#1.- Money is a bad thing (and rich people too)
This is the biggest myth about money, and it is easy to understand why. Many of our problems are related to money, either by its scarcity or by its abundance.
On the one hand, it is common to think that having more money will solve all your problems. On the other hand, it is also important to see money as a perverting element of people. It is the classic “look how Jaden has changed since he won the lottery or since they made him boss.”
The truth is that money is neither bad nor good; it is more of a tool that can help you achieve your vital goals, depending on how you use it.
Saying that money is good or bad is like assuring that a wolf, a tiger, or a shark are bad because they eat people. This is fine for children and fables but hardly fits reality.
Of all the myths about money, this is the one you should abandon first.
#2.- Money doesn’t give happiness
Having a lot of money does not guarantee that you will be happy; having a lot of financial freedom does. Just think of famous athletes who have gone through depressions despite having a checking account full of zeros.
Money doesn’t bring happiness in itself, but it makes it easier for you to find it if, instead of thinking in economic terms, you think in terms of financial freedom.
What money compares to is the time and freedom to be able to do whatever you want, no matter if it’s quitting your job to start a business, taking a sabbatical year, or, as in the case we’re talking about, having a financial cushion to be able to heal your mind.
#3. — Millionaires are those who make a lot of money
What is it like to be really rich? To make a lot of money or to have a lot of money? They may sound the same, but there is actually a subtle difference. In fact, you can make a lot of money, millions even, and not be a millionaire.
Millionaires are people who save a lot of money, who have a high net worth that gives them financial freedom. Would you say that a person who spends all the money he earns is a millionaire, even if it is millions per year?
#4.- What matters in life is to have a high salary
Making a lot of money will not make you happier. In fact, there is a point where your happiness will not increase much no matter how much your salary grows to $100,000 per year.
To understand it better: if you earn $8,000 and your salary increases to $12,000, your life will take a leap in quality, but if you go from $120,000 to $125,000, you will hardly notice the difference. This is what is known as the law of diminishing utility.
So the important thing is not to have a very high salary, what really matters is to have a lot of financial freedom. The sooner you abandon money myths like these, the better you can concentrate your financial efforts.
#5. — Saving is a matter of sacrifice
Your mind instinctively associates saving with deprivation, which is why saving is so difficult. Saving is not a matter of sacrifice but of finding a system that works and with which you can save effortlessly and automatically.
#6.- To save, you need a budget
A budget always helps. It is a great tool to know how, when, and where you spend your money. However, to start saving, you only need one thing: to get started.
It is as easy as asking the bank to schedule a periodic transfer at the beginning of the month of between 2% and 5% of your salary to another checking account. Do this, and you will already be saving every month. What about the budget? It will always help you, but it is not essential.
#7. money calls money: you need a lot of money to do more
I won’t lie to you; the more money you have, the faster your wealth will grow. It’s a matter of logic. When you have a lot of wealth, you have more investment options and can diversify your portfolio better.
In any case, the big difference is that you can devote a larger portion of your capital to investments with higher risk and higher return potential.
However, you don’t need a lot of money to make more. What you need to make more money is to have a plan to make your money work for you. It doesn’t matter if it’s formulas for generating passive income with a business or investing your savings.
#8.- Investing is only for the rich
In line with the above, many people think that investing is only for the rich or for people with a lot of money. Nothing is further from reality. Today there are investment options suitable for all profiles starting at $100 a month.
The only rule you must follow before investing is to have a financial cushion for emergencies, which must be in a safe place and free of all risks.
#9.- Saving is not worth it, better to live life
Surely you have heard phrases like: “Life is two days, and you have to enjoy it,” “Why save so much if tomorrow you can have a heart attack?
All these phrases have something in common; they see saving as an obligation and an effort.
Are you sure that you don’t enjoy the money you save? Yes, one day, you may stop going out to dinner, but in return, you will be able to do something much better: live your life without stress.
And that’s just one of the advantages of having a lot of financial freedom.
#10.- Saving is for the future
Most people save for contingencies and to secure their retirement. In other words, they save for the future and not very tangible and unspecific goals.
Thus, saving becomes a difficult journey. The solution is to change your approach and take advantage of the small benefits that saving provides in your daily life. The first one you just saw in the previous point: because you have a contingency cushion, you live with less stress.
As you increase your savings, your stress decreases, and, in return, your confidence increases. For this reason, stop saving for your retirement and start saving for more financial freedom.
#11. Being rich is a matter of luck
Luck can make you a millionaire, but only if you play the lottery and, believe me, the chances of winning are very small.
If you think that the rich are by chance, check who is at the top of the Forbes list of the biggest fortunes: Elon Musk, Jeff Bezos, Bill Gates, Warren Buffett, or Mark Zuckerberg. Do you think they managed to raise their projects and companies by luck?
Not at all. Sure they were lucky at some point, but what is behind all of them is a lot of work, passion, dedication, and time.
Being rich is evil
Neil Roach, founder of Boxroom Office, was raised to believe that money is the root of all evil. It turns out this popular saying is rooted in an incorrect interpretation.
The dangers associated with this myth are that “wealth is wrong and wanting to be wealthy means you’re greedy,” Roach says.
The biblical text this quote derives from reads:
For the love of money is the root of all evil.
Parents often misquote this text, Roach says, unintentionally raising their children with a skewed perception of what it means to have money.
One tip to overcome this myth, he says, is to ask children what issue they would like to change in the world, and then discuss how to generate the income to make it happen.
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