Social media has hooked young investors on finance, but a growing number are taking more and more risks. ‘Finfluencers’ and money experts say it’s time for some caution.

young people on phones
Young investors can make mistakes that can end up costing them

  • There has been an increase of financial education and advice content on social media apps, enticing young investors.
  • Recent research shows that young investors are following riskier, more short-term strategies to make profits.
  • ‘Finfluencers’ and money experts alike urge have urged young investors to be cautious.
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The rise of ‘finfluencers’ and huge surge in financial content on platforms like TikTok, Instagram and Twitter over the past 18 months has hooked a new generation on finance and investing.

Young investors are spending their spare cash on cryptocurrencies and stocks – with a large number of them following the advice they got from scrolling through social media, lured in by promises to get rich quick and beat the system.

Videos tagged #finance, #investing or #stocktok on TikTok have billions of views – a total of 7.5 billion at time of writing. Clips hyping stocks that are “going to the moon”, promising consumers they can easily turn $10 into $10,000 or kickstart a “doge revolution” dominate the financial social media scene and drown out educational content.

“The FOMO culture that dominates social platforms like TikTok, Reddit and Instagram has become a breeding ground for the marketing of high-risk investments shunned by the mainstream investment industry – often for good reason.” Myron Jobson, personal finance campaigner at Interactive Investor, told Insider.

Recent surveys have shown young investors are pursuing riskier strategies than older generations. Last month, Barclays research showed 21% of Gen Z investors are investing to take advantage of current market conditions and 16% are trying to “play the markets”.

Interactive Investor published a survey earlier this month showing more than half of young investors who have purchased bitcoin or dogecoin have done so using debt from credit cards, student loans and other types of loans.

A Motley Fool study conducted earlier this year showed that amongst Gen Zers particularly, social media plays a key role in how they make their financial decisions.

Not all financial social media content can however be labeled the same. With the same hashtags that promote questionable investment and financial advice, there are videos with sound advice explaining Roth IRAs, how to increase your credit score or the benefits of long-term investing.

Tori Dunlap, a money expert who started her first business at age nine and accumulated $100,000 worth of savings by age 25, is one of the ‘finfluencers’ who shares such content as part of her brand Her First $100K on TikTok.

She said even before TikTok, bad financial advice was everywhere – it was just delivered through a different medium. Her main issue with the app is the 60-second time limit on videos. This feature was recently removed, but longer videos are still rare.

“I have a lot of parameters because I only have a minute and so I am using TikTok hopefully for folks as a jumping off point of like ‘I’m giving you this bit of education, now go read about it,'” she said in a recent interview with Insider.

Dunlap believes problems arise when consumers stop questioning the content they are taking in – after receiving good advice once, it’s easy to keep trusting what you see online, she said.

“You have to go ‘does this seem too good to be true?’ and if it seems too good to be true, it probably is. Or, just google the person.” she said.

Jobson agrees – he recognizes some content is helpful, but warns consumers to approach online investment advice with caution and to check the credibility of those who are giving it.

“There are some good materials out there to help people on their investment journey, but, more generally, we have seen concerning social media posts.” he said. “The advent of broader online ‘influencers’ has seen rise of so-called ‘financial influencers’ – many of whom haven’t got a clue on what they are talking about to put it bluntly.”

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Gen Z investors are taking more risks, picking up bad investing habits in the hunt to get rich quick, survey finds

young people on phones
Young investors can make mistakes that can end up costing them

  • Gen Z investors are aiming to use market opportunities and make short-term profits, a Barclays survey found.
  • They trade often, take bigger risks and track their portfolios closely – habits criticised by investing experts.
  • At the same time, so-called ‘Finfluencers’ are sharing stock and investment strategy tips for fast, high returns.
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Gen Z investors are all about making quick gains. They trade more frequently, they take on more risk and are picking up other traditionally ‘bad’ investment habits in the process, a Barclays survey found this week.

“Over a fifth (21 per cent) of Gen Z investors say they are investing to take advantage of the market and 16% plan to ‘play the markets’ to get rich quick,” the survey found. Most Gen Z investors additionally planned to dissolve investments within five years, according to Barclays.

Over the past year especially, Gen Z investors have also become more prone to taking risks when investing – almost a third of survey respondents admitted to this.

“The last year has also seen younger investors pick up investing habits that are traditionally viewed as unfavourable,” Barclays noted. As well as an increased risk appetite and investing more speculatively, the survey found that Gen Z investors traded more frequently and monitored their portfolios more often and closely.

Gen Z, or “zoomers”, are generally understood to be those individuals born roughly between 1997 to 2012, to so-called Gen X parents.

Older generations were found to be more focused on long-term goals, like purchasing real estate, when investing and had not become significantly more susceptible to risk over the past year.

Throughout the COVID-19 pandemic and alongside the corresponding rise in retail trading, a new type of social media influencer has emerged – and it’s one that appeals to Gen Zers. “Finfluencers”, or financial influencers, are especially popular on TikTok, where over 45% of all US-based users are of Gen Z age, according to statista.com.

The hashtags ‘#FinTok’, ‘#StockTok’, ‘#finance’ and ‘#investing’, which are commonly used by influencers who share finance- and investment-based content, have almost 7.5 billion views between them. The type of videos posted under these tags however varies greatly.

On the one side, there are finfluencers that use their platform to provide financial education, fight back against sexism that still exists within the world of finance and investing, or show how they use cryptocurrencies to make purchases.

On the other side, many accounts promote specific stock investments or strategies – often leading with a promise of quick and high returns if users follow the approach. Videos with titles like “Stocks that will make me rich by 2022”, “Three penny-stocks ready to take off this week” or “How to retire at 22 years old” seem to dominate financial hashtags when scrolling through TikTok.

Crucially, finfluencers rarely are qualified financial professionals. Instead, they are often just dipping their toes into the investment waters as well. Many clarify this on their profiles, but this does not seem to stop audiences from following their advice and strategies.

A recent Motley Fool survey showed that social media buzz is the fourth most important factor in deciding whether to invest in a certain stock or not among Gen Z investors – highlighting just how influential finfluencers can be and how significant a role they play in young investing.

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From WallStreetBets to TikTok, finance is still all about ‘bro culture’ – but a FinTok ‘financial feminist’ and her over 150,000 followers are trying to change that

Jessica Spangler
Jessica Spangler advocates for financial feminism and empowerment on TikTok.

  • Some male TikTokers who are active on StockTok and FinTok still say finance is a man’s realm.
  • But rising female Fintok stars like Jessica Spangler are proving them wrong and advocate for financial feminism.
  • They aim to empower women to take control and understand their finances and investing.
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For some male TikTokers who are active on StockTok and FinTok, the social media platform’s financial niches, markets and investing are still ‘just for men’.

Age-old stereotypes of women not being able to understand finance, or needing men to explain investing to them, are constantly being retold. Male TikTokers often leave derogatory, insulting comments under the videos of their female peers and appear to be getting more likes and engagement on their content.

Major banks and financial institutions have strived to reduce the gender imbalance in recent years. Goldman Sachs is aiming to have 40% female vice presidents by 2025, 40% of JPMorgan‘s board members were female in 2020, 39% of Morgan Stanley‘s global employees were women, Christine Lagarde became the European Central Bank President, two of the six Federal Reserve governors are women.

Yet fewer than 1% of global financial institutions have achieved gender equality according to the Official Monetary and Financial Institutions Forum‘s 2021 Gender Balance Index. Only 15% of bitcoin and 12% of ethereum investors are women, a survey by trading platform eToro found earlier this year. And on social media, gender stereotypes are still all the rage.

“One of my first videos was talking about capital gains tax with short-term investing and just a whole bar of comments from guys: ‘she has no idea what she’s talking about, none of this is true, this is completely inaccurate’ and I was literally sharing factual information. I mean it’s not a debate, it’s not an opinion, it’s fact,” Jessica Spangler told Insider..

From simple comments like “you’re wrong” to mockery and full-blown insults – it’s all commonplace online. Scrolling through popular hashtags like #fintok, #stocktok, #investing or #finance creates a bleak image in terms of gender equality, with the vast majority of content being put out by young men. The “finance bro” community is alive and well.

Spangler, who has over 151,000 followers on TikTok and goes by the handle @ecommjess, says she is making ‘financial feminism’ a key part of her online brand.

“It is possible as a female to have a voice in finance, to take control of your own financial situation and to kind of advocate and empower yourself through financial education,” Spangler said. “It doesn’t have to be, you know, an old guy in a suit that gives you all your information,” she said.

“I just want women to feel like can have their own financial future and be financially independent and that they don’t need anybody else to, you know, handle their money for them,” Spangler said.

Spangler credits her commitment to financial feminism to her mother, who inspired her to take control of her own money.

She didn’t start her working life in the financial markets, despite having taken college credit courses on business and finance and completing certificates and an associate’s program in finance and business management in high school.

Spangler earned a doctorate degree in clinical pharmacy and began working in the field. After noticing how many women both at work, where a number were also educated to doctorate level, and in her personal life knew next to nothing about finance, she decided that had to change – and started her financial social media accounts.

In her videos, Jessica explains everything from 401ks and Roth IRAs to credit card rewards, as well as concepts such as extended warranty and capital gains tax. But she also uses her platform to actively encourage women to invest and educate themselves about finance.

“Ladies we can make money in the stock market, we will make money in the stock market, we are smart and powerful and wealthy, you’re already a boss, now be your own boss,” she says in one of her TikTok clips. Women celebrated her in the comments for the video.

In fact, the vast majority of her followers are women, she said. And they are more than keen to learn about finance – Spangler’s comments are filled with young girls and women asking for advice and further clarification. Any topics that help them set themselves up for a secure financial future are especially popular, she said. But she avoids giving direct financial advice and instead encourages them to educate themselves – a core part of her social media accounts’ mission.

“I am trying to educate, to provide people with the tools to assess information on their own and go out into the world and look into these things further so that hopefully they feel inspired to learn more and make their own decisions and mostly just feel empowered to make those decisions,” Spangler said.

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