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16 Lies We Believe About Money

July 13th, 2011 at 10:34 pm



The original post can be found here: Debt Free

There are well-dressed foolish ideas, just as there are well-dressed fools. ~ Chamfort, French Playwright


We live in the wealthiest society in the history of the world. But in general, our attitude about money…well…it sucks! I admit, in the past (and sometimes in the present) my attitude about money has been unhealthy and just plain wrong. We’re brainwashed by so many false beliefs and terrible financial advice that it’s hard to know what’s true. Many of the myths sound very smart…even noble…so we never question them. But following them blindly can lead to disappointment and even financial disaster. But there is hope, there is truth, and there is a better way.

To help you begin to distinguish the truth from the lies, I want to expose:

16 Lies We Believe About Money

(part 1 of 3)




1. I Don’t Need To Do A Budget
“Budgeting is for nerds…it’s a waste of time…things will just work themselves out.”

Why It’s Bogus: Refusing to do a budget is like going on a road trip and refusing to look at a map. You’ll get somewhere…but it’s probably not where you intended. “If you fail to plan, you plan to fail.” A budget isn’t a document that restricts you and constantly tells you “No!” It’s simply YOUR way of telling YOUR money where YOU want it to go.


2. An Emergency Fund is Only For People Who Live In Fear
“An Emergency Fund? That’s so negative…people worry too much.” (And my personal favorite) “If you really trusted God, you wouldn’t need an emergency fund.”

Why It’s Bogus: Do you have auto insurance? Health insurance? Life insurance? Why? Because odds are you will face some kind of emergency at some point in life. An Emergency Fund of 3-6 month’s worth of your living expenses is another form of insurance. According to Money Magazine, 78% of Americans will face a major negative financial event in any given 10-year period. Having an emergency fund turns a crisis into a mere inconvenience.


3. If Only I had More Money, Then I’d Be Happy
“If I had a bigger house, a nicer car, took big vacations and could afford the “finer things in life,” then I’d be happy.

Why It’s Bogus: The “finer things in life” have very little to do with money. Waking up next to your spouse, hugging your kids, time with friends, deep faith in God…these are the finer things and they don’t cost a dime. “But Clint, if I had more money I’d be…” Are you sure? A 2006 Princeton study suggests otherwise: “Once you go beyond a certain level of poverty and well being, having more money doesn’t contribute to increased happiness. People with above-average income are…barely happier than others in moment-to-moment experience, tend to be more tense and do not spend more time in particularly enjoyable activities.” Don’t buy the lie that more money will magically make you happy.


4. Renting A Home is Like Throwing Money Away
“It’s a waste of money to be renting…you need to buy a home.”

Why It’s Bogus: Owning a home is usually a good investment. But when you are neck deep in debt with no savings, buying a home can keep you from ever getting ahead. Renting is almost always less expensive because you avoid things like taxes, maintenance fees and expensive repairs. So until you’re out of debt it may be a good idea to rent. With lower expenses, you’ll have more money to attack your debt and become debt free as fast as possible.


5. The Only Way To Get Rich Is To Lie, Cheat or Steal
“Look at those rich people…what a bunch of crooks.”

Why It’s Bogus: This lie is really just a judgmental excuse made by jealous people who don’t think they could ever become wealthy. But it’s just not true! In Thomas Stanley’s book, “The Millionaire Next Door”, the surveys reveal that the vast majority of America’s millionaires have extreme levels of integrity. They’re honest, ethical, generous people who work hard and make wise financial decisions. Don’t believe this lazy excuse of a lie.


If any of these money myths have been holding you back from living your best life, I want you to know it’s never too late to change course and start achieving your goal of financial freedom and peace!


Stay tuned for part 2 of “16 Lies We Believe About Money!”



Yours In Freedom,

Clint



***Join the conversation…what other lies and myths have you heard or believed about money? Share them in the comments section below.

7 Responses to “16 Lies We Believe About Money”

  1. rob62521 Says:

    Another myth: you have to have a lot to put in savings for it to really add up.

  2. clintdavis Says:

    That's a good one Rob, and you're absolutely right! Just because you can't save $1,000 or even $100 per month, it doesn't mean you can't start saving something. Do what you can with what ya' got! And those little amounts add up over time.

  3. baselle Says:

    My favorite myth: There's good debt and there's bad debt.

    All debt involves risk. The risk is that the asset you bought with the debt will at least pay for the debt you took out to get it. The more in debt you go the bigger the risk that the asset will pay off. The risk is also compounded by the number of assets you try to pay for using debt.

    Witness student loans, the classic "good" debt. The more you take out, the greater the likelihood that the asset you bought - the education - will not translate into a salary that will pay off the debt. Witness also a mortgage, the other classic "good" debt, and what happens when the value of the house is far lower than the mortgage you took. And if you have both, its not double plus good .... its extra extra bad.

  4. clintdavis Says:

    Well said Baselle. Saying there's good debt and bad debt is like saying there's good slavery and there's bad slavery. No matter how you look at it, debt's a bad idea. Thanks for the comment!

  5. baselle Says:

    Regarding debt - put a conservative price on your ultimate goal (asset), and don't overdo. And especially don't overdo because everybody tells you its "good".

  6. Jerry Says:

    The "THEN I'll be happy" myth is omnipresent and it is tragic. If you can't find something to enjoy in life while you lead yourself and your loved ones toward a goal, then you are doing something wrong and you won't be happy when you get there. Having money doesn't provide some magic insurance that you will be happy... some of the most miserable people I have ever met had a pantload of money. Honestly.
    Jerry

  7. clintdavis Says:

    Thanks for the comment Jerry. I've worked with and known a lot of rich people who were miserable. Money is neutral...it isn't good...it isn't bad...it doesn't make you happy or sad...it just does what you tell it to. Having more stuff and more money can be just as much a curse as a blessing...ask all those bankrupt lottery winners and celebrities in foreclosure that you hear about. Learning to be content is one of the most powerful things you can learn in life. As is learning that the best things in life don't cost a dime. Enjoy those and find your fulfillment in the things that truly matter.

    Thanks again Jerry!

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