We have believed in some things for so long that we haven’t realized they’re just myths. This is because we are influenced by our seniors, parents or friends. Some of these beliefs are passed on from generation to generation!
Do you know money myths actually prevent you from becoming financially successful?
Below are some common financial myths that are bust worthy.
1. Investing are only for rich people
“How will I invest if I don’t have a huge amount of money?”
“Investing is too risky and I can’t afford to lose my money!”
“Stock Market is so hard to understand and complicated.”
These are the biggest misconceptions about investing. We don’t really need a large amount to invest. We can always start with small amounts, add up to our funds periodically until our money accumulate.
Yes, investment is a risk. But its risks can be managed with proper knowledge and strategy. It isn’t only for the rich, but there are rich people because they see great opportunities with investing.
Invest to maximize your money’s income potential.
There are different financial instruments available in the market.
Stock Market seems technical and complicated at first. It seems that this industry is for institutions and professional people only. But there are actually low ballers in the stock market too! You can be a stock investor too. Don’t be intimidated and give yourself a chance to learn. Here are stock market beginner-friendly tips for you.
2. It is better to use cash than credit cards
Most of us know someone who is buried in debt because of excessive use of credit cards. Some people say if you don’t want temptation, you should avoid getting one. But using credit cards can actually be more beneficial than using cash.
Credit cards keep you a record of your spending thus allowing you to review your expenses anytime.
Credit cards have security features that protect you from fraudulent purchases. If you get hacked or if your card is stolen, you can easily report and cancel it.
Credit cards offer other perks, discounts, and cash backs, too that could help you save money.
It’s also more convenient and safer not to bring as much cash on your pockets.
Lastly, using credit cards help you increase your credit score provided that you’ve been paying your bills on time.
3. You don’t need a life insurance when you’re young
“It is too early to get an insurance”.
When you’re young and at the peak of your health, getting an insurance may not even be in the top 10 of your priorities. But it’s wise to get an insurance as early as in your 20’s because it’s cheaper. And the value, when bundled with investment, increases over time.
When it’s time to establish a family of your own, you will appreciate the importance of having an insurance for family’s security. It is harder to get one when you are already loaded with obligations and responsibilities.
4. You are either very young or already old to start a retirement fund
“You only live once”.
People, especially the younger generation, tend to enjoy life to the fullest without thinking about the future. Start saving while you’re young to take advantage of longer compounded interest. Don’t just rely on your retirement fund. And who knows? Diligent saving could even allow you to retire early.
If you think you’re too young or too old, if this is your mindset, then you’ll never really be able to save.
Start now. Before you know it, you’ve already accumulated a considerable sum by the time you need it.
5. Buying during a sale is a good deal
Do you often fall victim to sales? Do you get too excited to buy items you don’t really need just because they are on sale?
Discounts are not as good as they look. Always learn to compare prices and think twice before buying sale items. Check the quality too.
6. Avoid borrowing money or getting a loan at all costs
There are situations when it’s ok not to be afraid of loans. Sometimes, you could be giving up more opportunities if you keep yourself from getting one.
When is it alright to borrow?
Do you want to start or expand your business? If a business loan will help you get established, improve, and give you more profits, then get one.
Sometimes, it’s okay to avail for a personal loan if it will take away your anxieties, save up relationships, peace of mind and for your aspirations in the future. Just make sure that you are responsible enough to settle all your obligations. That’s the key.
Do you believe in any of the above?
How many are you guilty of?
Just because we grew up with these beliefs doesn’t mean they’re true. Before listening to what others are saying, be curious, research, and study them first. This way, you entrust your financial life to your owns hands, not on century-old myths that might be sabotaging your financial freedom.