One of the biggest obstacles we all face is not a lack of resources, but too much misinformation. The world is rife with money myths and lies that can lead you down a path to the poor house.
Here are some of the most common money myths and how to overcome them.
1. You Need Loans to Pay for College
The idea that loans are necessary for college is a myth. You can get a good job and have a bright future without a costly degree.
There are tons of alternative education paths, such as online courses, certifications, and apprenticeships. There’s also the age-old path of the school of hard knox and entrepreneurship.
If you decide higher education is for you, instead of relying on loans, you can apply for scholarships and grants, work part-time, or take advantage of work-study programs. There’s also community colleges.
There’s more than one path to success in life, and most of them don’t require a college degree financed by debt. The world is filled with billionaires and multi-millionaires who never went to college.
#2. Save your way to wealth
Yes, saving is important, but it’s not going to build wealth because of the eroding effects of inflation on saved money. Using your money to buy assets that can generate income or appreciate over time also creates financial value.
Wealthy people leverage compound interest, which leads to exponential growth. For instance, a $10,000 investment at a 10% return grows massively over the years, unlike the same amount in a savings account at 1% interest.
Saving won’t necessarily save you.
3. You need money to make money
The truth is, you don’t need money to make money; you need to create value. Value is what people are willing to pay for, whether it’s a product, a service, or an idea. Steve Jobs, Oprah Winfrey, and Jeff Bezos started their businesses with little money but created value.
To make money without money, find your value proposition, market it effectively, and monetize it. The world will always pay for something valuable. It’s your job to create it.
4. Avoid failure
One of the biggest myths that keeps people stuck in a cycle of poverty is the idea that failure is to be feared and avoided.
This lie stops you from taking risks, learning from mistakes, and growing. Failure is simply the result of trying something new and not getting the outcome you expected or desired. It’s not a reflection of your worth, intelligence, or ability. It’s just feedback telling you what works and what doesn’t.
Instead of viewing failure as a negative, see it as a valuable learning opportunity. Failure gives you insights into what works and what doesn’t, allowing you to improve your approach next time.
Analyzing your failures helps you grow and improve your decision-making skills. Embrace it as a natural part of life and the learning process.
5. Work hard for money
This lie is based on the assumption that money is scarce and you have to compete with others for it. It makes you think that money is something that you have to earn by trading your time and skills.
The reality is that there’s too much money chasing too few places to place it. Silicon Valley is littered with venture firms that need to invest billions of dollars.
Companies such as FTX , WeWork, Theranos and Uber all raised billions from the biggest venture firms within a short time. I’m not advocating that you create a fraudulent business. But sometimes it’s not only about working hard. It’s about focusing on creating actual value.
6. Only the lucky or those born rich are wealthy
This lie perpetuates the mindset that “I’m just not meant to be wealthy.” Instead, you need to take responsibility for your life and recognize that you have the power to control your financial destiny.
Continuously learn and grow by acquiring new knowledge and skills. Seek out new opportunities and networks that can help you achieve your goals. Ask for what you want, negotiate for what you deserve, and charge what you are worth.
#7. I’ll never be able to get out of debt
Believing in this lie can trap you in a vicious cycle of debt forever. The truth is that anyone can get out of debt if they have the right mindset, discipline, and game plan. I know, because I was once buried in student debt and felt like I wouldn’t be able to escape.
But I made a decision to take control of my financial life and make paying off my debts the number one priority over everything else.
Replace thoughts like “I’ll never be able to get out of debt” with “I’m going to get out of debt by (fill in a date).” You’ll need to know your numbers, choose a debt payoff strategy (snowball or avalanche), set goals, and track your progress. You’ll also need to be willing to make sacrifices. But the short-term pain is well worth the long-term reward of being debt-free.
8. I’ll invest when I make more money
The reality is that you don’t need to wait until you have a lot of money to start investing. Fractional shares allow you to buy a portion of a share of a stock. Low-cost ETFs are accessible to everyone.
Robo-advisors are online investment platforms that use algorithms to create and manage a portfolio for you with low fees and require small minimum investments.
By investing small amounts regularly, you can take advantage of compound interest and grow your wealth over time. So, even if you only have $100 saved, you don’t have an excuse not to invest.
All of us have limiting beliefs. But I hope I’ve been able to debunk these money lies and change how you see money from a new perspective.
