101 Common Money Myths

by Ron Haynes

mythbustersWhat if much of what you think you know is wrong?

Just because a belief is widespread and pervasive doesn’t mean that it’s true. If you read or hear something about personal finance or money, take a few moments to think it through. Do some independent research to see if there could be another side to the coin.  And never let a financial myth stand in the way of achieving your financial goals. The only way one of these money myths can stop you is if you believe it.

I assembled some pervasive money myths after listening to unsuccessful people over the years. This is a big list, but I’ll bet you have a few you could add to it. Which of these have you heard?

invest, investor, investing, lending

1. I don’t need to start a business or ask for a raise, I’ll just wind up paying more in taxes anyway.

2. Saving 10 percent of my income is plenty to carry me to financial freedom in my retirement.

3. There is a magic bullet out there somewhere that will make me rich – I just need to find it.

4, All credit cards are alike.

5. Budgeting is for nerds. I don’t need to waste my time.

6. A few late payments on my credit card won’t hurt my credit score.

7. A few bounced checks won’t hurt me either. The bank knows I’m good for it!

8. An emergency fund is for someone who always lives in fear.

9. I don’t want anything expensive so I don’t need a savings account.

10. I’m debt free so I don’t have to worry about managing my money or budgeting.

11. More money will make me happy.

12. I’m renting out my home while I’m living in another city but I don’t need to tell my homeowners insurance company.

13. I can’t switch checking accounts because I’m using overdraft protection.

14. I can eat out at restaurants as cheaply as I can prepare meals at home.

15. The more credit cards I apply for, the better.

16. I don’t need a will since my spouse and I own everything jointly.

17. My home equity is my retirement plan.

18. I don’t make enough money to save.

19. Going to a private college is always worth the cost.

20. Individual stocks are the best investment for the long run.

21. I can time my stock buys and sells to take advantage of trends in the market.

22. No one can pick stocks effectively.

23. Renting a home is like throwing money away.

24. My work is just a job and all I need to do is enough to not get fired.

25. All loaded mutual funds are bad and any no-load fund is better.

26. I don’t need to understand “how” an ETF makes money, I just need to know that it does.

27. All mortgage companies have the same rates and fees.

28. Real estate agents really understand the ins and outs of personal finance.

29. I’m not very good at math so I can’t manage my own money.

30. I always get a raise and a bonus every year so I don’t need to worry about setting up a budget.

31. Being happy is a direct result of being able to buy whatever I want.

32. Money is the source of all evil and trying to make more money is a bad thing.

33. It’s a fantasy to imagine that someone would PAY me to do what I love.

34. With today’s low interest rates, I’m better off keeping my money under a mattress rather than in a savings account.

35. I can make extra money anytime I want.

36. Making extra cash by using the Internet is easy.

37. You always get what you pay for.

38. The US income tax is illegal and voluntary according to their own charter.

39. One of the major advantages of home ownership is the ability to deduct your mortgage interest on your income taxes.

40. Real estate investing is the answer to all my financial problems.

41. Late night television infomercials have great ideas for making more money.

42. Don’t worry about the fine print – credit issuers won’t put anything nefarious in the contract.

43. Bad credit won’t stop me from getting a great job.

44. Bad credit won’t stop me from renting my dream apartment either.

45. Unemployment benefits will keep me afloat for six months or more.

46. I shouldn’t deprive myself of anything.

47. It’s too late to do anything about college financial aid.

48. Money is scarce.

49. Paying all bills online is always cheaper.

50. If I decide to walk away from my home, the mortgage company won’t care because they get to sell the home and keep the profit.

51. I’m too old to start saving now.

52. I’m too young to save just yet.

53. I’m middle aged and still trying to get established so I don’t need to save either.

54. I don’t need to worry with protecting my identity.

55. Term life insurance is always the best bet.

56. I’m too young to waste money on life insurance.

57. I don’t need any life insurance because no one is dependent on my income.

58. No matter how much I have on deposit at the bank, I’m protected by the FDIC.

59. A debt consolidation loan is the answer to my problems.

60. I can declare bankruptcy on my student loans and get rid of them forever.

61. Bad credit will follow me for the rest of my life.

62. All credit cards come with automatic travel insurance.

63. Life insurance is voided in cases of suicide.

64. Only the rich pay higher taxes.

65. Stockbrokers are required to have my best interests at heart.

66. When the market hits the skids, it’s time to sell everything.

67. A 401(k) is always the best way for me to save for retirement.

68. I don’t have the time to develop a side income.

69. I’m smart enough to do everything financial on my own.

70. I can’t find a job that I really want.

71. Whatever it is, it won’t happen to me.

72. It’s useless to save money for college because my kids will be less eligible for financial aid if I do.

73. Once you hit your salary goal, you’ll be satisfied.

74. I can change my phone number and get those debt collectors off my back.

75. Using Consolidated Credit Counseling will hurt my credit.

76. If something is on sale, it makes sense to buy it … just in case you need it later.

77. Actively traded mutual funds outperform index funds.

78. To retire, you’ll need 80 percent of your current income.

79. Retirement means kicking back and relaxing all the time.

80. I shouldn’t worry about paying off my mortgage early.

81. I can’t do anything to positively affect my credit report.

82. Young people don’t have credit scores.

83. A bigger home is a sign of success.

84. You can get full Social Security benefits at age 65.

85. Money experts are skillful with numbers.

86. When layoffs are coming at work, it’s best to stay under the radar.

87. My credit score will improve if I always carry a balance.

88. I need a large sum of money to start investing.

89. The government will take care of my mortgage if I have problems paying it.

90. Borrowing funds to invest (using other people’s money) is a sure-fire way to make a fortune.

91. I make rational, reasoned decisions when I spend money.

92. A stack of credit cards could be used to successfully fund a new business.

93. I should buy GOLD!

94. There aren’t any really creative ways for me to save money.

95. Minimum payments on my credit cards are okay.

96. I can’t increase my value at work.

97. I don’t need any particular strategy when paying off debt.

98.I need someone else to help clear up my credit.

99. MY job is secure.

100. I’m too old to buy life insurance.

101. There’s nothing money can’t buy.

Photo by Precious Dream

Note

This post was included in the Carnival of Personal Finance Tour of Ireland Edition at Being Frugal. Thanks Lynnae!

About the author

Ron Haynes has written 1000 articles on The Wisdom Journal.


The founder and editor of The Wisdom Journal in 2007, Ron has worked in banking, distribution, retail, and upper management for companies ranging in size from small startups to multi-billion dollar corporations. He graduated Suma Cum Laude from a top MBA program and currently is a Human Resources and Management consultant, helping companies know how employees will behave in varying situations and what motivates them to action, assisting firms in identifying top talent, and coaching managers and employees on how to better communicate and make the workplace MUCH more enjoyable. If you'd like help in these areas, contact Ron using the contact form at the top of this page or at 870-761-7881.


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{ 9 comments }

Matthew @ LifeOfAnInvestor

I agree with #3. Although you go into the other requirements of retirement other than money, I went in the direction that 10% just isn’t enough anyway.
Is 10% Enough For Retirement

Matthew @ LifeOfAnInvestor

Oops… I meant number 2

Ron

LOL, #3 might apply as well!

Turnkey Profit Formula

It is amazing, when you read a list like this you immediately start thinking of real people you know, real faces that at some point have told you exactly the same words.

I regret to say, most of these faces are sad faces because living by such set of principles is hardly the best way to handle yourself financially.

I had fun reading this list really, I think I will print it!

ctreit

Playing the lottery will lead to financial success. – Great list!

Credit Girl

Wow! Great list! I especially like number 101…Money can’t buy you happiness (at least not after a certain point)..

Shaun McGowan

If you think about it, this could be one of the most valuable things you ever do for yourself. Your beliefs come from conclusions you drew from your experiences in the past. Your conclusions have always been colored by your beliefs, and so your belief system, your personal mythology, is *your own creation*- and it isn’t right or wrong, it is just what worked for you at the time.

Ron

Very true. We need to make sure that we don’t hold on to a certain belief that worked in the past, but may not be working in the present!

Bankruptcy Ben

The one I hate the most is “I should wait for Mr or Mrs Right to come along to get responsible with your finances. Do you really want to startout with a stack of debt or a nice deposit on a house or a house?

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