When you start earning, then a lot of people will tell you a ton of things to follow. Do you know why? Because when you are making more than people will be jealous of you and rather than being the motivation in your life, they will try to bring you down. But since they can’t hurt you in any way, they will create myths inside your head. These money myths are common and are happened to believe by a lot of people out there. Even the educated part of your society believes in it.
What are these money myths?
Well, these are common money myths which are needed to be avoided at any cost because they eat up your brain and does turn inside it. They are usually really harmless, but they come with a lot of misconceptions about earning.
For instance, it does not harm you to believe in them, but they surely take up a lot of time in your thoughts. For example, you might have heard your family members saying this and that when you are earning.
And at some point in your life, you have believed in them. Well, these are just common, and they are random myths.
5 Common money myths to avoid right now
Here are the most common money myths you need to avoid right now.
Myth #1: You have to be rich to invest
You want to make an investment, but you have to be rich enough for them. You might laugh at this myth right now, but this is true, and a lot of people believes in it. And You don’t have to be costly for your investment. Investment can be done by a lot of people and especially if you want to have a secured future for yourself.
Finance is the part where you draw your own money, and there is always a risk to it. But you don’t have to be rich enough to do it. There are a number of investment options available which require very minimum monthly commitment like investing in ETFs, Mutual Funds, Index funds, direct equity investment etc.
Moreover, Investment is the best way to grow your wealth. Believe it or not. We have seen people increase their wealth with the source of small systematic financing alone.
Myth #2: Savings cannot be done enough if you don’t earn enough
Savings are always a crucial part of your life. You don’t have to earn enough for that. If you want to save, then you can do it even if you are making 2k per month. It does not depend on what you make, but it solely depends on how much you are willing to think about your future.
Do you know that if you save at least 5% of your income in your bank, then it will amount to a lot more than what you can think of? Your savings are an integral part of your life, and you should never believe in this myth at all. If you save, then you are doing a favour for yourself and your family too.
If you are struggling with your budgeting, a simple rule that you can follow is the 50/20/30 principle. According to the 50/20/30 strategy, you should allocate 50% of your monthly income on ‘Needs’ (like rent, food etc), 20% of your monthly income on ‘Savings’ (like your retirement fund, investments etc) and the remaining 30% of your monthly income on your ‘Wants’ (like travelling, dining out etc).
You can read more about the 50/20/30 principle here.
Myth #3: You should leave your money management to hired experts
Don’t leave your money management on your financially educated partner or your family member or to a high priced financial advisor. If you are earning, then you should handle by on your own. It’s just a myth that you need to hire someone to manage your money.
Always remember that whatever you are winning belongs to you and only you. And that’s why managing your own money efficiently is an important skill that everyone should learn.
For example, if you’re trading in equities or commodities from your earnings, always make sure to trade only that much money which does not affect your family even if you lose a bit.
Similarly, if you’re actively involved in an online slot game, make sure to read everything possible about the game, have a strong strategy and a certain budget decided upon. This way you can manage your financials better without depending on anyone.
Myth #4: Investing in gold is always safe and better
Always if you earn more, then you have to invest in gold. That is an absurd myth, and a lot of people believes and invests in gold. A large proportion of the Indian population considers Gold as one of the best options to invest in India. Here, gold is not only treated as a satisfactory long term wealth creator but also auspicious and a symbol of social status.
Anyways, Gold is a long term investment option and not suitable for earning short term gains. Moreover, the prices of Gold fluctuate in a cyclical manner. Therefore, one cannot expect Gold to perform well all the time.
Overall, if you are seeking a regular source of income through your investments, Gold may never serve this purpose. However, if you want to hedge your existing investments in Equities and Bonds, you should consider investing in Gold.
Myth #5: Buying a home rather renting a place
You should hire a home, and you should not rent one is one of the most common myths which you will hear. A lot of people out there will explain this absurd point to you. Well, buying a home gives you better security, an area which is there for you and where you can count your name.
But the decision of buying vs renting a home is not going to be the same for every individual. Whether you want to buy a house property or take it on rental, it totally depends on your financial situation. If buying accommodation suits my financial situation, it may not suit yours. Moreover, both options are having their own perks and shortcomings.
Money myths are pervasive
Yes, myths regarding money are prevalent. Make sure that you are earning better and doing the best thing for yourself as well. If you are drawing and spending, then you are no useful than the rest of these people.
You need to save your cash for future purposes, invest in options where you see that there is a built-in potential for you. Once you have found out your subject, it will be good enough for you.
And if you are afraid of spending cash a lot more than what you need, then you can opt-in for credit card usage as well. Credit cards are right for you, and they help you to manage your budget and even stop you from overspending. Nonetheless, whatever be your situation, always try to avoid the common money myths discussed in this article.