Money remains a sensitive topic that many people avoid discussing. One of the recent studies shows that over 60% of Americans don’t regularly talk about money. This is particularly true for older generations, including millennials, Gen X, and baby boomers. The absence of these conversations has given rise to several common misconceptions or “lies” that people share about money.
1. Money is the root of all evil
This lie suggests money itself is inherently evil, which is not true. In reality, money is a tool and the love of money or the misuse of it that can lead to unethical behavior.
2. My bank account’s the best place to keep my money
This misconception assumes that keeping all your money in a bank account is the safest and most profitable option. In truth, you will lose some percentage of that money annually due to inflation.
3. Investing is too risky and complicated
This lie discourages people from exploring investment opportunities because they believe it’s too complex or hazardous. With proper research and guidance, investing can be a valuable wealth-building strategy.
4. Credit scores are not necessary
This misconception downplays the significance of maintaining a good credit score. However, your credit score is significant as it can affect your ability to secure loans, mortgages, or job opportunities.
5. I deserve this even if I can’t really afford it (yet)
This lie rationalizes overspending by claiming you deserve something, even if it’s financially impractical. This habit can lead to debt and financial instability.
6. I’ll save more in the future
This lie delays saving for the future, assuming you’ll have more opportunities later. However, waiting can hinder your financial security, especially in emergencies or retirement.
7. Wanting more will get you nowhere
This lie discourages ambition and the pursuit of financial goals. It’s essential to have aspirations and work towards improving your financial situation.
8. Saving can build wealth
This misconception suggests that simply saving money will lead to wealth. However, you will accumulate wealth through making investments and strategic financial planning.
9. My investments are safe because I have a financial advisor
This lie assumes that all financial advisors know it all, neglecting the importance of due diligence and doing your research before making any financial decisions.
10. I need to focus on making passive income
This misconception overemphasizes passive income and underestimates the value of actively improving your career and income through hard work.
11. Wanting to ‘get rich’ is terrible
This lie wrongly stigmatizes the desire for financial success. However, having financial goals and striving for a better future is a positive mindset that shouldn’t be discouraged.
12. I don’t make enough money to save
This lie excuses not saving due to low income, but almost everyone can take steps to save some money, even with limited resources.
13. Money is made to be spent and you can’t take it with you when you die
This lie encourages reckless spending and neglects the importance of financial planning and security for the future. This habit can lead to enormous debts and financial instability.
14. Shopping at a discount (sales) is saving money
When you buy discounted products, you still spend even if the product has a 99% discount.
15. I’m going to start investing
This lie procrastinates investing, missing out on the potential benefits of growing wealth over time. Starting to invest now, even with small amounts, is crucial for financial growth.