“The great enemy of the truth is very often not the lie,deliberate, contrived and dishonest, but the myth, persistent, persuasive and unrealistic”– John F. Kennedy.
Do you understand the damage you are subjected to by the finance misconceptions all around you? You see, in personal finance, everything is different and individualized. Never forget that whatever worked for someone else, might fail terribly for you.
You have had the debate of whether you can own a car before you own a house. This can be discussed and never concluded. Know the truth and walk to financial independence, which brings freedom. To succeed, you need to debunk these three misleading money myths.
1. Debt is bad
After taking a loan, what did it do to you? Did it add little value to your growth and prosperity or even diminished it. Or did it increase your wealth by amassing valuable assets that appreciate? Now this defines a good debt from a bad one. Therefore, good debt walks you to financial freedom.
This means you will need to evaluate the purpose of taking the debt. A college loan will see you through school, leaving you with the knowledge that will improve your future. Additionally, taking a mortgage will leave you with a house sorting your shelter needs in the future. On the same note, a car loan that will be used for business purposes will see the business increase in their sales.
To make the best out of it, evaluate why you’re taking debt and the implication to your personal finance.
2. I don’t earn enough to save
Enough is relative. Besides, remember that as you increase your earnings, so do your needs and wants. Unless you are intentional on your goals and budgeting, you will view saving as something for other people and not you. The rule of the thumb is, live below your earnings. Don’t forget the importance of a budget that you adhere to it.
A young person who has just been employed in her 20’s can see it funny to start saving for her retirement. Funny enough, when this same person gets to her 50’s she will say I’m too old to save a penny for my retirement. So, nothing is small if it’s collected and invested in income-generating projects. You are never young or old to do what is right. Start now and start with the little you earn.
3. Investing is for rich people only
This is another fairy tale that has deceived many. No one is born rich or poor; that’s your mentality. Just because you work in the informal sector should not view yourself incapable of reinvesting your earnings. On the contrary, you should equip yourself with financial literacy that is available online free and see where you can invest your cash in.
Admittedly, the lack of financial knowledge and literacy is what will make you more pitiable or more prosperous, not the amount of money you make or earn. Forget that you come from a poor background where you almost lacked the necessities of life, but forecast on what you can do to eradicate such.
You might have fallen for many money myths but, start all over again, with facts. The myths that are misleading are as many as they can be; however, it’s your obligation to verify whatever information in your disposal and act accordingly. All the answers to our needs are cut-to-size, and there is no size fit for all.