there. However, if two investors choose the same strategy, then in my experience they will each get different results. This is due to the fact that we are all different people and deal with situations differently. For example, if you overreact to price volatility, day trading may not be a good idea. So try to choose the strategy that suits your style first, and then look for markets where this strategy can work successfully.

About XTB Group

The XTB Group consists of companies with one of the largest publicly traded forex and CFD brokers in the world.

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