Financial paranoia is your best protection against bogus financial influencers on TikTok

Financial influencers on TikTok and other social media platforms claim to have the secrets that “they” (professional money advisors) don’t want you to know. These videos go viral because we all want to believe that The Man is keeping financial secrets from us little people.

Unfortunately, the most popular FinTok videos typically offer terrible advice, like how to get “free” cash from a Chase ATM (by committing check fraud), how to borrow $150,000 to buy an AirBnB (by maxing out credit cards), or how to hire your minor children and deduct their salaries to save on taxes (by committing tax fraud).

It’s easy to look down on anyone who is taken in by some of the more transparently bad TikTok advice. But before you judge, remember that every single one of us may be susceptible to financial misinformation. For proof, look no further than the long list of highly intelligent heavy hitters who were scammed by Bernie Madoff.

So how do we protect ourselves from the dubious financial influencers, scams, and lies that sound remarkably similar to reasonable advice? By embracing our financial paranoia.

What is financial paranoia?

I learned to be financially paranoid from my dear old dad, since he was both an overprotective father and a financial planner. Dad’s “stranger danger” lessons came with a heaping side of money safety—like teaching me to never give money to anyone going door-to-door. (“They know where you live, Emily!”)

From Dad, I learned to question ulterior motives, ignore unsolicited advice, and reject anything that sounds too good to be true. Ultimately, financial paranoia is the assumption that everyone is out to get your money, and it asks you to embrace these three facts:

1. No one cares about my money as much as I do . . .
2. Unless they’re trying to make my money their money . . .
3. And they won’t have to deal with the consequences of my financial mistakes.

Why paranoia is good

The word “paranoid” has some deeply negative connotations–as do “cheap,” “stubborn,” and “uses beer instead of milk on Lucky Charms.”

But even though we think of paranoia as the leading cause of tinfoil headgear, financial paranoia is not a pathology. Instead, it’s a prudent and healthy response to an outside threat. After all, it’s not paranoia if they really are out to get you.

And financial advice, services, products, institutions, and experts have made it clear that they are out to get your money. (To be charitable, not all of them are mustache-twirling villains. Some financial influencers just don’t know what they’re doing.)

Considering the epic financial scams, failures, and stupidity revealed in any passing glance at the news, adopting a sense of hypervigilance around your money is reasonable. Treating financial opportunities as a bad idea until proven otherwise will protect you and your money.

The one downside of financial paranoia is potentially missing out on good opportunities. But even this drawback isn’t so serious, since legitimate opportunities will still be there in the future. After all, buying Apple in 1990, 2000, or 2010 would have been just as savvy as purchasing it when it went public in 1980.

How to be paranoid

If you weren’t raised by an overprotective dad in the financial industry, financial paranoia probably isn’t second nature to you. But there are only two things you need to do to cultivate it:

1. Pause

A lot of scams, high-pressure sales, and junk financial advice rely on time pressure to force you to act. But unlike emergency medicine, the financial world has very few time-sensitive issues. You can almost always wait 24 hours while you think about a financial opportunity. (Even Uncle Sam lets you get an extension on filing your taxes!)

This is why you should commit to waiting before acting. If the time pressure increases when you say “maybe tomorrow,” you’ll know passing on the opportunity is a good decision.

2. Ask questions

Asking questions is one of the best ways to uncover a scam, since con artists hate having to explain themselves. But questions are also a valuable tool when you are gleaning information from social media financial influencers. Asking yourself the following types of questions can help you recognize when something is too good to be true:

• If this is true, why isn’t everyone doing it?
• What could go wrong with this?
• Do I understand how this works?
• What’s in it for them?
• Why are they giving advice to me?

It’s okay to be overprotective of your money

Paranoia is the opposite of trust, which is why it gets such a bad rap. But the financial world continually proves itself to be untrustworthy, and the consequences of misplaced financial trust can be disastrous. That’s why healthy skepticism is not just reasonable, but advisable.

Embracing that skepticism means you accept the truth about financial misinformation and acknowledge that no one will care about your money more than you do. You also commit to pausing and asking questions before taking any financial action.

If doing all this makes you sound paranoid, it’s worth it to know your finances are secure. And anyway—those tinfoil hats are kind of cute.