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FinTok: how TikTok is helping young people use cash wisely | Consumer affairs

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Sea shanties and viral dance trends have helped make TikTok a hit since the start of the pandemic. In 2020, the social media app, which allows users to create and share one or more 60-second films soundtracked with music clips, surpassed 2bn global downloads.

In the financial world, TikTok has a reputation for promoting volatile cryptocurrencies and activist investing – interest in Dogecoin and GameStop has been fuelled by the platform. But, beyond the jokes and rocket emojis being shared by some users, there is a wealth of practical personal finance videos that are teaching young people how to use their money better.

This financial TikTok space, dubbed FinTok, is global and growing. Content tagged with the hashtag #stocktok has been seen by users 1.4bn times, while the slightly more mundane #PersonalFinance has garnered more than 4.4bn views. Tagged videos cover everything from budgeting to Isas, from taxes to debt.

What is remarkable about FinTok is not the content of these videos but their reach: young people who might have otherwise been uninterested in personal finance are engaging with it. People are thinking about their money, and how to make it work for them, earlier and with more care. Some are even taking their first steps into investing inspired by short videos they have seen on social media. For many generation Z and millennial users, TikTok is their first and only source of education on money matters.

Ava Montgomery, 17, came across personal finance when her favourite creators on the site shifted into FinTok. “A lot of their videos are advice-based, and a lot of that tends to be around finance,” she says. She is still in the sixth form, and, by her own admission, not yet at the stage of life to act on it, but she has already learned about credit and mortgages while scrolling on her phone. “I have taken into account how much I’m going to need to think about that stuff when I’m older,” she says.

Figures shared with Guardian Money by the investment firm Hargreaves Lansdown show that 46% of 18- to 34-year-olds have become more interested in investing over the past six months, and one in five attributed this newfound enthusiasm to TikTok.

Susannah Streeter, a senior investment and markets analyst at Hargreaves Lansdown, says: “Social media and trading apps really have democratised the whole investment process.”

Tips and advice

TikTok recommends videos to its users based on how they have previously watched its content, creating a personalised feed called the For You page (FYP). Unlike other recommendation systems, the FYP deliberately includes a range of diverse and random videos, even if they appear irrelevant to the user’s interests, in an algorithmic effort to avoid “filter bubbles”. As a result, users can come across FinTok videos despite having never shown interest in personal finance before.

Even if you use the platform purely for entertainment, this random feed means you can end up inadvertently engaging with educational content. Laura Pomfret, 33, one of the founders of the personal finance brand Financielle, says this is what she likes about TikTok.

Laura Pomfret
Laura Pomfret and her sister started Financielle on Instagram and have since expanded to TikTok. Photograph: Laura Pomfret

Laura and her sister Holly Holland, 31, started Financielle on Instagram and have since expanded on to TikTok, amassing more than 22,000 followers. Their content ranges from simple explainers to putting a financial spin on the latest TikTok trends and songs.

One recent video explores the question should I rent or should I buy? and features Laura in a garden, explaining rising house prices and market appreciation. Her friendly Mancunian accent and simple language make the daunting issue clear and easy to understand. She ends the 60-second video saying that there are no rules, encouraging viewers to decide for themselves and “bear in mind these factors when considering renting versus buying”.

A Financielle series, called Definition of the Day, breaks down financial jargon. One video explains greenwashing – a term regularly used on social media and often misunderstood. In less than a minute, Financielle’s intern Lucy defines the term: “Basically, it’s deceiving consumers into believing that a company’s products are environmentally friendly.”

The Financielle sisters’ aim is to make content that can act as “someone’s financial best friend”, Laura says: “This isn’t financial advice; this is the bit before it.” They describe their content as “like the couch to 5K” app, which was developed by the NHS to encourage people to take up running. It is about “breaking things down” and creating a plan, Laura says.

Laura and Holly are looking to expand their demographic, with the aim of reaching generation Z “before they make some bad life choices at ages 21 to 25, like we all probably did”. They anticipate: “TikTok’s going to be a massive driver for that.”

A younger creator, @pokubanks, also sees his platform as a space for education. David Poku, 20, started making personal finance videos on TikTok in January 2020, and boasts more than 330,000 followers. His interest in money started “because of the absence of financial literacy in school”, he says. When he was in the sixth form, he realised that he had never learned about taxes, investing or debt, so he taught himself and enrolled in the University of Nottingham to study finance, accounting and management. “I make some of my content from my lectures, literally,” he says.

David Poku
Many of David Poku’s videos try to educate viewers about how to navigate the onslaught of information. Photograph: David Poku

Poku’s typical video takes a conversational, question-and-answer style. In the wake of May’s cryptocurrency crash, Poku published a video in which he acted as a “naive investor” in a black tracksuit and an “experienced investor” in a plain fitted T-shirt. He explored the question of whether people who had bought crypto should sell their coins at a low price or ride the wave of speculation. The more experienced character told the other: “Only invest what you can afford to lose.” Poku says he is summarising the wisdom of established businessmen such as Warren Buffett, “and adding my twist to it so that people can understand the message”.

Poku is wary of the risks of unregulated online advice, so many of his videos seek to educate viewers about how to navigate the onslaught of information. A recent video marked with the hashtag #FactCheckYourFeed was part of a campaign by the site and the charity Citizens Advice.

Poku’s video gives three tips to avoid scams online. He tells viewers it is a “bad sign” if you are asked to pay for something quickly or in an unusual way, that they should avoid giving away personal bank details or passwords, and should not rush into any decisions.

Other films in the campaign have been made by @thatmortgageadvisor, an independent UK mortgage broker, and @tejlalvani, a chief executive and dtar of BBC Two’s Dragons’ Den. The videos in the #FactCheckYourFeed campaign will cover financial terminology, research methods and how to make informed decisions.

When 27-year-old Andra Maier, who lives in London, was furloughed from her job in fashion PR last year, she turned to TikTok in search of budgeting techniques. “Now my For You page is mostly financial advice,” she says.

Andra Maier
Andra Maier turned to TikTok for advice on budgeting when she was furloughed from her job in fashion PR. Photograph: Alina Raducea

Maier remembers specific helpful videos rather than individual influencers. She recalls that one creator explained how to use a Google Form for budgeting, which made Maier ask: “Why did I never do this?” She has created budgets in this way ever since and it has given her an increased awareness about what she is spending money on. She says: “I have a Google Form, I input every single thing I spend, and then it goes into its category.”

Based on Maier’s interests, TikTok showed her more finance videos, which encouraged her to shift from planning to investing. Because she saw “repetitive information” on TikTok, she felt confident enough to make her first trades.

She went to Hargreaves Lansdown and invested in a portfolio of low-risk stocks and funds. Then she downloaded several new investing apps popular on TikTok, such as Plum, through which she made higher-risk trades with smaller chunks of money. She sees TikTok as the first point of information, explaining new concepts such as “compound interest” in simple terms, and showing her what to research in greater depth elsewhere.

What to bear in mind about the videos

However, these simple and snappy FinTok videos are not universally popular. At 37, Matthew Flower from Saffron Walden is older than the typical TikTok user. He downloaded the app “to keep abreast of what my children are actually doing online”, then stumbled across the app’s many personal finance videos. He’s not a fan. “Most of them are awful,” he says.

One problem for UK users is that the majority of FinTok content is American. “Obviously, there’s a difference in our financial systems,” Flower says. But the bigger problem, he says, is that people might take influencers’ “statements as fact, without doing their due diligence”.

Nigel Frith, an FCA-accredited analyst from the website AskTrader, says the emergence of online platforms and the opportunity to act immediately has “brought the Wall Street or the London Stock Exchange experience to consumers”.

But he is also concerned about the dangers that come with such a low barrier to entry. All you need to start posting videos to TikTok is the app. The ability to go viral on the FYP, easier than on other social media according to creators, means information might be viewed hundreds or thousands of times without the need to establish the trust of committed followers.

Nigel Frith
Nigel Frith says online platforms and the opportunity to act immediately has ‘brought the Wall Street or the London Stock Exchange experience to consumers’. Photograph: TikTok

The dangers of unregulated influencers are starker when it comes to personal finance than in other genres because there is a risk that they could engage in market manipulation by giving tips that benefit their own investments.

Hargreaves Lansdown’s Streeter says it is difficult to know “the motives of these people” on social media. And she says if something is wrong “it’s not easy to censure an influencer at the moment”.

As Guardian Money went to press, it emerged that TikTok had banned branded content promoting financial services and products, including everything from cryptocurrency to debit cards. The extent of the ban is not yet clear, but it does suggest TikTok is taking action to reduce the potentially harmful content on the site.

Myron Jobson, personal finance campaigner at website Interactive Investor, says the change “will hopefully mark the end of dubious and outright misleading adverts of high-risk investments as well as highly volatile cryptocurrency on the platform. The hope is that TikTok’s systems are robust enough to detect and weed out content that falls foul of its revised policy.”

A TikTok spokesperson says: “Keeping our community safe is a top priority,” and that this is why it launched the #FactCheckYourFeed campaign. It posts a public service announcement on financial advice hashtags, reminding users that investments involve risks. The spokesperson says: “Our guidelines make clear that we do not permit content that brings about financial or personal harm – and we have specific rules banning pyramid, Ponzi or similar schemes.”

Even if the rules tighten in the future, FinTok is going nowhere. The viewers and the influencers see TikTok as filling a vital knowledge gap for the UK’s youth, and many creators such as @financielle and @pokubanks actively support some form of regulation.

For now, in the wild west of personal finance videos, the advice is simple: do your own research, don’t make a financial decision just because it is trending, and keep your options open.

Five useful TikToks

@financielle: It’s important you build your own retirement pot

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Holly from Financielle shares tips for building up retirement savings early and independently

@pokubanks: Student loan is more of a tax, not a debt

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A UK student loan explainer – how it is repaid and when it is written off

@herfirst100k: Five questions to ask at the end of a job interview

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The popular US money expert Tori Dunlap suggests helpful questions to ask at the end of a job interview, including queries around salary and company culture.

@lifewithcaits: Budgeting tips for beginners

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A colourful and easy-to-follow video, outlining basic budgeting strategies.

@thatmortgageadvisor: What is the new government 5% deposit scheme?

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Emmy Dent, a UK independent mortgage broker, explains what the 5% deposit scheme is and who is eligible.

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This start-up is offering stressed techies the chance to switch off at its cabins

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Slow Cabins is coming to Ireland and aiming to tap into the trend for low-impact, sustainable, digital-free tourism.

A hospitality rental company targeting techies who want to digitally detox is preparing to welcome its first guests in Ireland.

Founded in 2017, Slow Cabins seeks to offer people the opportunity to spend time away from their tech lives in relaxed, remote and eco-friendly surroundings.

It is currently taking bookings in Ireland and will open its first cabins here from 1 August. As well as Ireland, the start-up has operations in Belgium and the Netherlands.

All of its cabin locations are secret to purposely encourage guests to switch off and detox from their day-to-day stresses. Guests book their cabins without knowing the exact location, but all cabins are located within a two-and-a-half hour drive from major cities.

Within about two weeks of the trip, guests receive details with the exact location of their cabin. Even then, they may have to park their cars and hike to get to their accommodation.

The idea behind Slow Cabins comes from low-impact and sustainable tourism. Cabins are equipped with queen-sized beds, log burners, solar panels, dry toilets, fire pits, grills and large windows. Each cabin is powered naturally by sunlight and water.

“Recent European studies show that our resilience improves and stress levels decrease by up to 70pc after a stay in nature,” said Slow Cabins Ireland director Matthew Parkinson.

“Getting away from it all brings peace, energy and a sense of perspective. And that’s where Slow Cabins have an interesting role to play in a fast ‘always-on’ society. Profit is not our only goal, but rather a means to create more positive social and environmental impact,” he added.

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Best podcasts of the week: Sam Smith charts 40 years of progress on HIV and Aids | Podcasts

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Picks of the week

A Positive Life: HIV from Terrence Higgins to Today
BBC Sounds, episodes weekly from 1 Jul
Sam Smith presents this series about the legacy of Terrence Higgins, one of the first people to die of Aids in the UK. The opening episodes tell the story of Terry, “the swashbuckler of life”, with London friends sharing their grief and confusion at his death. There’s optimism, too, as Smith hears from those who fought to make treatment available, and those living with HIV 40 years on. Hannah Verdier

The Last Bohemians
Widely available from 6 Jul

LA’s unsung heroines of rock’n’roll get their moment in the spotlight in the new series of Kate Hutchinson’s fierce female-applauding podcast. As always, the more offbeat characters are the best, starting with Angelyne, the “billboard queen” and hustler. Punk widow Linda Ramone and surrealist Penny Slinger are also coming up. HV

Dear Poetry
Audible, episodes weekly

Luisa Beck believes in the healing power of poetry and she’s spreading the love in a new podcast, with writers suggesting soothing texts to solve people’s problems. At one memorable point, author Luther Hughes gives a 21-year-old looking for love a poem with a powerful message: “You are that bitch – it’s gonna happen when it happens”. HV

Project Unabom
Apple Podcasts, episodes weekly

Notorious serial bomber Ted Kaczynski was the subject of an 18-year manhunt, and this podcast looks at what happened in that time. Host Eric Benson recalls Kacynski’s threats to stage more attacks if the Washington Post didn’t publish his manifesto, and shares interviews with a Dungeons and Dragons club that became the FBI’s initial suspects. HV

Algorithms
Audible, all episodes available

Comic Sadie Clark creates a podcast from her Edinburgh show – once called a “bisexual Bridget Jones for the online generation”. It opens with main character Brooke’s mum (Alison Steadman) spying explicit photos of her online. One breakup later and she’s using the dating app she writes the algorithm for, with pleasingly clumsy results. HV

There’s a podcast for that

Kristin Davis, Sarah Jessica Parker, Cynthia Nixon and Kim Cattrall filming Sex and the City: The Movie in 2007.
Kristin Davis, Sarah Jessica Parker, Cynthia Nixon and Kim Cattrall filming Sex and the City: The Movie in 2007. Photograph: James Devaney/WireImage

This week, Hannah Verdier chooses five of the best TV companion podcasts, from Dolly Alderton’s Sex and the City show to a Scrubs rewatch with stars Zach Braff and Donald Faison.

Obsessed With …
The BBC’s companion series to talked-about shows including Killing Eve, Peaky Blinders and Normal People is always high quality. Line of Duty brought out the big guns with Craig Parkinson, Vicky McClure and Martin Compston all giving their theories ahead of the big reveal, while Sophie Duker secured Michaela Coel for the finale of I May Destroy You. But watchalongs don’t always need high drama, as Evanna Lynch and Riyadh Khalaf proved as they bravely tackled the slowly shifting quadrangle of Conversations with Friends.

Sentimental and the City
If you initially had problems with And Just Like That’s faux-wokery but then grew to love it like a Botoxed old friend, Caroline O’Donoghue and Dolly Alderton hear you. These are women who know their stuff, with O’Donaghue uttering the words: “I don’t like the look of Big on that Peloton and I’m worried” after seeing just the trailer. Their Sentimental Garbage miniseries on the Sex and the City sequel is a place where debate about the divisive depiction of ageing, sexuality and diversity sits perfectly with lighter moments, like giggling over Charlotte’s robot lines.

Squirrel Friends: The Official RuPaul’s Drag Race Podcast
There’s not exactly a shortage of RuPaul-related pods out there, but this one comes from inside the Drag Race community, with hosts Loni Love and Alec Mapa who’ve been there and done the guest judging. Cackling and spilling of the hottest tea comes as standard as they recap All Stars season seven, dissecting all the entrance looks, performances and personalities. Their love for RuPaul never waivers, as they dish out compliments, one-liners and behind-the-scenes gossip after every episode of the hit show.

The Stranger Things Podcast
All-American father-daughter duo Addi Darnell and Darrell Darnell gently mock each other while going into the intricacies of the disturbingly lovable drama in podcast episodes that are even longer than the latest instalments. Is “whet your appetite” a thing? What’s the difference between hellfire and heckfire? And why is Eddie still languishing in high school when his teachers must be so desperate to see the back of him? No fan question is left unanswered in the deepest dive out there.

Fake Doctors, Real Friends with Zach and Donald
With nine seasons of the US medical comedy-drama Scrubs settling into its new home on Disney+, it’s the ideal time to rewatch your favourite episodes – along with its two main stars . JD and Turk (Zach Braff and Donald Faison) are now six seasons into their recaps, screeching with laughter at on-set moments and fondly remembering the times they broke down and cried. Their friendship and unmistakable chemistry is as tight off-screen as on, but occasionally they stop nattering for long enough to welcome guests such as Heather Locklear and Seth Green.

Why not try …

  • The stranger than fiction story of “Ohio’s bear king”, complete with music from Grandaddy’s Jason Lytle in Beast Master.

  • A special dose of summer spookiness, with a trio of new episodes from Danny Robins’s Uncanny.

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W3C overrules Google, Mozilla’s objections to identifiers • The Register

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The World Wide Web Consortium (W3C) has rejected Google’s and Mozilla’s objections to the Decentralized Identifiers (DID) proposal, clearing the way for the DID specification to be published a W3C Recommendation next month.

The two tech companies worry that the open-ended nature of the spec will promote chaos through a namespace land rush that encourages a proliferation of non-interoperable method specifications. They also have concerns about the ethics of relying on proof-of-work blockchains to handle DIDs.

The DID specification describes a way to deploy a globally unique identifier without a centralized authority (eg, Apple for Sign in with Apple) as a verifying entity.

“They are designed to enable individuals and organizations to generate their own identifiers using systems they trust,” the specification explains. “These new identifiers enable entities to prove control over them by authenticating using cryptographic proofs such as digital signatures.”

The goal for DIDs is to have: no central issuing agency; an identifier that persists independent of any specific organization; the ability to cryptographically prove control of an identifier; and the ability to fetch metadata about the identifier.

These identifiers can refer to people, organizations, documents, or other data.

DIDs conform to the URI schema: did:example:123456789abcdefghi. Here “did” represents the scheme, “example” represents the DID method, and “123456789abcdefghi” represents the DID method-specific identifier.

“DID methods are the mechanism by which a particular type of DID and its associated DID document are created, resolved, updated, and deactivated,” the documentation explains.

This would be expressed in a DID document, which is just a JSON Object that contains other key-value data describing things like how to verify the DID controller (the entity able to change the DID document, typically through control of cryptographic keys) in order to have a trusted, pseudonymous interaction.

What Google and Mozilla object to is that the DID method is left undefined, so there’s no way to evaluate how DIDs will function nor determine how interoperation will be handled.

“DID-core is only useful with the use of ‘DID methods’, which need their own specifications,” Google argued. “… It’s impossible to review the impact of the core DID specification on the web without concurrently reviewing the methods it’s going to be used with.”

A DID method specification represents a novel URI scheme, like the http scheme [RFC7230] but each being different. For example, there’s the trx DID method specification, the web DID method specification, and the meme DID method specification.

These get documented somewhere, such as GitHub, and recorded in a verifiable data registry, which in case you haven’t guessed by now is likely to be a blockchain – a distributed, decentralized public ledger.

However, there is a point of centralization: the W3C DID Working Group, which has been assigned to handle dispute resolution over DID method specs that violate any of the eight registration process policies.

Mozilla argues the specification is fundamentally broken and should not be advanced to a W3C Recommendation.

“The DID architectural approach appears to encourage divergence rather than convergence & interoperability,” wrote Tantek Çelik, web standards lead at Mozilla, in a mailing list post last year. “The presence of 50+ entries in the registry, without any actual interoperability, seems to imply that there are greater incentives to introduce a new method, than to attempt to interoperate with any one of a number of growing existing methods.”

Mozilla significantly undercounted. There are currently 135 entities listed by the W3C’s DID Working Group, up from 105 in June 2021 and 86 in February 2021 as the spec was being developed. If significant interest develops in creating DID methods, the W3C – which this week said it is pursuing public-interest non-profit status – may find itself unprepared to oversee things.

Google and Mozilla also raised other objections during debates about the spec last year. As recounted in a mailing list discussion by Manu Sporny, co-founder and CEO of Digital Bazaar, Google representatives felt the spec needed to address DID methods that violate ethical or privacy norms by, for example, allowing pervasive tracking.

Both companies also objected to the environmental harm of blockchains.

“We (W3C) can no longer take a wait-and-see or neutral position on technologies with egregious energy use,” Çelik said. “We must instead firmly oppose such proof-of-work technologies including to the best of our ability blocking them from being incorporated or enabled (even optionally) by any specifications we develop.”

Despite these concerns, as well as resistance from Apple and Microsoft, the W3C overruled the objections in a published decision, a requirement for advancing the spec’s status. ®

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