In this article, I want to share something that affects everyone on daily basis. You, me, and anybody. And that’s Money! Yes, money, money, more money!
Throughout my life, I’ve been hearing a lot about it. “Money is everything but again it’s nothing”. Sometimes it’s hard to decode. There are a lot of misconceptions and myths that can lead to bad financial decisions.
So, at some point, we all make mistakes when it comes to finances. That’s exactly why I’m here today, to provide you insights on how to unlearn those money myths and misconceptions and set you on a path to financial success.
Whether you’re just starting out in your career or a pro, stick around the article because this is going to add value to everyone unless you’re a billionaire, then you probably skip checking this article and go back to counting your money in your vault. I’m just kidding!
Let’s dive in and start busting some money myths.
Top 7 Money Myths to Unlearn if you want to get Rich
Money Myth #1: You need to be a Financial Expert
Oh, please. You needn’t be a financial expert to make smart financial decisions. Having a degree might help to make smart financial decisions but a basic understanding of personal finance can also help take smart financial decisions.
The deal is to learn more about financial things from any of your trusted sources such as Books, Blogs, YouTube, Podcasts, etc. Then set goals and stick to them.
Money Myth #2: You need to have High Income
Oh boy! Where do I even start with this one? Let me tell you, having high pay doesn’t guarantee you any financial success until you know how to control or manage your money. In fact, I’ve seen a lot of people earning six-figure salaries who are drowning in debt.
Besides, there are people who don’t make much yet with the right financial tactics they save plenty of money for their future.
The deal is all about how you manage or control the money you have but it’s not dependent on whether you’re earning a fortune. If you can educate yourself on budgeting, saving, and investing wisely, that can help you greatly in taking smart financial decisions.
Money Myth #3: Having Money in Savings Account is a Safe Place
Well, this one’s a doozy. Don’t get me wrong, banks are certainly great for keeping your money safe and accessible, but are they really the safest place to put all your money in? No!
That’s because many banks only offer a fraction of a percent of your savings which isn’t enough to keep up with inflation. So, if you plan to have all your money in a checking/savings account then you’ll eventually end up losing money over time.
The deal is to diversify your investments and consider options like bonds investment and money market funds. Just remember, there’s always some level of risk involved when it comes to investing, so make sure you understand the risks before you invest.
Money Myth #4: Renting Out is Always Bad
I’ve heard about this a million times. It’s a big misconception to think renting out is just like throwing away your money down the drain. In fact, it could be a smart choice. I’ll tell you how.
Firstly, owning a home might not be in the best financial interests of some people. Secondly, when you rent, you don’t have to worry about maintenance costs, property taxes, and other expenses that come with homeownership. Of course, if you’re looking to build wealth through real estate, then buying a rental property is definitely a good investment. But if you want to buy a home as a liability then renting out could be the best option.
The deal is before renting out or buying a house, think about your financial goals and then take a decision that is best for you in the long run.
Money Myth #5: I don’t need to Educate myself about Taxes
Ha! there’s one thing I’ve learned over the years, and it’s that taxes are a fact of life. Trust me, taxes can have a major impact on your finances. It doesn’t matter what you do, you’ve to pay the taxes even when you’re just starting out in your career.
It’s a thing you can’t ignore especially when you’re at the initial stages of your career as you cannot afford a person to help you with taxes.
The deal is to make an effort to educate yourself on the basics of tax law, how to maximize your deductions, and how to legally reduce your tax bill. Yes, you can have some tax planning strategies you can implement like investing in real estate as they’ve tax benefits. It’s all about being proactive to discover more loopholes to save yourself some money in the process. So, don’t be tax-ignorant thinking of the misconception “taxes are difficult to understand”. Educate yourself on taxes and take control of your finances.
Money Myth #6: Saving Without a Goal
Trust me! Saving without a goal is pointless. Well, let me put it this way, saving without a goal is trying to hit a bullseye without aiming. It’s just not going to happen. In this case, technically you can save without a goal but it isn’t seamless. It gets harder than you think.
The deal is, when it comes to finances, having a clear goal in mind will let you make smart decisions and keep you motivated. Whether it’s saving for a down payment on a house or paying off debt, have a specific target to work towards such as figuring out numbers you want to reach. For instance, if you aim to save $1M by the age of 30, break it down into smaller goals of saving $100,000 and then eventually reach your ultimate goal. This way you could stay focused and motivated. Just imagine, the sense of accomplishment when you reach your target. That’s truly priceless, right?
So, don’t fall for the myth “You can Save without a Goal”. Set the goals you want to achieve and start saving today!
Money Myth #7: “All Debt is Evil”
I’m gonna be real with you here, debt is not always bad. Sure, debt can be considered bad only when it’s difficult to repay or if it doesn’t offer any long-term benefits.
In fact, there’s good debt and there’s bad debt. Good debt is what helps you grow your wealth such as a mortgage loan or a student loan. With such loans, you’ll be benefited as it allows you to invest in assets that have the potential to appreciate over time or invest in yourself to educate and grow yourself and also build skills. On the other hand, bad debt is which doesn’t provide any financial benefit like credit card debts or personal loans.
The deal is to understand the difference and make smart financial decisions. So, don’t really fall for the myth that all debt is bad. And remember, just make informed decisions and use debt to your advantage.
Up to the very end!
In conclusion, these are just a few of the most common money myths but there are more money myths out there that can lead to poor financial decisions. Just recognize and unlearn such myths to make smart choices.
Always remember, it’s not about how much money you earn each month or annually, it’s all about how you manage or control it to be financially sound.