It's hard to ignore a flashy video that makes making money look easy, but a lot of self-proclaimed financial gurus are popping up on social media and their advice could get you in financial trouble.
Financial advisor Stewart Willis with Asset Preservation Tax and Wealth has three red flags you should swipe past.
First, he says the "buy now, pay later" trend is risky and sometimes deceptive.
There's no shortage of apps offering a hybrid between credit cards and layaway, playing off instant gratification. Influencers often brag about the big-ticket items they're able to buy with the various payment plans. Willis warns it's creating a new generation of debt.
"Even if you have a zero-percent interest rate, all of that goes away if you miss a payment or are late on a payment. It's not as it seems oftentimes," he said.
Second, he cautions against buying into celebrity investment endorsements, like cryptocurrency. In fact, several big names have had to pay fines related to their posts about crypto. The thing to remember is those celebrities often have money to lose through investments and they're also being paid to tell you you can't lose.
Finally, tax-loss harvesting is a way to use your losses to offset your gains. Willis says a 30- to 60-second video is not going to cover it and there are several over-simplifying the process.
"They're trying to make tax-loss harvesting look really easy and it's not. There's a lot of factors to consider," said Willis, who adds that a misstep with this could cost you and get you in trouble with the IRS.
"Honestly, people are just getting wrong, it's way too simple the way they make it look online."
The best financial advice is personalized, and you should always get that from a verified financial advisor.
