- New research by online investment platform XTB.com reveals some of the most viewed Investing Hacks on the social media platform TikTok that everybody should know about.
- These viral TikTok hacks are competing against some of the dangerous “get rich quick” hacks that can be seen on the platform, and are providing realistic, valuable advice to users.
- With hashtags such as #investing, #money and #stocks gathering over 43.5 million views on the platform, the popularity of these topics on the app are at an all-time high.
TikTok is the sixth most popular social media platform with the average user opening the app an astounding 19 times per day, and people are using it for more than just casual entertainment. Thousands of people are looking for financial advice on the platform, with content creators who post tips and tricks for making money called “Investing and Money Hacks” raking in hundreds of thousands of views.
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However, some of these TikTok hacks are very misleading and could be dangerous for a lot of people. According to a study by Personal Capital, around 55% of users turn to the platform for financial advice due to young creators making their videos easy to understand and digestible.
The Best Investing Hacks On TikTok
So, to help combat the misleading hacks, analysts at the online investment platform XTB.com have identified five of the most useful “Investing and Money Hacks” that have gone viral that anyone interested in investing should keep in mind:
“You can’t do everything all at once”
This hack is a great reminder for anyone who has come across a get-rich-quick TikTok that tries to tell you that you can become a millionaire overnight.
It takes on the example of someone who is 19 years old with $100,000 trying to turn it into $1m by the time he’s 25. The creator correctly reminds him that any investment that would achieve returns like that in such a short period of time will involve extremely high levels of risk, and that he’s more likely to lose it all than to achieve his goal.
The advice of “you can’t do everything all at once” is a great hack for anyone looking to get into investing as you must remain patient and set realistic goals for the future along with being able to happily live your present life whilst you invest.
The Power of Compound Interest
Although this may not be a hack as such, it does give young investors especially an insight into just how effective compound interest can be at building wealth over time. Similarly to the first hack, it teaches the value of patience and how if you stick at your level-headed investing strategy over a period of time it will be successful a lot more often than high-risk, high-reward strategies.
In this TikTok, they use the example of investing a large amount ($10,000) into an index fund today, which without adding even one more dollar would be worth $450,000 in 40 years when you’re set to retire. Alternatively, if you don’t have $10,000 dollars to invest at the moment, if you invest $250 a month into an index fund with a 4% interest rate, after 40 years that would add up to almost $300,000!
The 40-30-20-10 Rule
This TikTok hack explains a great strategy for beginner investors that is an effective and easy to remember method of diversifying your portfolio from the get-go. The strategy is as follows:
- 40% of your portfolio should go into dividend paying ETFs.
- 30% of your portfolio should go into large cap companies.
- 20% of your portfolio should go into growth companies.
- 10% of your portfolio should go into penny stocks.
Whilst any seasoned investors wouldn’t need such a strict rule for their portfolio allocation, this is a possible structure for anyone looking to get started!
Advice From Warren Buffett And Others
This hack seems quite straightforward as just a piece of general advice, but when it comes from people like Warren Buffett and even the “Wolf of Wall Street” Jordan Belfort, it must have some credence.
The hack is basically that if you’re unsure about which stocks to invest in or you haven’t got time to do the research, the most secure place to invest your money with consistent returns is in an index fund like the S&P500. As Jordan Belfort says in this TikTok: “The most successful hedge fund managers can’t beat the S&P500”.
5-In-1 Hack For 98% Of Traders
This TikTok creator has put together 5 tips to keep in mind when trading that will help you avoid extremely common mistakes that traders make and ultimately make you a better trader. The tips are as follows:
- Be realistic.
- Educate yourself before you start investing.
- Be consistent.
- Be emotionally disciplined.
- Learn how to react to the market instead of trying to predict the future.
These are just a select few of the investing hacks currently trending on TikTok, however if you would like to learn more about any of the hacks that have been featured above or about index funds like the S&P500 or the Nasdaq, you can visit XTB.com’s education website.
About XTB Group
XTB Group consists of companies with one of the largest stock exchange-listed FX & CFD brokers in the world. XTB Group has entities regulated by the world’s biggest supervision authorities including the FCA, CySEC and KNF.
