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Home > 16 Lies We Believe About Money - Part 2

16 Lies We Believe About Money - Part 2

July 19th, 2011 at 03:52 pm


The original post can be found here:

Text is Debt Free and Link is http://www.daviscoachingsolutions.com/16-lies-we-believe-about-money-2
Debt Free

In part 1 of this series, we began looking at some of the myths, lies and the terrible financial advice that’s floating around out there. If you haven’t read part 1,
Text is I suggest you start here. and Link is http://daviscoachingsolutions.com/blog/16-lies-we-believe-about-money
I suggest you start here.

When you hear a lie often enough, you start to believe it. And when it comes to money and your finances, blindly following “conventional wisdom” without stopping to think for yourself can keep you from ever getting ahead. But confronting those lies and beginning to think for yourself will go a long way toward setting you on the path to winning with money.


To help you in your quest for truth, I want to expose:

16 Lies We Believe About Money

(part 2 of 3)




6. Investing In The Stock Market Is Too Risky
“I don’t want to take any risk. I’d rather just save my money in the bank where it’s safe.”

Why It’s Bogus: Investing in stocks and mutual funds does carry some risk. But so does not investing? The average inflation rate in the U.S. is around 4%. That means that every year, your “safe and secure” cash is worth 4% less than last year. By not investing and growing your money, you face the almost certain risk of losing 4% every year. Besides, investing isn’t nearly as scary as you may think and it doesn’t take a financial genius to do it. You simply need to educate yourself, understand the risks and learn to make wise investments under the guidance of a trustworthy financial advisor.


7. I’m Just Not Good With Numbers, So I Can’t Manage My Money
“My problem is that I’m just no good when it comes to math.”

Why It’s Bogus: The reason you feel inadequate with the numbers is simply that you’re unfamiliar with the process. The math required to balance your budget is nomore than adding and subtracting. The numbers are important. But learning to manage your money is much more about shifting the way you think and modifying your behavior. It’s a lot like weight loss. The math is simple (calories in/calories out). But to be successful, you must learn to control your emotions and change your behavior. And we can all learn to do that.


8. I’m Too Broke To Get Out Of Debt Or Save Money
“I don’t have enough money to pay down my debt or even save. I just can’t get ahead.”

Why It’s Bogus: There are rare and extreme circumstances in which a person really doesn’t have any extra money. But most people have the ability to at least save something. If you rationalize not saving in your current circumstances, you’re likely to rationalize it when your circumstances improve. But the excitement of seeing your debt decrease and your savings increase will help propel you even faster toward your goals. Don’t wait until you’ve got a bunch of extra money lying around to start paying down debt or saving. It’ll never happen!


9. Going to College Is Always Worth the Cost
“Everyone needs to go to college…the investment is always worth the cost.”

Why It’s Bogus: (First of all…save the hate-mail. I already know some will disagree with me here). In today’s world, the cost of a college education is much higher and the payoff is much lower than it used to be. The average college tuition is increasing at a staggering 7% per year. The high cost may be worth the investment. But do your research and consider that it may not be, depending on the profession you’re looking toward. I’ve worked with too many people with $100,000 of student loans, who are now a stay at home mom or decide they don’t want to work in their field of study. Don’t be one of them and don’t blindly follow the lie that college is always worth the cost.


10. Buying Someone Gifts Is the Best Way to Show Your Love
“Buying gifts for people lets them know how much I love them…”

Why It’s Bogus: Do you love your parents…your spouse…your kids…your bff? Is it because they buy you nice gifts? Or is it because of the bond you’ve developed, the time spent, the trust, the respect, the understanding, and the support? We’ve gone crazy with this idea that love equals stuff, and the marketing industry does everything in their power to propagate the lie! If you want to show someone you love them, spend some time with them, write them a hand-written card, give them a call, give them a hug…but don’t believe the myth that that buying a gift, especially an expensive gift, is the best or only way to show your love.


If any of these money lies and myths have been preventing you from living the life you want, 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 3 of “16 Lies We Believe About Money!”


Let us know if we can help you achieve the financial freedom and peace you want!


Yours In Freedom,

Clint



***Join the conversation…which of the first 10 lies have you heard or even believed in the past? How did you come to know the truth?

8 Responses to “16 Lies We Believe About Money - Part 2”

  1. Petunia 100 Says:
    1311097528

    I've never believed any of these, so can't speak for myself. I know an awful lot of people believe #6, which is a shame. There are many kinds of risk. Market risk is one kind, but by avoiding market risk you exponentially increase the risk of not accumulating enough money to cover your needs. In my view, that is the risk you want to avoid.

  2. scottish girl Says:
    1311101692

    I used to think like number 8 till I started to add small amounts to savings. It's adding up now Smile

  3. clintdavis Says:
    1311102000

    Hey Scottish girl, it's awesome that you're seeing the results. Little effort upon little effort....it adds up. And just because you can't do everything, doesn't mean you shouldn't do something. Keep it up...it'll pay off! Thanks for the comment.

  4. clintdavis Says:
    1311102197

    Hey Petunia, I'm glad to hear you don't believe any of these. Personally, I had believed several of them in the past. But we all have to learn to question "conventional wisdom" and think for ourselves more.

    I agree 100% about #6. I've heard of people who bury their money in cans out in a field. It's just sitting there losing 4% annually...let alone gaining anything. And the risk of this loss is all but guaranteed. With 4% inflation and taxes, you need to be earning 4-7% just to break even! The key to overcoming the fear of the market is education and developing a relationship with a trustworthy financial advisor. Thanks for the comment!

  5. Petunia 100 Says:
    1311113502

    You know, I used to feel strongly that no one needed a financial advisor. Investing isn't rocket science, it really boils down to just a few guidelines. (Save what you can, make a sensible asset allocation plan, rebalance regularly, watch your costs, ignore the noise.) But I have been hanging out on different investing and personal finance forums for a decade and a half or so now and I have noticed something: plenty of people who should know better behave very foolishly with their investing dollars. The main problem seems to be ignoring the noise. So these days I feel that if having an advisor saves you from doing foolish things (buying what is hot, selling after a downturn, etc.), then it is worth the added expense. But people should still educate themselves about investing, so that they recognize poor advice when they see/hear it.

  6. clintdavis Says:
    1311114636

    I understand where you're coming from Petunia. And I agree with your more recent thoughts about an advisor. In every area of life, it is almost always beneficial to have someone who is experienced, knowledgable and objective to guide you along. This is especially true when it comes to major financial and investment decisions. Ultimately, it's an individual's responsibility to manage their finances and their investments. But an advisor can definitely help keep you on track.

    That being said, you need to find someone who will take the time to educate you about different investments and strategies, but who will ultimately empower you to make the decisions. And certainly find someone whose fees are fair and who has a good track record. An investment advisor is definitely worth the investment.

  7. Jerry Says:
    1311374953

    College in and of itself doesn't offer insurance of a bright financial future, because there are still people graduating with English Lit degrees and wanting a job that starts at 75K/year. (FWIW, I totally dig English Lit... I just don't think the job market is too vibrant in that field right now). However, education itself - whether college or otherwise - can be planned to lead to a successful future. In general, a professional degree will usually offer solid money, but it takes a long time.
    Jerry

  8. clintdavis Says:
    1311711945

    Jerry, for a long time people believed that college was a guarantee of a good, high-paying, secure job and a successful future. But as you pointed out, simply "going to college" and getting any old degree doesn't guarantee anything, in regard to your future career success. Each student needs to do their research into potential schools and they MUST take the time to carefully consider the career path they are leaning toward. I have made the recommendation to a lot of students that take an internship in their chosen field. It would save a lot of money and wasted time to discover that you pass out at the sight of blood before going too far down the road toward a medical degree.

    Thanks for the comment Jerry. I always appreciate your insight!

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