Most of the information people have about money are painfully false. And the worst part of it is that these myths have kept a lot of people in financial bondage for a long time. Sadly, these myths will continue to be passed down if they are not debunked. So guess what we’re doing? Yup. We’re debunking many of them today, beginning with a very popular maxim…
1. A penny saved is a penny earned: No. This is, in fact, a myth. If for no other reason, the fact that inflation could easily make nonsense of the value of money you save over time. The secret to being wealthy isn’t to save but to earn. Yes, saving is important, but if you want to make it big, you need to earn, increase your current income and learn to invest wisely (mejor cafetera express para casa).
2. Buying a house is better than renting: Maybe in the 1940’s, but not now. You must never see your home as a foolproof investment. Prices for real estate are very capricious these days and can fluctuate at will.
About paying off your mortgage quickly, it should be a matter of whether you consider that house your permanent residence. If it isn’t, then take your time. If you intend to live there forever, on the other hand, then yeah, go ahead. It will give you some peace of mind.
3. Only the Rich can invest: Lies. Anyone can invest. In addition to increasing your income, investing money is another way to get wealthy. In fact, the best time to invest is when you’re “broke”.
4. A small credit balance increases your credit score: Yeah. And the earth too is flat. This is nonsense. If you want to increase your credit score, ensure that your balance is completely paid every month, amongst other things. But we can tell you for free that that none of those things include leaving any balance, big or small.
5. Cash is King: No, it is not. Sometimes, you could score some serious rewards by using a credit card. Simply ensure that you pay the balance completely at the end of the month like we said earlier.
Here’s something to get your appetite wet a little. A man once racked up so many reward points using a credit card that he was able to go on a vacation to Disney world with his family at no cost to him (mejores hornos de sobremesa).
6. Banks are the best place to keep money: We’re sorry to burst your bubble, sweetheart. But even this is a myth. One CEO of an asset management firm in New York, Elle Kaplan, explained savings accounts as a “modern-day mattress” when it comes to saving money. In fact, you lose more money over time because of the inflation.
Maybe in the times of our parents or grandparents the bank was a great place to save money. The interests were hefty then after all. However, in these modern days, that just isn’t true anymore.
There are still many more money myths to debunk but this is all our space can take for now. But we hope this short article has helped you to see the basic realities about money, though.
And remember, the first step to living a financially free life is to know the truth about money.