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Money Myths Of The Poor
By PT Cheng
From tender age, we were exposed to myths about money and
myths of being rich. Be it from our parents, brothers,
sisters, relatives, or friends. The myths that we have
determine our financial well being in our adult lives.
I call them myths because they are not true. Or, at least
they are not giving you the complete picture.
We can't blame our parents for the myths in us. They
already gave us the best they could. And don't forget that
times change. Things were true then may not be true today.
If you want to move ahead financially, you have to be
aware of the myths that you have about wealth and money.
And do not let the myths stop you from living a wealthy life.
Money Myth 1: Work hard and you'll be rich.
Many of us think that by having a job with a big company
would ensure that we're on the path to financial freedom.
With so many layoff announcements, we might be out of job
anytime. I'm not saying that you'd be one of them but the
fact is there is no job that is guaranteed.
Recently, my friend was laid off in less than a month in
his new job. Having a job is merely helping you to cope
with daily expenses, providing you shelter, food and
clothing. Do not be misled that a job or your employer will
turn you into a rich and wealthy person. No one cares more
than you about your wealth.
Money Myth 2: Saving is good.
When I was small, I was told by my mother that I must
learn to save. I thank my mother for inculcating the habit
of saving in me. The habit of saving helps me to develop
discipline. Many people think that when they save enough,
one fine day they'll be rich.
But is saving alone enough to make you wealthy?
I came to realize that if I only depend on my savings to
get rich, I'd have to wait for a long time. That's the
problem with savings, it takes a long time for you to get
rich. Saving alone is not enough. You have to learn to
invest your money in other investment vehicles to grow your
money faster.
Money Myth 3: Debt is evil.
The other common myth about money is debt is bad. Did your
parents ever tell you that borrowing was bad? Mine did. Not
all debt is bad, actually. It depends on how you spend your
loans that you're getting. If you take a credit card loan
to buy a flat plasma TV, it's a bad debt. On the other
hand, if you take loans to start a business or invest in
real estate, the debt is good.
If debt is bad, can you imagine what would happen to
companies if they are not allowed to take loans from the
banks? As a general rule, if you use debts to buy things
that increase in value over time, they are good debts. You
must know whether the debt you're taking is good or bad.
Money Myth 4: You need money to make money.
When I ask my friends what's stopping them from starting
their own business, the common answer is "I don't have
money. And it takes money to make money." I do agree that
it takes money to make money. But does it really to be your
own money?
Everybody has limited resources when it comes to achieving
our financial goals. I do not expect you to have everything
when you plan to build your own business. You might need
financial backing, manpower, expertise, or a coach to guide
you. If you lack resources in any areas, find the
resources. Someone else will definitely have it. It does
take money to make money, but you can use OPM - other
people's money.
Money Myth 5: Investing is risky.
Many think that investing is risky because they lack
education in investing. Investing itself is not risky if
you know how to control the risks. Most of us invest based
on a tip from a friend or broker without doing our own
research. When you lose money, you say that investing is
risky. And you tell yourself that you'll never invest again.
To be frank, everything we do has a risk in it. Learn to
manage risks by educating yourself. You can educate
yourself by attending seminars, reading books, or even from
the Internet.
Money Myth 6: Wealth reflects in material possessions.
Material possessions reflect your level of wealth. This is
a misleading measurement. Someone who is driving a Porsche
might not be rich and he might highly in debt.
Wealth does not reflect in material possessions. Wealth is
a state of mind. Wealth is how fast you can become rich if
you're stripped of everything. As Henry Ford once said
after he was asked what he would do if he lost all his
fortunes, "I'll become a millionaire again within five
years."
We possess one or more of the above myths, consciously or
unconsciously. But what is more important is to be aware of
the myths and replace the myths with facts. By doing this
will tremendously improve your financial well being.
PT Cheng is the co-founder of FinanciallyRich.com. His web
site is packed with tips on how you can be your own boss,
make more money, and have fun along the way! To be the
first to receive his future articles and tips, subscribe
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