Are you a believer?
Here are 10 common myths people believe about money that they SHOULD NOT.
Repent & cleanse yourselves of this blasphemy. 🤑
Hey guys, max here. I have heard so many pieces of bread advice being a financial coach. It is truly unbelievable. Some of the things I've heard that are just literally completely not true, false, the exact opposite of truth. Here are 10 common myths I hear. And then maybe you believe a couple. So if you want to get ready, we'll just throw these in the waste bin of history.
The first one being credit is the devil or unimportant. This usually comes from people who have had parents who've had trouble with their credit or have abused it. And it comes to bite them in the rear end pay cash for everything. Right? Well, in a place like the coast, which is what I live on California, the coast, not many people have a couple hundred thousand dollars or more.
To buy a piece of property or to buy a home. So someone's going to take out a mortgage and a loan. A lot of times the tax advantages and inflation make sense. So you're almost paying cash interest over a long period of time. And I know people who pay pay only in cash, it would go crazy and be telling them that.
But it's true. Inflation eats up dollars like nobody's business credit cards, mortgages auto loans. Although, those are not really the best credit is like a tool. It's like a screwdriver. You use it to unscrew a screw. Can you imagine using a hammer to get that screw out? It's the wrong tool. Figure out what tool works the best and use it to your advantage because that's all I'll credit is a tool to be used to your advantage.
Second one paying the minimum payment will help your credit score not to give the devil his due. I guess it may. Perhaps, but the fact of the matter is this you're going to the pay crazy interests somewhere between 10 and 25%, maybe even 29% APR over the time. You have, you have the credit card and when you only pay the minimum payment, almost all of that goes towards interest.
If you have any decent balance on there. So I guess it could, but it really, really doesn't. Okay. And the counter advice, the true advice is when you use a credit card and you put $500 on the month for the month, pay off that $500 in full. So you better have that 500 bucks in your checking account. If you don't have it, then don't, don't use the credit card.
And don't buy whatever you're buying. We have a extreme addiction of buying and purchasing things because it gives our brain a little bit of dopamine, which feels good. So if you don't have the money. It's very, very foolish to put it on a credit card. Third, one best way to deal with credit card debt is by consent.
Elevating it in a personal one. And again, to give the devil let's do it may work may and I say may on a very, very broken, fractured bridge. That's about to fall off because if you haven't learned the mindset of being rich, there is 0.0% chance. You will ever be able to act like a rich person. If you simply move.
Credit card debt to personal loans and still use the credit cards and accumulate more debt. Now you have the credit cards and the consolidation, personal loan, which may be lower interest, but you're still not read warning habits and actually not just relearning, but acting upon good advice. And I could advice is.
Paying off your credit cards and having almost a zero balance only when completely completely necessary. The next one, I hear this in so many circles. It's almost like having money now is a sin against humanity. Having a lot of money means you're greedy. And I guess there's a lot of factors of this income, inequality and things of that nature.
But the fact matters this someone who's a multi, multi, multi, multi, multi multimillionaire. Does not make them gritty. It actually probably makes them less gritty. They probably think about money less than you and I, because they have so many people working for them. Think about like that, the more money you have, the less you have to think about it, the less money you have, the more you think about it.
So which one is actually grieving. I've heard many times your income and what you get from the world. Isn't direct an exact proportion to how much value and. The value you bring to others and how many people you help in the process? Not many people became super rich by screwing everybody around them. I don't think that actually exists.
You have to bring value to others, or you will not have success. Monetary. I don't know about you, but having money is nice that make any one greedy. And when I have a hell of a lot of money, like this green shirt, I'm wearing lots of green. I won't be grading because I have come to the point where being generous, it's far better than anything in the world, buying a house, the best thing to do again, bad advice, because for every situation there is.
Very specifics that need to be considered. Do you plan on moving in a year? Do you plan on staying for your whole entire life and the place? Those are all considerations, not every single financial decision has to be made with dollars and cents. And that's tough for me cause I'm like a money nerd and get down to the really nitty gritty pennies.
But that, that doesn't happen. Make sense. You have to really think about trajectory over the longterm. Where are you going to be and is buying a house? A good idea. How's the real estate market and the area you're buying it. These are all questions you have to consider a bit, just simply saying buying houses is a good idea.
Getting a car loan will help me establish credit. Yes. And this is a double wide short because I've taken, you can have a car loan at about 2% when inflation is 2%. So I'm really paying almost a zero. So again, every situation is different than maybe a good idea. It may not be, if you have to go to for a high interest, 15%, Carlos.
I would do my best to buy a $2,000 car and run that until the wheels fall off. You have to remember, you're making a monthly payment on an asset that is pretty much guaranteed to depreciate over the life. So that means you have a five-year car loan. You spent $20,000 from the car. It might be worth half that at the end of the loan and those numbers suck.
But again, if you're able to find some financing that is. Almost nothing very, very little, and there's some financing that's 0% APR, 0.9% APR 1% when it's that tiny, you're actually ahead at the end of the game. If you take the car loan as opposed to paying cash, it's the future value and present value of money.
Yes. It's not fun to do, but it's a good consideration to think about because a lot of times. It's a bad idea to take that one off, but sometimes it's a good thing to take the one out. So I'll crunch the numbers and figure it out for yourself. Financial advisors will take care of your money, so you don't have to do anything, right?
Oh man, this one makes me go. Absolutely cuckoo. What is a financial advisor? Someone who has a license from the state that says they can advise on financial management, the, the qualification to be a financial advisor. I don't care how hard the test is. A lot of times, these people have nothing in their bank account.
They are simply, they good at selling things and having an income, blowing it on their brand, new Mercedes Benz. And believe me, I love Mercedes just like anybody, but these people are not the people you want to take advice from. You want to find someone who is a practical advisor, a practical person who has done what you want to do.
If you're a real estate person like me, and you have know someone who has 10 plus rental properties and they have them all rented out. And they have the rents come in every single month, get connected with them. The person that asked them a billion questions, because a lot of when people have already come to this wealth point, more or less, they want to give back.
But there's not many young people excited about finance. There's not my community. No pants committee is so tiny. It's okay. It's smaller than tiny. However, you can find someone who has had the success that you want to have in your life. Connect with them. Build a relationship and go buy them a cup of coffee, because it's a good thing to start with a cup of coffee.
And that's the counter advice, financial advisors, a lot of times how good stuff I'm not bashing on all of them. I'm just simply saying most of them all the time, they don't know how to build wealth. They know how to sell you products that enrich them. Not you always, always, always do your own research.
Always a 401k or IRA is the best it's investment you can make for the long term. I'm going to say yes to this one. Yeah, I know I'm doing a video on the myths. Yes. For most people, people who understand finance a little more granular and don't trust financial advisors or mutual fund managers like myself, want to take it into your own hand in their own hands.
And I would imagine if you're watching this with you, you want to take your finances into your own hands, which means. You don't want to trust someone else with your money. And when you're investing in a 401k or IRA, you are in a sense trusting the mutual fund manager or the specific stock you're picking to perform.
And yes, lots of people have made lots of money over the whole entire time. This country has been established on making money in the stock market. Very possible. I am just simply. A little more conservative. I like to touch things to feel things that's probably real property is encouraging to me because it seems as though whoever owns the dirt and the buildings, they seem to always have the upper hand in everything because it's a hell of a lot harder to seize a building.
On a piece of land. It is a stuck, a stock is something where the stock, the stock has their stock. If the stock goes here, it's not tangible. And I'm all about tangible things because when the apocalypse comes, your 401k does not do anything. And I am by no means fear-mongering I simply stay ready. I am prepared for.
If the power grid goes down, if we have a solar flare, there's so many things that may happen our existence and very equal or BM, the human race and the earth in general is very fickle. It can disappear very quickly. And I don't know about you, but I'd like to stay prepared for nearly anything. That's what makes me up.
Buckets are only for uptight penny pinchers. This is hilarious because people will say that, yes, they'll watch shark tank the same night when they have a 30 day page business plan on how they're going to return money back to the investors. Yeah. That's that's business plan. That's about a hundred times more complex than a budget.
A budget is simply how much money you earned your month and your expenses and your asset accumulation, whether it be real estate, 401k, whatever it is, there's only, only three spots to it. Really only two, honestly, money taken in money going out. You want it to be a surplus every single month. And that seems very difficult.
I don't know about that. Difficult. I spend one hour a month on my finances. Yes, one hour per month. It doesn't take a long time. Have systems in place. It didn't take a long time at all. It truly, truly doesn't. And the hour I spent on my finances. Has helped me eliminate so much unnecessary spending on stupid things that I'm never going to use.
And I still have some of those things. I laugh at them. Sometimes I look at my garage and think, am I right? We're going to use that. Have I used it? Yeah. At one time. Oh, three years ago. When did I buy it? I don't know. Cause I have the addiction of spending just like everyone else. But the budget gives you a plan because if you simply don't have a plan, you will fail.
Miserably over and over again, you gotta have a written planning period. And then the last one claiming zero, zero on your w four is the best. And for maybe it will be for you. I just don't like this. When you put zero on NW four, you will be taxed at the highest rate, which means if you have any deductions, any children, anything whatsoever.
I don't have any kids. I still, I still do this. Put it, when you put a higher number, they don't take quite as much tax and you have a less of a refund. I don't know about you, but giving the government and interest free loan until April of the next year. I'm not a fan. I am slipping out a fan, give me the money, give me the freedom and choose what it is I'm going to do with it.
And I will do accordingly. So I've had up to four on my w four. Yes for exemptions on my w four, but that may not be work for you. So figure out what's best for your situation. I just know that I've heard the put zero and you're good to go, but the reality is I am better suited to handle the money than anybody else, because in reality, it's my money.
I do whatever I want within reason. Those are seriously. I've heard all these it's crazy. These are the 10 myths that I hear. On a weekly basis. It's, it's incredible how pervasive these things, however, there's more than what myth have you believed or have you heard that's complete bogus advice. Common below, right?
The second I want to know, cause I want to laugh with you and hopefully we can these and put the counter correct advice more into the stream than the convoluted, murky, bad advice. That was fun. I will see you guys next time and a happy penny pinching.