You must be a fool to take financial advice from TikTok. Or are you foolish not to? Here’s how to separate the scams and the silliness from the legitimate and lucrative lessons.

5 minute read

Brandon Schlichter insists it’s easy to become a millionaire. He says he did it – starting with just a credit card.

Now he owns a newspaper, a trailer park, a laundromat, a car wash, and dozens of vending machines. All of them are located near his hometown of Circleville, Ohio (population 13,341).

Schlichter boasts of his self-made wealth in 260 TikTok videos, routinely showing off a briefcase full of cash and hawking DVDs (yes, DVDs) on “laundromat investing.” Yours for only $189.

Schlichter won’t say exactly how many DVDs he sold (“a few hundred”), but this much is obvious: He has 3 million followers, and his 60-second videos regularly attract upwards of a quarter-million views.

Meanwhile, Markia Brown also has a TikTok channel. She’s a certified financial coach from Hampton, Virginia, and her proven advice has 166,000 followers – a number Schlichter can eclipse in a single video featuring his briefcase full of cash.

With 30 million users in the United States and 80 million worldwide, TikTok can entertain you, educate you, deceive you, or scam you. Experts say there are easy ways to tell the difference. Let’s break them down into TikTok-sized bites.

TikTok: A good start but a bad finish

Shlichter and Brown are TikTok opposites.

Schlichter guarantees if you save $2,600 and consistently make credit card payments on time, you’ll reach a credit score over 700 in one year. With that kind of cash and credit, a bank will lend you enough to buy an entire apartment complex.

Brown calls that “dangerous.”

“One credit card with 12 on-time payments and low reporting utilization is not enough to purchase an apartment building with any type of loan,” she says. ”That ignorance, no matter if it’s willful or accidental, is dangerous when you’re positioning yourself as a subject matter expert on a social media platform like TikTok.”

Debt.com chairman Howard Dvorkin sides with Brown. The CPA and author has two college-age children who know all about TikTok, and he understands both its appeal and its limits.

“Maybe Brandon Schlichter did indeed buy an apartment complex after one year of properly using a credit card,” Dvorkin says. “However, that’s not good advice for everyone. I realize a briefcase full of cash is more alluring than Markia Brown’s no-nonsense advice, but the plain truth is: Saving money isn’t sexy.”

Both Brown and Dvorkin suggest using TikTok as a starting point. If something intrigues you, research it further. As Dvorkin says, “Don’t spend your hard-earned money because of what you heard in a 60-second video.”

Shorter is sexier but not smarter

Schlichter and Brown do agree on a few things. One of them: 60 seconds isn’t enough time to give good advice.

Schlichter’s TikTok videos are actually excerpts from his YouTube channel, where he records longer explanations that are much more in-depth and sedate. (There’s no briefcase full of cash, for example.) He spices it up for TikTok because, well, that’s what the platform wants.

“For some reason, the wonders of the Google, YouTube, and TikTok algorithms don’t like that kind of content from me,” Schlichter says. “They like it when I go and pull $3,000 out of a vault. You can either beat ’em or join ’em – and I join.”

Brown refuses to do that, although she’s tried dancing while delivering her solid, if less scintillating, financial advice. That leads Dvorkin to suggest, “If you want to be amused by TikTok, follow the craziest dancers. If you want to save money, just listen to the words. If those sound too good to be true, keep your wallet closed.”

Motives matter for your money

Besides their onscreen appearance, Schlichter and Brown represent diverging business models.

Brown uses TikTok to promote her counseling services. Schlichter considers TikTok a revenue stream, although not a stellar one.

Schlichter says TikTok doesn’t pay content creators as much as other social media platforms like YouTube. Still, he’s earned $11,000 in the past 18 months. That’s based on his traffic, which explains his antics and his briefcase full of cash.

Schlichter also makes money another way. The larger the following, the more he can sell. Every few videos, he recommends a stock to viewers. Those companies give him what he calls a “kickback.”

“If you have a brand and a following, you have influence,” Schlichter says. “You can use that influence to sell products or do what you need. Good creators know there’s a way to make money by having a following.”

Dvorkin winces at Schlichter’s words.

“CPAs like me talk all the time about listening to financial advice from experts with your best interests in mind – not their own,” he says. “I’ve launched companies just like that. One was a nonprofit credit counseling agency that, by law, couldn’t recommend a financial solution that made it money instead of saving you money.”

Credentials don’t matter

Anyone can create a TikTok account. There are no requirements for giving financial advice, and industry professionals struggle to gain a following.

Bo Hanson, for example, is a certified financial planner with a decade’s worth of experience. He holds a bachelor’s degree in financial planning from the University of Georgia and Chartered Financial Analyst certification – a title only 13 percent of those who attempt actually achieve.

Hanson is also the co-founder of an award-winning podcast called The Money Guy Show, which has a TikTok channel. But it has only 4,200 followers.

Hanson uses TikTok to promote his podcast, but he doesn’t see any value in using the platform to do much more than that.

“We live in this world where people are trying to get clicks and views by coming up with something new, interesting, and intriguing,” Hanson says. “A lot of times, it’s not valuable at all.”

Hanson issues this warning…

A lot of the stuff we see are people saying, “Look at my fancy house, look at my fancy car.” And they say, “I’ll teach you how to do this! Come buy my system, come take my course.” If someone had the key to wealth – the true secret to get rich quick overnight – they’d never give it away.

Is it foolish to take financial advice from TikTok?

Schlichter, Brown, Hanson, and Dvorkin all agree: It’s not foolish at all. But you can’t be gullible, either. Here’s their advice…

  • Don’t be impressed by followers and views. Just because a lot of people watch the videos doesn’t mean they’re financially sound. All it means is that they’re interesting. Even Schlichter agrees with this – and he’s a TikTok star.
  • Consider the source. Dvorkin marvels at how many people will consult Yelp before going to a new restaurant but won’t do any research before investing their money. “Always check to see if the person recommending something is profiting from it. If so, be wary.”
  • Use TikTok as a toe in the water. Brown and Hanson concede that solid financial advice isn’t always exciting, and it’s often confusing. TikTok is a great way to get comfortable with the topics. Then go elsewhere to chart a path to financial freedom.
  • NEVER give money directly to a TikTok creator. We haven’t talked much about the flat-out scams on TikTok, but Dvorkin says they’re the same everywhere: “They promise to get you out of debt today – if you make only a small deposit. They promise to eliminate your income tax bill – for a small fee. When you Google what they’re saying, you see just what a scam they are. People like me have written all about them.”

Schlichter compares the financial experts on TikTok – what’s become known as “FinTok” – to the pre-internet days when office workers got unsolicited faxes touting the last “get rich quick” penny stocks.

“A lot of people won’t apply much critical thinking beyond what they’re being sold, and that’s why there are so many scams out there,” he says. “The way I see it: TikTok is both a blessing and a curse.”

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About the Author

Joe Pye

Joe Pye

Joe Pye started writing about debt and personal finance five years ago while attending Florida Atlantic University, where he served as Editor-in-Chief of the student-run newspaper, the University Press. Before graduating with a bachelor's degree in multimedia journalism, Pye placed as a finalist for the Mark of Excellence award by the Society of Professional Journalists Region 3 for feature writing and in-depth reporting. In 2021, Pye earned First Place in the Green Eyeshade awards for "Best Blog" for his side-project BrowardBeer.com. Since taking a full-time position as associate editor at Debt.com in 2018, Pye has become a certified debt management professional who's applied what he's learned to his personal life by paying down more than $22,000 worth of combined credit card, student loan, auto and tax debt in less than two years.

Published by Debt.com, LLC