Hello everyone, we would like to remind all of you that everything you see on social media regarding finances, investments, advices, insurances, etc. does not mean it is suitable for your financial situation. FINRA Foundation released a study, “Investors in the United States: The Changing Landscape”, in December 2022 and it states the majority of young investors use social media as a source of investment information. Tik Tok and Reddit are the ones that we noticed give out a good amount of false information. I would like to share several examples of false statements that we have seen so far.
The first example is “501(k) vs. 401(k): Let’s compare”. Actually, 501(k) is not a real type of account. It is a marketing term for a cash value whole life insurance policy.
The second example is “Infinite Banking” or “Bank on Yourself” concept is way better than contributing to any retirement accounts. This phrase is not necessarily true because it does not apply to everyone’s situation.
The third example is “You will not lose money because there is no risk”. Actually, any investment-related products will always involve some type of risk(s).
The fourth example is “Retirement accounts such as 401(k) or Roth IRA are worthless to put money in”. Actually, those can be good retirement saving vehicles to utilize. It depends on individual’s situation.
Ultimately, we encourage you to do your due diligence on any information you obtain from any social media before you make any financial decision. It is always a good idea to talk to a financial professional who has proper licenses and/or designations that can provide the information or assistance you need.
