'Making $10k a month is not that hard': How TikTok influencers are luring followers with deceptive promises of side-hustle riches

‘Making $10k a month is not that hard’: How TikTok influencers are luring followers with deceptive promises of side-hustle riches

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Do you want to make money while you sleep? If you believe the swarms of promoters on TikTok or YouTube, it is easy to make boatloads of passive income through a side hustle. Scrolling social-media feeds, it seems like everyone is making money by renting out property, day-trading, or dropshipping. You’ll start making hundreds or even thousands of dollars a week by taking just a few simple steps, they claim. They rope in followers with screenshots showing sales growing dramatically and the message: “If I did it, so can you!”

With the cost of living soaring, making thousands of dollars in your sleep sounds like a golden ticket to anyone looking for a leg up. Passive income — residual earnings that require a bit of upfront investment but little or no continued work — promises to make this a reality.

And some of the dollar amounts passive-income influencers are touting in their posts are eye-popping. One creator claimed to be making enough money after a couple of months to quit his job and sell digital products on Etsy full time. Another woman claimed to make $1,000 a week with the same strategy. One video on side hustles, with over 15 million views , claimed “making $10,000+ a month is not that hard.”

These financial influencers are drawing in a lot of young people: A recent survey found that 34% of Gen Z consumers obtain financial advice from TikTok and 33% from YouTube, while only 24% of this age group seek advice from financial advisors. The hashtag #passiveincome has 2.3 billion views on TikTok, while #sidehustle has 11.4 billion. But there is a dark side to these side-hustle hucksters: When they flaunt their passive-income-funded lifestyles, they fail to give viewers a full picture of the risks involved in the business, spreading dubious financial advice to millions of people just so they can sell their next e-book or online course. How to get rich quick

The internet can make things look easier than they are, and many of the creators who brag about the “simple steps” to financial freedom are failing to explain the real challenges of the money-making tactics they promote.

One popular way to accumulate passive income among influencers is to build a mini empire of short-term rental properties that can then be leveraged for profit. But some of these entrepreneurs don’t even own the property they are renting out. In what’s known as Airbnb arbitrage , hosts rent property from a landlord, then turn around and rent the property out to guests on Airbnb. This tactic is cheaper than buying property, while supposedly allowing you to make a significant profit each month. The trouble is influencers are quick to gloss over the challenges of the market, the difficulty in finding a rental property that allows this, and the changing regulatory landscape that could leave you stuck paying rent on a property you can no longer use — not to mention the well-documented negative effects of a proliferation of Airbnbs on the strapped housing market.

Even when the stakes are somewhat lower, passive-income influencers fail to give viewers the full picture. Take dropshipping, another popular money-making scheme among influencers. A hopeful entrepreneur lists a bunch of products — from phone accessories to massagers — on an e-commerce platform like eBay, Depop, or a custom Shopify website. But the dropshippers never actually see or handle the products they sell; instead, they order the product from a wholesale company or manufacturer that ships the products directly to the customer. The dropshipper makes money by pocketing the difference between the wholesale costs of the product and what the buyer pays. They only have to choose the range of products, create a website, and market the product to buyers.

“There was a huge flood to the dropshipping market during the COVID-19 lockdowns,” Daniel Frampton, a financial advisor at Acumen Financial Partnership, told me. “Online order volume was at an all-time high,” Frampton said, and influencers started touting dropshipping “at a buoyant time.” But Frampton explained that most dropshippers quit when the reality of the business hits.

“They realize that the best products have saturated the market, shipments from China can take upwards of 12 weeks, and advertising can cost thousands, with no guarantee of a return on investment,” he said.

Financial influencers are also quick to gloss over the costs that go into maintaining a dropshipping business. Most dropshippers use Shopify, whose basic plan […]

source ‘Making $10k a month is not that hard’: How TikTok influencers are luring followers with deceptive promises of side-hustle riches

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