7 Money Myths That’ll Make You Think Twice

Money myths or half-truths have a way of shaping our financial decisions, often without us even realizing it. From what money “gurus” on social media, what we may have unconsciously picked up for others, to what is conventional “wisdom, here are 7 money myths you should know.

Let’s debunk some of the most common money myths or half-truths that may be holding you back from making smarter money moves with your money.

1. Investing will make you rich

It is good to invest your money but it is a myth to believe that it will make you rich automatically – unless you are either dealing with a large amount of money or investing over a long time.

This is pure maths. The average return on the S&P 500 is 9-10 percent per annum. So you are probably getting a thousand dollars for each ten thousand over a year.  While this is good, it is nothing when your goal is to become rich.

Investing to get rich will have to be qualified by using a large chunk of cash or doing it over a very long time, for it to be impactful. This is the same reason why your funds manager will always suggest you start investing on time – towards a retirement plan.

Investing is a good way to protect your money against inflation, which slowly devalues your money over time. That is one reason it is still good to invest your money, but do not expect it to transform your fortune.

2. Cutting out all unnecessary expenses will solve your money problems.

For the average person, “unnecessary expenses” usually mean less than $500 a month in expenses, and often, these are things that add to the quality of life – extra groceries, car maintenance, some extra clothes, family expenses, etc.

If it is just an extra $500 a month is what is needed to fix all your money problems, then the main problem is not really how much you are cutting off, rather, it is with your earning power.

Pay more attention to finding ways to increase your earning power rather than cutting expenses. You can always increase your value or earnings, but there is a limit to how much you can cut from your expenses before it begins to affect the quality of your life.

It is good to also mention that, when the “unnecessary expenses” are luxury goods or items, you should let go of those to free up some cash for the essentials.

3. Saving money to be able to retire

When you save money to retire, a portion of it actually gets eaten up by inflation. Also, the cost of living tends to increase with time. This makes it a money myth – saving money to be able to retire. Similar to investing to get rich.  You need to do it for a long time and with a large sum.

Saving money to be able to retire only works if you are making a lot more money than you spend and can channel the excess toward savings and investments over a long time.

Don’t expect to save a few thousand a month for  5-10 years and expect it to cater for 3 decades of retirement. Start saving for longer, and substantially more.

Other factors that make saving for retirement a myth include economic uncertainties, tragedies, unforeseen circumstances, etc.

4. You don’t need money to make money

This money myth is often misleading. Forget what is popularly taught, money is good, and more money is better. When you take the path of not trying to make money without money, your path to success is much more tedious. You often will be sacrificing your time – which is a much more valuable resource – to make money.

Take advantage of any cash you can get to further your course in making more money, rather than sacrificing your time. It is much more efficient to make money using money.

5. Always talking about money will make it come to you.

We get this money myth from social media “money gurus” and influencers. “you attract what you talk about or think about”.

In reality, no matter how obsessed you are about money, it has no positive impact on how much you make. Talk is cheap and without action, it is worthless.

The rich don’t actually spend much time talking about money when they are together. They focus on solving problems. When you identify a need and offer a solution, money naturally comes to you (What Really Leads To Success? – Eight Big Things That Does)

It will interest you to note that many of the so-called money gurus are broke, they only make money from selling you their self-help courses.

6. Money won’t Change you

It is a myth. Money will change how your life feels –  it may not change your core values or what you admire in the world but it will impact how you relate to other people without you even realizing it.

Also, you will need to change yourself and adopt much more healthy habits for you to make some more money. You will value your time more and those of others, you will know what relationships are worthwhile and those that are a waste of your time.

You tend to also learn to value to simpler things of life when you are rich. No pressure to prove anything to anyone or to meet your basic needs.

7. Follow your passion, and the money will follow

What you are passionate about may not be what will bring you the most money. I may for example be passionate about cooking or fitness but if I am in a place where neither of these things is needed, I am not likely to be able to make much money from it.

Be passionate about your business or at least find some excitement in them, to push you through difficult times. But what you are passionate about must be that which solves people’s problems for you to make money off it.

Find a need or a problem, and a way to solve it. Create some passion for it by becoming good at it or at least some sort of excitement from it. Make the passion or excitement some sort of fuel to drive more of it.

All content on this site is based on my personal experience and reflects my own opinions. They should NOT be taken as financial, legal, or investment advice. Please seek the guidance of professionally trained and licensed individuals before making any decisions.

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