Scrolling through social media has become as routine as brushing your teeth. With over 5 billion users worldwide, social platforms are not just a means of connection but a hub for information—and financial advice is no exception. A quick dive into TikTok, Instagram, or YouTube reveals a flood of influencers offering strategies to save, invest, and grow wealth. But as a finance journalist, I can’t help but question: Are we too quick to trust what we see online when it comes to something as crucial as our financial well-being?
Social media is a powerful tool. It’s democratized access to information and sparked curiosity among younger generations about topics like investing, retirement planning, and debt management. “Social media has become a central part of our daily information consumption, including financial advice,” says Michael A. Scarpati, CEO of RetireUS. And he’s right—just look at the rise of hashtags like #StockTok and #FIREMovement. They’ve inspired a new wave of financially curious individuals, some of whom may not have otherwise explored these topics.
However, the very strength of social media—its ability to reach massive audiences quickly—is also its weakness. The sheer volume of content makes it difficult to distinguish credible advice from flashy, unvetted opinions.
For instance, I recently came across a video where an influencer with no financial credentials was recommending that people put all their savings into high-risk penny stocks, claiming it was the quickest way to wealth. No discussion of diversification, risk management, or even the possibility of losing everything. It’s moments like these that underline the dangers of blindly following advice found online.
One of the lesser-known issues with financial advice on social media is regulation—or lack thereof. “Due to strict FINRA regulations, most licensed financial professionals are restricted from providing specific advice on social media platforms,” Scarpati explains. This leaves a void often filled by unlicensed individuals who may lack the training or experience to guide others responsibly. While their content can be entertaining or even thought-provoking, it’s not always grounded in fact or expertise.
Think about this: Would you trust a random stranger on the street to manage your investments? Probably not. Yet, many of us are quick to act on advice from a viral video without asking questions like, “Who is this person? What’s their background? Are they qualified to guide me on this?”
Social media thrives on brevity. Complex topics like investment strategies are often distilled into 60-second clips or infographics. While this makes content more digestible, it also oversimplifies nuanced financial concepts. For example, the FIRE (Financial Independence, Retire Early) movement is often portrayed as a straightforward path of aggressive saving and investing. But the reality involves rigorous planning, detailed budgeting, and careful risk assessment—none of which can be adequately conveyed in a single post.
As someone who has spent years analyzing financial trends, I can confidently say that quick fixes rarely lead to long-term success. Financial literacy requires more than just catchy slogans and viral hashtags. It demands a commitment to learning and a willingness to seek out reliable, evidence-based guidance.
Does this mean social media should be avoided entirely as a source of financial advice? Absolutely not. Social platforms can introduce valuable concepts and spark important conversations. But they should be treated as a starting point, not the final word. Before acting on any advice, take the time to verify its accuracy and relevance to your unique financial situation.
One way to do this is by consulting licensed financial professionals who can provide personalized guidance. Platforms like RetireUS aim to bridge the gap between financial education and actionable advice by connecting users with independent advisors. This allows individuals to vet social media-driven insights against the expertise of trained professionals.
In my work, I’ve spoken to countless individuals whose financial decisions were heavily influenced by what they saw online. Some were lucky and stumbled upon genuinely helpful advice. Others weren’t so fortunate. One story that stands out is a young couple who followed an influencer’s recommendation to liquidate their savings and invest in cryptocurrency. When the market tanked, they lost nearly everything. Had they consulted a professional first, they might have approached their investments more cautiously.
On the flip side, I’ve also seen social media inspire positive change. A woman I interviewed in her late 40s credited a TikTok creator for introducing her to the concept of index funds, which eventually led her to build a solid retirement portfolio—after verifying the advice with a licensed advisor.
The takeaway here is balance. Social media can be a powerful educational tool, but it’s not a substitute for professional advice or thorough research. As Scarpati puts it, “While social media can provide a helpful starting point, it’s important to thoroughly vet the information and consult credible, licensed professionals before making significant financial decisions.”
In today’s digital age, it’s easy to get swept up in the fast-paced world of likes, shares, and viral trends. But when it comes to your financial future, a slower, more deliberate approach will always serve you better. Social media may spark the conversation, but the real work begins when you seek out the facts.