5 Common Money Myths that Wealthy People Don’t Believe

5 Common Money Myths that Wealthy People Don't Believe
5 Common Money Myths that Wealthy People Don't Believe

There is so much bad advice floating around in our internet age and myths about money management are definitely included. 

Finances can be a huge source of stress in our lives, businesses and marriages so it’s always best to listen to a money expert when it comes to how to manage it.

Working in the finance world for as long as I have, I’ve heard SO MANY things that make me shake my head and wonder where in the world we’ve been getting our ideas about money. 

So, I’ve put together a list of the top 5 money myths I’ve encountered and why I believe we should leave them behind.

1. “Living paycheck to paycheck is a fact of life.”

According to Dave Ramsey, a well-known American financial guru, “78% of US workers live paycheck to paycheck.”

Living paycheck to paycheck means that you’re using most or all of your income to pay for monthly expenses, leaving little or no income left for savings or investments.

This is a very common issue when it comes to finances, affecting many different incomes levels, and it’s a widespread myth that this is just a fact of life. 

It doesn’t have to be.

Getting educated about how to manage your finances is a great place to start in moving away from the paycheck to paycheck model. 

2. “It’s rude to talk about money!”

What? Really! I’ve heard this money myth a lot. Finances get lumped in with politics, religion and parenting styles when it comes to those taboo topics you should never discuss at a dinner party.

In our culture, it is widely accepted that talking about money is insensitive or even outright rude and should be avoided.

The problem with this is that, without talking about our finances, we’ll miss out on opportunities to grow and learn skills to handle our money more effectively.

We welcome advice or guidance from family and friends on other topics and I’d argue that we should do the same with our finances.

Of course, if your great uncle recommends hiding your money in a jar under your bed, I’d say you might want to reconsider…

3. “I’m too young to save for retirement”

Whew! This one has huge implications for your future financial security. 

Experts recommend that you begin saving for retirement as soon as you can.

While this may seem strange, it actually makes sense. The more time your money has to grow, the more money you’ll have available when those retirement years come. Why? It has everything to do with compounding interest.

Compounding happens when you earn interest or dividends on your originally invested capital and then you turn around and reinvest those earnings, growing the value of your original capital. Over time, that capital grows and so will your earnings, increasing the rate at which your investments grow.

The more time this compounding cycle has to do its work, the more money you’ll have for retirement! 

4. “I don’t make enough to save right now.”

Sadly, this common myth is probably the one I hear most often and is a hard one to break free from because there are grains of truth to it. 

Like we talked about in our first myth, it’s very plausible that someone living paycheck to paycheck may not have much of their income to put toward savings. But I would argue that even putting a few dollars away each is a step in the right direction.

And that goes back to the idea of compounding. 

Even small amounts saved over time have an effect on your future financial security. 

5. “You should never use credit cards!”

I totally get where people are coming from on this one. Credit cards can be financially risky if not handled well.

For those that struggle with their spending habits, it makes sense to avoid credit cards and their temptations.

But for those who are able to pay them in full each month, choosing a credit card with a good rewards system can be a good option for building credit. 

There are many common myths when it comes to managing our money. Finding ways to dispel these myths and correct some misconceptions enables both small businesses and individuals to build wealth. 

I talk about some of these common myths and how to build wealth in your small business inside my course.

Check out my free webinar for some bookkeeping basics.

5 Common Money Myths that Wealthy People Don't Believe

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