There are myths about money that we should not listen to because they will ensure you stay broke for long. The moment we stopped believing these six myths about money will be the time when the road to financial freedom will start shaping up.
Debt can build wealth – Doesn’t it seem dumb that to build credit you first have to go into debt? Debt can be a tool if you’re a millionaire or a large billion-dollar corporation because the interest on the debt is tax-deductible. The wealthy are always looking for deductions. For the average person, however, debt can crush us. We start off with the intention paying off our balances and paying on loans, but life happens. Unplanned life situations affect your ability to pay the debt back, and the interest makes that debt continue to grow. Look at what’s happening with student loans. It’s estimated that it will take the average student 25 years to pay off their loans. Debt is not the path to wealth. Billionaire investor Warren Buffet said, “Those who understand interest earn it, those who don’t, pay it.”
I have time on my side – When you’re young, you think you can make mistakes and have plenty of time to make them up–especially financially. You think you can make more money or overcome poor choices. The problem is that none of us knows how long we’ll live. Time-related to money works in reverse. The sooner you start saving and investing; the better compound interest can work and grow what you have. The time to start handling your finances properly is right now.
Investing is for rich people – This is one of the most commonly spouted myths and one of the most destructive. If you wait until you’re “rich” to invest, you could be waiting forever. The reality is that with today’s access to information and technology, anyone can figure out how to invest. You can research anything related to investing and feel confident you know at least the basics.
I can’t afford to save – If you looked carefully at what you spend money on, you would find a few dollars that you can save. If you cut out things such as cable or fast food, you can save a little. A little bit over time adds up, and I’m not saying you have to give that stuff up forever. You’re making a short term sacrifice for a long term gain.
Money isn’t important – Money isn’t the only thing in life and not the most important, but it IS important to almost everything you want to do. You will need money to chase dreams, you will need money to survive, and you will need enough money to not let it stress you out. Money is one of the main reasons for life stress. Don’t chase it, but make enough to give you some breathing room and freedom.
It’s too late for me – It’s never too late to get control of your money. Take some time and think about your goals. Figure out the right investments and set yourself up towards making your money grow.