Financial Advisors Debunk TikTok Money Advice

Start a free trial, and get 50% off your first year of Monarch Core Tier with code MONEYGUY at https://bit.ly/monarch-moneyguy Is TikTok money advice actually helping you build wealth—or encouraging costly investing mistakes? Financial advisors Brian and Bo react to viral personal finance advice about saving money, emergency funds, Roth IRAs, index funds, stock picking, taxes, entrepreneurship, and financial independence. From investing $50 a week to claims of turning $2,500 into $100,000, they separate useful financial principles from risky shortcuts. If you’re wondering how to start investing, how much to save, whether the S&P 500 can build wealth, or whether you need to own a business to become wealthy, this breakdown reveals what smart long-term investing actually looks like. ⁠⁠⁠⁠Jump start your journey with our FREE financial resources⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠Reach your goals faster with our products⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠Take the relationship to the next level: become a client⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠Subscribe on YouTube for early access and go beyond the podcast⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠Connect with us on social media for more content⁠⁠⁠⁠⁠⁠⁠ Bring confidence to your wealth building with simplified strategies from The Money Guy. Learn how to apply financial tactics that go beyond common sense and help you reach your money goals faster. Make your assets do the heavy lifting so you can quit worrying and start living a more fulfilled life. Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Brian Preston?

  Hey, hey, hey, we're back with some TikToks that are unleashed and about to be debunked.

• 0:06Speaker 01

  Brent, I am so excited. Here we go.

• 0:08Speaker 02

  Number one, take your monthly income and multiply it by 200. That's a run target for how much you should aim to have invested if you want your investments to eventually replace your income. Number two, take your monthly income and multiply it by 0.1. That's the minimum amount you should aim to invest every single month. Number three, take your monthly income and multiply it by four. That gives you a simple target for how much you should have saved for emergencies. And number four, take your monthly income and multiply it by 0.55. That's roughly the maximum you should aim to spend each month on essentials like housing, groceries, bills, and transportation.

• 0:38Speaker 01

  I'm not, I'm not great at math. I'm good at math. I am good at math.

• 0:41Brian Preston?

  Public math.

• 0:42Speaker 01

  I'm not great at like fast.

• 0:43Brian Preston?

  You're good at math, it's troubling to do public math.

• 0:46Speaker 01

  So, okay, so one of the things says, take your monthly income, multiply it times 0.1 to figure how much you need. That's 10% savings rate. I kind of disagree with that. I think you gotta be saving.

• 0:55Brian Preston?

  I think that's a little low, especially for young people. I mean, well, look, if you're in your twenties, I'll just be glad if you do anything.

• 1:03Speaker 01

  Sure.

• 1:03Brian Preston?

  Because we know the typical starting age for saving and investing in America is around 30 years age. So if you're in your twenties, yeah, all right, let's do, let's start off with 10%.

• 1:12Speaker 01

  But what was the first one? He said, take your monthly income.

• 1:14Brian Preston?

  Multiply by 200.

• 1:16Speaker 01

  By two, take your monthly income, multiply by two.

• 1:20Speaker 01

  I think that rules of thumb are helpful, but you want to make sure that you have a good rule of thumb, one that actually ties, because if all you do is that simple stuff that he walked through, I don't think that's going to be quite right. I think you likely might be undersaving. And he also said, take your monthly income, multiply it times four, and that's how much you have in an emergency fund. I would argue that that may or may not be right. What I'd rather you do is take your monthly expenses and multiply those times either three or six to determine how much of emergency fund you should have. Four times your income may or may not be enough.

• 1:51Speaker 02

  Here is exactly how you can turn $50 a week into $900,000 in just five years.

• 1:56Brian Preston?

  Five years?

• 1:56Speaker 02

  Number one, open a Roth IRA through Fidelity, Schwab, or Vanguard.

• 2:00Speaker 01

  Like this.

• 2:00Speaker 02

  Takes 10 minutes, it's free, and you never have to use it if you don't want to. Number two, now invest $50 a week into an S and P 500 fund like Fidelity's FXAIX, or a growth fund like Vanguard's VUG. Number three, do this from 25 years old to 65 years old, and you'll most likely wind up with close to $1.4 million, 100% tax-free. And you contributed $104,000. Number four, but if you wait until 30 and do the same thing until 65, well, that investment is now only projected to grow to about $493,000. That's a $900,000 hit, all because you waited just five years to start investing $50 a week.

• 2:35Speaker 01

  All that math is good, and that is true. If you wait in the early years to start saving and investing, that is a very expensive, very costly decision. The earlier you can decide to do it, the better off you'll be.

• 2:45Brian Preston?

  The 88 times over concept that we're always talking about is a dollar for a 20-year-old has the potential to be 88 times over, $88 at retirement. More than likely, even if you discover us in your 30s, you're going to live to be in your 80s. So you still have dollars in your army of dollar bills that are also going to grow 88 times over. So get in there, get some, don't wait for tomorrow, start today.

• 3:10Speaker 01

  If you want to see how powerful your dollars can be, to go to moneyguy.com/resources and check out our Wealth Multiplier tool, where you can see exactly what each dollar you put to work can turn into.

• 3:20Speaker 03

  Things my parents taught me about money that schools didn't. Most financial advice only works once you already have money. This is what works if you don't. Number one is don't diversify too early. Diversification protects wealth, but it doesn't create it. If you split $500 into 10 different things, nothing will move. But if you focus $500 on one path, whether it be a niche, a business, it can compound. A lot of people stay stuck because they spread themselves out too thin. Second is buy time before you buy assets. If $100 can free up 10 hours of your time, and in those 10 hours you can earn $500, that's a 5X return. Time is the only asset that can increase your earning capacity. Disclaimer, I don't know anything about anything, so don't come for me.

• 3:56Brian Preston?

  I love the concept of focusing on buying and owning your time, but the reality is, in the beginning, you're probably going to have to take a sacrifice and work somewhere, just be disciplined, so that you can actually save that money and start buying stuff.

• 4:09Speaker 01

  I also loved in the beginning, she said, be careful not to spread your money across too many different things. And I would say, be careful not to major in the minors. Rather than going out and trying to buy 10, 15, 20 different things, a low-cost Target Retirement Index Fund, a low-cost S and P 5 Index Fund, that's going to get you the diversification that you need without having to overthink it. Keep it simple in the beginning.

• 4:30Speaker 04

  You only get in debt when you don't understand the breakdown of your finances. When you make money, split it in half. Create a bank account, call it the tax account. Put half of that there, so as you make money, you always put this money in the tax account. I never got to worry of giving the government their money, because that money's over there. I'm never going to touch that money, because it's not mine. So now off of my half, I'm gonna take another half. This half is going over here. This half is for my next real estate investment. I'm only living off a quarter of my financial gain.

• 5:01Speaker 01

  I love it. That's, that is fantastic financial advice.

• 5:03Brian Preston?

  Now, look, Kevin makes a lot of money.

• 5:08Brian Preston?

  Good news for you guys, if you're, if you're young and you're not in your peak earning years, maybe you only have to put 25% towards the government. But I would tell you, take the time, figure out, hey, look at your tax return. Next time you do your taxes, or go look at last year's taxes, and then let's actually figure out how much margin do you have in your life so that you can live on less than you make and put that money to work in your army of dollar bills.

• 5:32Speaker 01

  As a financial advisor, the number one thing I see derail small business owners, entrepreneurs, and side hustlers is that tax bill that shows up in April that they were not prepared for. The business owners, entrepreneurs, and side hustlers that understand every dollar that comes in, and you put a little bit aside, put a little bit aside, put a little bit aside, because the tax bill's going to come due, they do not have the same stress that others do. When April rolls around, make sure you are running your finances that way.

• 5:58Speaker 04

  Man, look at that, look!

• 6:01Speaker 03

  If you're short on money, just ask someone to loan you $10,000, but to only give you $5,000 of it. And that way, you owe them $5,000, and they owe you $5,000, and you can just call it even. Follow me for more financial advice.

• 6:20Brian Preston?

  That, that only works, let me tell you, that only works if it's your parents or your, your spouse.

• 6:27Speaker 01

  Your significant other.

• 6:28Brian Preston?

  Because there has to be love as the consideration for, for somebody to kind of let that, that, that bad math slide.

• 6:35Speaker 01

  But if anybody wants to get into that sort of loan business, I'm happy to put in an application right now. I'll borrow $10,000.

• 6:41Brian Preston?

  No, you wouldn't. You would not be interested in that, because I mean, as soon as I'm.

• 6:46Speaker 01

  It's a free five grand for me.

• 6:47Brian Preston?

  If I borrow money from somebody, I ache inside to pay you back. So Beau, here's the thing, getting advice from TikTok can be a little bit like shopping at a yard sale. Every once in a while, you'll find something really good, but you gotta sort through a whole lot of junk to find.

• 7:03Speaker 01

  Yeah, one thing that I've learned, both working with clients as well as my own journey, is that good financial advice is rarely one size fits all. And before you take anybody's advice, you need to understand what your own money story is.

• 7:16Brian Preston?

  That's where Monarch can help. It brings your accounts, investments, savings goals, and spending together in one place. So you can actually see your complete financial picture.

• 7:25Speaker 01

  We personally use Monarch, and I love having that visibility. It lets me dig into the numbers and see how mine and my wife's spending is trending over time, and we can make sure our money is still aligned with what our ultimate goals are.

• 7:37Brian Preston?

  And Monarch's AI weekly recap helps that too. It can flag spending changes and show you upcoming expenses, so you can stay on top of what's happening with your money in real time.

• 7:47Speaker 01

  Yeah, TikTok can give questionable money advice. We can debunk it and show you that there's a better way to do money, but your own numbers can tell you what you actually need to work on.

• 7:57Brian Preston?

  Write your own money story with Monarch. Use code MONEYGUY at monarch.com to get your first year of Monarch Core half off at just $50.

• 8:05Speaker 01

  That's 50% off your first year at monarch.com with code MONEYGUY.

• 8:09Speaker 05

  Something my mentor told me that stuck with me, even though it was years ago, is that he who works all day has no time to make money. If you are relying on like an hourly pay to like make your way, you are cooked. And I'm not trying to like roast you, obviously. Like, I want you to succeed. That's why I'm telling you this. If you ever want to be a.

• 8:31Brian Preston?

  Someday you can have a hoodie too.

• 8:33Speaker 05

  Half a million dollars. Think about your, I want you to look at your hourly wage right now. Say $500,000 and do the math. 500,000 divided by 15. You would have to work 33,000 hours. You would have to work 1,000.

• 8:53Speaker 06

  Three hundred and eighty eight full days, bro. So if you work a job that doesn't take too much of your time, you should be using literally all of your time to try to make more money.

• 9:03Brian Preston?

  About to fall asleep.

• 9:04Speaker 06

  Really want to make it, it's going to take every single second of your time.

• 9:08Brian Preston?

  Hey, can I give you a little YouTube advice?

• 9:11Speaker 01

  He was.

• 9:11Brian Preston?

  Record your content before you take your melatonin.

• 9:16Speaker 01

  He was nibbling all around the edges because I do agree with him.

• 9:21Speaker 01

  If you are working all the time and you are trying to let your wage be the thing that gets you to financial independence, it's going to be a very, very difficult thing. If however, you take the wage that you earn and you chisel off a little bit of that and you deploy your money to start working for you. Well, then not only are you working for yourself, but then your money is also working for you. And over time, your money actually begins to work harder and more than you can. So that even what you can go out there and earn in eight hours a day or 10 hours a day is less than what your money can earn. He was kind of almost sort of trying to get there. But again, I think the melatonin kicked in and he just kind of lost, he lost the flow.

• 10:01Speaker 06

  Real estate is for tax and it's for long-term wealth. It's where you go to have savings in tax and have long-term wealth, not accumulation, but preservation. So we go there to skip the IRS and we go to real estate so that long-term I have more safe assets. Stock market, we do to beat inflation. So we want 10% sort of max per year. That's why we invest in the stock market. Neither of these two things, unless you have a ton of money, are going to make you rich.

• 10:29Speaker 01

  Let's get 20 million in one of them.

• 10:31Speaker 06

  Exactly. Then you can, if you have a ton of money, these two things are great, which is why most people who are really, really wealthy own a ton of this after they've made their money.

• 10:39Speaker 01

  Yes.

• 10:40Speaker 06

  The only way that you're really going to make your money is by starting or buying businesses. And so in my opinion.

• 10:46Brian Preston?

  We just jumped the shark.

• 10:47Speaker 06

  Hundred and fifty to $500,000 because you can have an infinite return on it.

• 10:51Speaker 01

  Yeah.

• 10:52Speaker 06

  You can't make real estate, make you 50x return in one year. I mean, unless you have some crazy deal, but in buying a business, you can't.

• 10:59Brian Preston?

  In one year, that's, that's the, there's the limitation.

• 11:02Speaker 01

  I just, it's a false premise and Brian, we get to work with thousands of people in our day job as professional financial advisors. And these are engineers and accountants and school teachers and employees and W2 collectors who've recognized I can earn a wage, I can save a little bit of that for the future, and I can build substantial sums of wealth without starting a business, without being an entrepreneur, without having to go create something. It's just not true that you can't build wealth that way.

• 11:29Brian Preston?

  If you were doing something, if you have a talent that you know is world-class and people will eagerly give you their money over and over again.

• 11:41Brian Preston?

  What a feeling. Then yeah, you can pursue that, but don't skip the steps of building up your foundation, building up your cash reserves and making sure you have the bridge loan or the bridge amount of money to get you to the other side of success. Most people take the passion, don't do the preparation and then it, you know, it falls into a fiery ball of disaster and failure.

• 12:03Speaker 07

  Hi guys, my name is Brittany. I make $30,000 a month. I do not work a nine to five. I think working a nine to five is a scam.

• 12:09Brian Preston?

  Thirty thousand a month, $360,000 a year.

• 12:11Speaker 07

  Anywhere I work for myself and I'm going to teach you guys how to do it because we are not gatekeeping on this app. Making $30,000 a month is honestly not very hard. You just have to learn the systems and put the systems in place in order for you to do that.

• 12:23Brian Preston?

  Probably top 2% of the United States.

• 12:25Speaker 07

  Think it's hard because it's like a mental block in their head, but actually going to work and working nine hours a day is way harder than learning how to like monetize a skill and then make money off of that. I learned how to invest in the stock market, read stock charts, and I invested in tech and AI within the S and P 500 inside the stock market. And that's what made me a ton of money, which got me out of my nine to five. I flipped and twisted and turned my money so many times in the stock market by taking money from my job, investing it into the market. And I flipped $2,500 into well over a hundred grand just by investing in tech and AI companies. And then boom, you have all of this money and you, I did not work and not even one second for it and it's well over a hundred grand today.

• 13:10Brian Preston?

  Look, there's, um, there's a lot going on here. First thing I want you, I want to encourage anybody, go check out the, the Spiva research. This is where it shows professional money managers versus just the S and P 500. And I'm just telling you, professional money managers get smoked by being, by the index out there. So to think that she is telling you it's so easy for you just to go pick the stock market and turn $2,500 into $100,000. I don't know, maybe she got lucky and she put $2,500 in Nvidia, you know, a gazillion years ago, there, there are unicorns out there, but past performance is not indicative

• 13:51Brian Preston?

  that you'll be able to reproduce that, especially enough to go create content and tell people this is how easy it was. I would rather than stay you trying to beat the market, just be the market. We live in a wonderful world of innovation right now and you can actually own a part of it by doing index funds and simple stuff like that, that doesn't have commissions, doesn't have a high cost and creates a lot of success.

• 14:14Speaker 01

  The absolute worst thing that a new investor can do is get lucky on their first time. The worst thing you can do is make money on a bad idea, a risky endeavor, a kooky thought and make money. And it creates this overconfidence that makes you think you have something figured out and you've done something that's repeatable. If you bought a bunch of AI stocks and tech stocks and you had a bunch of success on that in any given quarter, month, year, I'd like to see you do it again next year and then the next year, and then the next year. Cause people just aren't able to do that. That's not the way the financial markets work. And so her saying, I figured out how to unlock $30,000 a month in income.

• 14:56Speaker 01

  I just don't think, I'd love to know what she did the first quarter of this year. I'd love to know how she was doing in 2022. I'd love to know what she did in the fourth quarter of 2018 because the markets don't always work that way. That's not how investing works. That's gambling. It sounds like she got lucky on her first few bets.

• 15:14Brian Preston?

  Look, you probably have caught on that every one of these videos that we've talked about today, they have a kernel of something that nudges up against the truth. But if you're actually trying to build a life to where your money works harder than you do, and you actually want to have success and you're, you're harnessing the power of compounding growth, you need to be careful who you let in your head. And that's why I would tell you that we know for a fact that there is a better way to do money. We've been creating content, educating people for 20 plus years. So I'd encourage you to go to moneyguy.com/resources. We literally load you up with free advice on how to get in there. We have calculators, we have downloads, we have lots of resources for you to become

• 15:56Brian Preston?

  better with this awesome tool of money that if you learn how to harness it, literally can create independence and you own your time that much sooner. I'm your host, Brian, joined by Mr. Bo, Money Guy team, out.