The Power of Social Media On Finances & Gen Z
There’s a library of information on the ever-popular video posting application TikTok, and it’s taking on the world of finance.
The Age of TikTok
Almost half of the estimated 2 billion users on TikTok are under the age of 34.
In a survey done by Magnify Money, 41% of 18 and 24-year-olds and approximately 25% of investors ages 18 to 40 seek financial advice from the popular video posting platform. Financial videos tagged with hashtags such as #moneytok and #fintok have garnered 11.3 billion and 927.3 million views, respectively.
In other words, Gen Z is getting its financial education from social media, and TikTok is a popular medium to provide it.
Those on TikTok doing the teaching are a new wave of financial influencers, or “finfluencers,” and they are cashing in from their ever-growing audience.
A study by derivative trading provider CMC Markets analyzed TikTok profiles of the top creators and used marketing calculators to determine their level of influence on social media.
The top three, in particular, have had an interesting rise to fame and are making a significant impact.
The Number One ‘Finfluencer’
Based on the CMC Markets research, Erika Kullberg is the number one TikTok’ finfluencer’. The 32-year-old ex-corporate lawyer has a following of 8.9 million and earns over $7,000 per sponsored post.
In addition to teaching Gen Z about finances, she covers topics such as retail, employment, and law. Her video on using Nike’s two-year warranty to get free shoes garnered almost 75 million views. With that much exposure, she’s a force to be reckoned with on the app.
Erika became a content creator after paying off $225,000 in student debt within two years. Her passion for helping others with personal finance is lucrative. One of her TikTok videos reveals that she makes over $100,000 in revenue from YouTube. That, combined with a couple of sponsored videos on TikTok, provide more than the average income of a New York City corporate lawyer.
TikTok’s International Influence
With the extensive global reach of TikTok, an influencer in one part of the world can affect someone thousands of miles away.
English entrepreneur Mark Tilbury is having that kind of international impact. As the second most popular ‘finfluencer’ with 7.1 million followers, the 53-year-old earns between $5,000 and $6,000 per sponsored post, according to the TikTok Money Calculator.
He also has the highest engagement rate of anyone in the top ten of TikTok ‘finfluencers’, at 2.18% and an average of 154,650 likes per video.
Mark’s content includes advice and explanations on investing, spending habits, saving money and negotiating in order to become a millionaire.
His experience exemplifies the limitless possibilities for influencers or the endless room for growth and earning income.
How Finfluencers Have Leveraged Social Media
For some, social media provided the opportunity for change that could not have occurred elsewhere.
Duke Alexander Moore, also known as Duke Tax, had a history of filing for bankruptcy and was evicted from his apartment. Now, he is a Certified Tax Coach and Enrolled Agent, and currently one of Intuit’s QuickBooks top 5 Tax Advisors in Dallas, Texas.
He’s also the third most influential ‘finfluencer’ with 3.4 million followers. He leverages his past experiences and current work to post videos covering taxes. An example of his extensive impact: his video on President Biden’s stimulus plan garnered 10.6 million views.
Many influencers gain their following by posting personal stories and experiences. Their audience relates, and influencers are capitalizing on it.
How Trustworthy Are FinFluencers?
Personal successes of these ‘finfluencers’ aside, the question stands: How much can you trust someone on social media”?
While the top influencers have credible backgrounds and track records, it’s important to remember that any advice you take should make sense for your financial situation.
Additionally, consider the way these social media tycoons are earning an income. Much of it comes from sponsored content. Thus, they may have a bias toward the products they recommend. While they are required to disclose this information in their videos, as the consumer, you must pay attention and remember this.
Is FinTok Here to Stay?
The sheer number of people on TikTok, and the growth and popularity of finance topics on the app, support the idea that TikTok is the new financial news source for the next generation of young adults and investors. With its reach, impact, and earning potential for influencers, it’s likely going to be around for a while.
However, as with any investment advice or resource, it’s essential to keep in mind the source of information, credibility, and bias. Additionally, TikTok’s 3-minute videos can only go so far in-depth on a topic. You can never go wrong with doing your own research and due diligence!