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16 Lies We Believe About Money - Part 3

July 26th, 2011 at 10:15 pm




Throughout your life you’ve heard millions of messages about money, debt, credit, savings, retirement and spending. Most of them came from the advertising industry; some may have come from teachers and mentors. But perhaps your greatest source of financial influence came by observing your parents’ financial habits. For most of us, that’s not good news. We’ve all been sold a long list of financial lies. But it’s time to wake up to the truth and start making a better choice.

In parts 1 and 2 of this blog post series, we started the journey toward financial truth. Now to wrap up the series, I present:


16 Lies We Believe About Money

(part 3 of 3)




11. Everyone Should Aim to Save 10 Percent of Their Income.
“My parents always said that 10% of my paycheck needs to go straight in the bank.”

Why It’s Bogus: It may be a good idea to put 10% of your income into savings. But that percentage will vary (sometimes drastically) depending on your life-stage and where you are in your financial journey. You may need to save much more than 10% when you’re building up your $1,000 beginner Emergency Fund. Once you’re debt free, you need to build your Emergency Fund up to cover 3-6 months of your living expenses as fast as possible. That too may require you to save much more than 10%. If you’re on the verge of needing to replace a to vehicle, planning have a baby soon, going back to college, starting a business or saving for a down payment on a house, you most definitely need to be saving much more than 10% of your income.


12. Putting Money Into a 401(k) Is Always The Best Investment
“I just need to invest in my company’s 401(k) and I’ll be set at retirement.”

Why It’s Bogus: Another “usually”…it’s usually a good idea to invest for retirement inside of your company’s 401(k) plan. It’s almost always a wise choice to invest at least up to the amount your company will match you. However, most 401(k) plans have very limited, and often under-performing, investment options. If they don’t offer a match, it would be a better idea to invest in a Roth-IRA which gives you the same type of tax benefits, but with more investment options. Do your research and get professional guidance. Don’t flippantly set up a mis-allocated 401(k) plan and think it was automatically a good decision. It’s your money and no one will care about your money as much as you!


13. Money Is The Root of All Evil
“It says in the Bible that money is the root of all evil. People lie, cheat, steal and kill for money….it’s evil.”

Why It’s Bogus: I’m not here to preach, but let’s be clear…the Bible says no such thing! The often misquoted verse actually says that “the love of money is the root of all kinds of evil” (1 Tim 6:10). It is dangerous to love money. Greed causes people to do some horrible things. But money itself is neutral…it’s not good or evil. It’s just paper; it does what you tell it to. We sponsor a child in Africa with money, we help fund a non-profit with money. Money feeds the homeless, treats disease, cures addiction and provides shelter, clothing and education. Because of the good that money can accomplish, good people (including you) need to concern themselves with making money and accumulating wealth so we can do some good with it!


14. It’s All Their Fault
“I just can’t get ahead because of…the government…my parents’ bad example…bad luck…the crooked bank…”

Why It’s Bogus: Most people, myself included, are pre-programmed to shift blame and resist taking responsibility. But the truth is only you are responsible for your financial situation. The bank didn’t trick you when they jacked up your credit card rate. It’s not the mortgage company’s fault that you signed up for a mortgage you couldn’t really afford. Stop playing the blame game. We’ve ALL made dumb financial moves. But taking responsibility for your actions and learning from your mistakes is incredibly liberating! And when you do, you’re able to take the steps toward a solution. You can’t change the past, but you can take responsibility for creating the future you want!


15. If I just try harder, I can save more, keep a budget and pay off my debt.
“I just need to set my mind to it and exert my will-power.”

Why It’s Bogus: Let me have a Dr. Phil moment here and ask, “How’s that workin’ for ya?” Will power is great for launching off, but it’s almost never sustainable! If it was, we’d all be skinny and we’d all be rich. Just saying you want to do something and “trying harder” is a great plan for failure. Financial success does require some will-power and it does require you to try harder. But more importantly, it requires you to make some tough decisions, set some specific (written) goals, to develop a systematic plan, to seek accountability and to surround yourself with people who are moving in the direction you want to go. Learning to manage your money and getting out of debt is hard work. But if you have a solid plan, accountability and support, you can absolutely do it!


16. But Clint…you just don’t understand myyyyy situation…
(note the *whiny* emphasis on the “my”)
“You just don’t understand, I can’t….I don’t….”

Why It’s Bogus: In the words of Tyler Durden, “You are not a beautiful and unique snowflake” (us guys will recognize this from Fight Club). I’m not trying to be insulting in anyway. But I want to acknowledge that we are ALL in the same boat….and your situation…it’s probably not that unique. And you definitely shouldn’t let it hold you back! There are a million reasons NOT to start a budget…NOT to begin paying off debt…NOT to save an emergency fund…NOT to start planning for retirement… But you work too hard and make too much money to live your life broke and in debt! You, your family and your future are too important to make excuses. So unless your family is vastly wealthy, it’s time to start taking control of your finances…today…right now…get to it!


If any of these money lies have been preventing you from living the life you want, I want you to know there’s no better time than now to change course and start achieving financial freedom and peace!


This is your money and your life…take control!


Yours In Freedom,

Clint



***Join the conversation…what will you do immediately to begin taking control of your money and life?



Debt Free

16 Lies We Believe About Money - Part 2

July 19th, 2011 at 03:52 pm


The original post can be found here: 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,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?