Season 1, Episode 16
Money Myths and Misconceptions
Jen and Rita dive right into the myths around money!
What is the number 1 myth out there today?
You have to risk your money to make money!
There are so many options when it comes to having your money work for you. And each option has pros and cons. The higher-risk accounts may have a higher yield and the safer accounts may have a lower yield. The best approach is to diversify and have investments/savings across the spectrum.
Schools should be teaching finances in school.
Hello. You are trying to pass the blame. Here is the thing, you are placing your trust in the hands of someone else to teach your kids the fundamentals in money. If you aren’t sure where to start, get a book! Educate yourself. There are countless books on how to be a millionaire or how to grow wealth. Break the generational habits. We only grow from what we know.
Whether you realize it or not, you are modeling your financial habits to them. If you always say, “I can’t afford it,” then you may be teaching them to say the same thing. Your spending habits, savings habits, and management are all observed by your kid! It’s about teaching them the right habits now vs. the wrong habits you have already done.
I grow wealth by leveraging debt.
Yes, but no. Building wealth is like building a house. You need to build a foundation of safe money before you start building the walls. Wealthy people always try to mitigate risk before taking on new investments. If you can’t handle that debt (meaning you can’t handle paying it back) then you aren’t ready for that investment. Instead, do what you can at the place you are at right now. Build the foundation and have fun with it later.
You have to pay off all of your debt before you can start saving.
You should always be saving. Always! If you are at a point where you do not have any money left over to save after paying your debts then you have a debt, income, or budget problem. Savings should be a habit and treated like a bill. Plus, if you don’t have any savings for emergencies or growth, you will end up out of debt on a very temporary basis because life happens.