20 Money Myths Limiting Your Money-Making Potential

Your Money Mindset Is Important

There are a lot of myths out there about how to manage your money.

Here are 20 money myths that you need to stop believing today. 

Myth #1: I Can Always Save Money Later

One of the biggest reasons broke people never seem to get out of their financial situation is that they keep thinking there will always be a later. 

Even though it may feel good at the moment, this I'll save later money mindset is procrastination at its finest. 

There will always be a later. But if you keep putting things off until then, the only thing that has been delayed is your ability to have money for yourself.

Myth #2: I Don't Need Life Insurance

You never know what will happen tomorrow, and if something does end up happening to you or your family, you may need to fall back on more than an emergency fund.

Everyone needs some form of protection for their future because no one knows what might come next.

Life insurance coverage is important.

If you are married, life insurance can pay off your mortgage and give your spouse money for living expenses. 

For singles, you can donate the money to a cause you care about deeply or someone in your family.

Myth #3: I Will Always Be Broke

With a little bit of education and some motivation, you are capable of making more than enough each month. It all comes down to your mindset when it comes to earning money.

There are plenty of side hustles that anyone can do with the right amount of hard work and motivation. 

If you think you will always be broke, then chances are you probably will always be struggling to build wealth. 

Open your mind to new ways of thinking and doing. 

There's no telling how much success you might find in life.

Myth #4: Others Have That, so I Should Too

“A flower does not think of competing to the flower next to it, it just blooms.” Zen Shin

Stop comparing yourself to others. Other people’s money is their business, not yours. 

True financial independence does not pay attention to any one person. Truly rich people focus on growing their bank account and pursuing financial freedom. 

In other words, most people are very good at appearing wealthy yet have no idea how money works and certainly do not have multiple streams of cash flow. 

Myth #5: I Should Buy a House if I Can Qualify for the Mortgage

Whenever you are thinking about real estate investing, ask yourself this question. Does this person have a vested interest in me buying a house?

If the answer is yes, take their opinion with a massive grain of salt. 

Most real estate agents will say there’s never a wrong time to buy, and houses are assets. 

Wrong. There is most certainly a wrong time to buy any real estate. Most people who buy a house do not convert it into an asset where they have the mortgage paid each month by others. 

The reality is the mortgage company wants to loan you the most money because that’s how they become wealthy. Banks use other people’s money to bolster their finances and balance sheet. 

Simply because you qualify for a higher mortgage doesn’t mean it’s the best idea for your finances. 

In all things, financial seek out advice from someone rich and does not have a horse in the race. 

Wealthy people can give you far more valuable advice than broke friends. 

Myth #6: Having a Lot of Money Is Greedy

Simply having wealth does not mean someone is greedy. Ignorance perpetuates money myths. 

Wealthy people make the world go round, and their finances are why most people have a job and enough money to pay their utility bills. 

Myth #7: I Deserve This

How? What did you do to deserve it? 

Wealth creation is created by abstaining from conspicuous consumption until your money makes money each month. 

Rich people have assets. Poor people have things. 

Myth #8: My Credit Scores Doesn’t Matter

Having an excellent credit score is almost as good as having loads of money. 

A low credit score will cause you to pay more interest on loans and may cause you to be denied housing. 

Having many credit cards can tempt you to spend dollars you don’t have. 

Improve your credit score, or you will have to pay cash all the time. That would suck. 

Myth #9: Getting a Car Loan Will Help My Credit Score

Seeing how a vehicle is a depreciating asset, a monthly payment is usually quite silly.

A car loan is only a good idea in certain situations. 

If the interest rate is significantly below inflation’s, it may be a good idea to finance the car. 

Let’s say inflation is 7%. If you can secure a car loan for 3%, the interest rate is negative 4% in real terms. 

You make a 4% return by taking the loan instead of paying cash. 

Although the car loan will help your credit score, this should not be the only consideration. 

Simply because you qualify for a higher car loan amount doesn’t mean you should take the extra dollars. 

Myth #10: Millionaires Are Born Into Wealth

88% of millionaires are self-made.

You don’t have to be born into the right family to create wealth for yourself. Even if your parents gave you no money, you can still create the life you want. 

Myth #11: I Need a Lot of Money to Start Investing

Multiple smartphone apps allow you to invest with as little as $5. 

Investing only $5 won’t be life-changing, but you need to start somewhere. 

Myth #12: Financial Advisers Will Take Care of My Money

Educate yourself, and you will never need to trust someone else with your money. 

Learn about best practices with compound interest, using the bank’s money to invest in real estate, and of course, having a tailored budget for you and your family. 

Myth #13: I Need a New Car

You probably don’t need a new car. 

Ask yourself the motivations on why you need the new car. 

Unless your current car requires extensive repair, you can keep the old car. 

Having a cheap car can help you divert more money toward investments and not depreciate things like vehicles. 

Myth #14: I Should Buy a House

When I bought my first house, multiple things happened in the first year. 

Rats, leaky pipes, and loud neighbors were all things I didn’t like about my first house.

Answer some important questions before you buy a home.  

Myth #15: All I Need to Do Is Make the Minimum Payment

With average credit card interest rates at 16%, it will take years to pay off your balance if you only make the minimum payment. 

Credit card debt is something to be avoided 100% of the time. Having credit card debt will stop you from pursuing your wealth potential. 

If you do not have discipline, don’t have a credit card. 

Myth #16: All Debt Is Bad

Most debt people have is entirely useless. 

Having debt on a credit card and not showing anything from it is a surefire way to be broke and living paycheck to paycheck. 

Useful debt pays you every month. It’s an asset. 

Having a rental property with a mortgage of $1000 per month and renting it out for $1500 per month gives you $500 in positive cash flow. 

The debt is the reason you can make money this way. 

Debt is like fire. You can cook your food or burn down the house. You choose. 

Myth #17: Avoid Credit Cards

Use credit cards to your advantage, not the bank. 

Learn about how credit cards work and how they can help you build wealth. 

Myth #18: I Should Buy This Because It's on Sale

Stop buying crap you don’t need. 

Myth #19: I Can't Get a Credit Card With Bad Credit

There are many secured cards that you qualify for, even if you have bad credit. 

Myth #20: I Need a College Degree for Financial Success

No, no, no. 

Unless you go into a field where you need an advanced degree (law, medicine), a degree is mostly useless. 

The university used to be a place of open discourse and idea-sharing. Unfortunately, universities now do not serve the higher purpose of enlightenment as they once did. 

The democratization of information is killing traditional higher education. 

You can learn more about nearly any subject from free video lectures on Youtube. 

Don’t buy into the 20th-century mindset that a college degree gives you higher status in society. 

It doesn’t. 

The Bottom Line: A Money Myth Can Be Unlearned

Simply because your parents didn’t give you a firm foundation of financial literacy does not mean you cannot learn yourself. 

Ditch the old beliefs and focus on the abundance that’s out there.