Social media platforms have quickly become a hub for advice on everything from skincare routines to stock tips. Among these, TikTok’s financial corner, often called FinTok, is booming. A 2024 study by Talker found that over half of Americans, around 53%, said they’re open to taking financial advice from TikTok creators.
Popular subjects include budgeting, credit scores, investing, and dealing with inflation. However, while some creators offer real value, others are spreading ideas that can lead to financial missteps.
Let’s break down a few of the most questionable pieces of advice circulating on TikTok and explore smarter, more grounded alternatives.
Never Pay Off Your House
Instagram | @kriskrohn | Kris Krohn shares risky home advice that many experts reject.
TikTok creator Kris Krohn suggested that paying off your mortgage is a mistake. His advice? Use a home equity line of credit (HELOC) to tap into the equity in your current home and use that money to invest in more real estate. This strategy, he claims, allows you to skip the savings process and immediately start building a rental property portfolio.
While it might sound clever on the surface, it’s far riskier than it seems. HELOCs often come with fluctuating interest rates, which can slash your potential profit. There’s also no guarantee your new property will generate reliable rental income. On top of that, managing multiple mortgages means more financial pressure and higher risk.
A more practical approach—endorsed by financial advisor Dave Ramsey—is to pay off your primary residence early while continuing to invest around 15% of your income in retirement accounts. Owning your home outright reduces financial stress and gives you peace of mind in unpredictable markets.
Deduct a Private Chef as a Business Expense
Karlton Dennis, a self-proclaimed tax strategist, shared a method where he brings in a private chef for what he frames as daily business dinners, then deducts the cost as a business expense. According to him, this tactic lets him enjoy chef-prepared meals while lowering his tax bill.
H&R Block didn’t take long to respond in his comments, advising viewers not to try this. The truth is, the IRS doesn’t see family dinners—no matter how many business clients are invited—as legitimate write-offs. Unless the meal directly serves a business function and follows strict documentation rules, it’s not deductible.
If looking for tax savings, it’s best to work with a certified public accountant who can help identify real, allowable deductions.
Use Your Allowance to Buy Real Estate
Grant Cardone made headlines with the suggestion that teenagers should use their allowance money to start buying real estate. He gave an example where a 15-year-old receives $300 monthly and uses that amount to buy a property that generates $30 per month in returns. The twist? They’re supposed to live only off that $30 while leaving the original $300 untouched.
Although the message about investing early is valuable, this specific plan is largely out of touch with reality. Most teens don’t receive that kind of allowance, and real estate isn’t typically accessible at such low entry costs. Also, minors face legal restrictions when it comes to property ownership and financing.
A more attainable path would be putting that allowance in a high-yield savings account or certificate of deposit. Parents can also set up a custodial investment account to grow the money over time until the child is old enough to manage it.
Buy a New Property Every Year With 5% Down
Freepik | Influencer promotes buying a new home annually with low down payments, beginning with a 3.5% down FHA multi-unit.
Another viral trend involves buying a new home every year using minimal down payments. One influencer explains the method: start with a small multi-unit property using an FHA loan at 3.5% down. Live in one unit, rent out the others. The next year, repeat with a condo or townhome, and the year after that, purchase a single-family house—each time putting down just 5%.
The plan sounds appealing, especially to aspiring real estate investors. But there are plenty of potential pitfalls. Approval for loans isn’t always guaranteed year after year. Unexpected costs like HOA fees, maintenance, and rising mortgage interest rates can quickly eat into returns. Worse, a lack of dependable tenants could turn your investment into a financial burden.
Dave Ramsey would strongly disagree with this method. His philosophy stresses being debt-free before investing in real estate—and using cash, not credit, for property purchases.
Think Before You Act on Social Media Advice
The financial advice that floods TikTok can be bold, flashy, and persuasive—but that doesn’t make it smart or safe. While some creators offer worthwhile tips, many promote risky shortcuts that gloss over real-world consequences.
Before acting on anything seen online, it’s worth asking a few key questions: Is the advice practical? What are the hidden costs or risks? And is it coming from someone with verified expertise?
Smart money management involves steady planning, thoughtful investing, and avoiding shortcuts that sound too good to be true. Financial advice should be grounded in reality, not shaped by social media algorithms.
