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10 Money Myths That Keep You Poor

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Money Myths That Keep You Poor

Ask anyone online about the best money tip or financial advice and you’ll likely find hundreds of different responses. The problem is that it’s not easy to tell which one is sound and which is just hearsay. In other words, these are just money myths.

A money myth is an untrue or unrealistic belief about your finances. While it might sound effective, it’s what keeps you poor. For example, You might hear someone tell you that investing in the stock market is the best way to get rich quickly. While it can help your income, it’s not a guaranteed solution. Without proper planning, you could waste all your cash trying to earn your money.

While there are many money myths that exist in the world, certain ones are too popular to ignore. If left unchecked, believing in it could be what keeps you poor and unhappy. As a self-made millionaire, I’ve been exposed to several myths and seen the real truth behind them. Here are ten money myths that keep you poor and the truth behind them.

1. All debts are bad.

For several people, debts are the deciding factor between a good life and a bad one. Many go into debt to either pay off existing deals or get some new luxuries in life. For example, a homeowner goes into debt when asking for loans to pay for an extension.  

In some cases, debt isn’t even a choice. College students and alumni are subject to all kinds of student debt. It can make earning money and building savings more difficult in the future. That’s why people often recommend avoiding debt altogether.

What’s the truth?

Not all debt is as bad as it sounds. Under the right plan and approach, it can lead to bigger payoffs. For example, the homeowner who wants an extension might be planning to sell that house. With the added renovation, it’ll raise the property’s value by a lot. It might be able to pay off their existing debts or even lead to more profits in the future. 

Money Myths That Keep You Poor Questions

What can I do to overcome it?

Whenever you are thinking of debt, always consider the implications. Is it a loan that’ll help you start a new business or pay off a medical expense? If so, then you need to think of how you’ll use it.

You should also remember to make your debts repayable. Certain companies let you pay back their debts with automated transactions or with monthly installments. By managing how you pay, you can have an easier time carrying the financial load.

2. One size fits all.

Here’s the funny about advice: people always think it applies to them. It’s the reason why many financial “advisors” try to use the same formula or plan for each client. You might encounter a supposed expert who claims that stockbroking or cryptocurrency is the best way to get rich. For them, everyone should follow the same path to get the best results.

What’s the truth?

Here’s the harsh reality about advice: it’s always subjective. You can’t expect two people to need loans for the exact same reason. Whatever kind of life you have, there’s no guarantee that the advice you get will always work. That’s why a “foolproof answer” is nothing but one of the money myths that keep you poor.

For instance, investing in stocks and bonds can be a useful way to build your income. However, not everyone can rely on stocks. It takes time, patience, and preparation to win the stock game. Plus, the budget can vary for investors of low-risk and high-risk profiles. Regardless of how good the advice is, it has to fit the person or it’ll never work. 

What can I do to overcome it?

To keep it simple, always do your research. No matter how many financial books or advice columns you read, the only way for it to work is to examine your life. The best advice has to fit your needs, whether that’s getting profits or building a savings account.

3. Invest in precious metals, like gold and silver.

In the past, gold and silver were the key ingredients to a good economy. Many people spent their lives gathering precious metals to make a fortune. It’s the reason why some investors still put a lot of their budget and focus on gold, silver, and other kinds of metals.

Money Myths That Keep You Poor Time

What’s the truth?

Precious metals are like stocks; their value fluctuates frequently and can easily turn from a surefire profit into a heavy burden. That’s why it’s it’s one of the money myths that keep you poor. Unless you can predict the future, there’s no telling when gold or silver will rise or fall in value.

What can I do to overcome it?

Diversifying their income is going to pay off in many ways. It’s not bad to invest your money in precious metals, after all. However, like any investment, it can’t be your sole answer. Use the cash you’re willing to lose when investing in gold or silver. Take this same approach for other kinds of investments, like stocks and mutual funds. The more you expand your options, the more you can see a rise in profits.

4. Cryptocurrency is the next big thing.

While gold and silver have unstable and volatile values, they’ve been around for so long that the appeal makes sense. However, cryptocurrency is one of the newest innovations for finance in recent years. Making money on Bitcoin or Ethereum feels like a dream, especially when you see the millionaires who’ve traded their coins for cash. It’s no wonder why people are so excited and curious about this new technology.

What’s the truth?

Cryptocurrency is far too risky to spend all of your money on it. No matter how nice Bitcoin sounds or how high its value is, the prices change faster than the tide. Look no further than the collapse of FTX to see how cryptocurrency can become costly.

What can I do to overcome it?

Being ignorant can be what keeps you poor and out of profitable reach. If you want to invest your money in crypto, make sure to study how the technology works. Check on the forecasts and see just how high or low the cost is going. It might sound like a lot of work, but it’s better to stay prepared than to be surprised by a price fall.

In addition, keeping all your eggs in one basket is one of the money myths that keep you poor. Like the previous suggestion about gold and silver, you should consider expanding your portfolio instead. As long as you avoid making cryptocurrency the only investment, you can still take time to explore it and see how it fares.

5. Investing is so easy that anyone can do it.

Search for financial tips or investing ideas online and you will see so many self-proclaimed “gurus” preaching a solution. They might tell you about their special course or mental lesson plan to make getting rich easy. They might post a couple of videos that highlight how simple it is to build a million-dollar index from scratch.

In other words, they think that they know all about your financial flaws. They might even claim to know the money myths that keep you poor. Then, these gurus will try to sell you an idea to make profits an easy formula. It might sound so special and simple that you think you could do it in your sleep. 

What’s the truth?

If these so-called gurus are so brilliant and they found the ideal rags-to-riches answer, why do they fade from popularity so quickly? They might claim to know everything, but these people don’t actually realize that their tactics aren’t foolproof. The truth is that any financial plan’s worth can fluctuate, whether from inflation or emergency expenses.

What can I do to overcome it?

Rather than trying to find an easy solution for making money, it’s better to do the research first. I became a self-made millionaire because dedicated my time and focus to studying everything about real estate. I wanted to know everything there was to know, from mortgaging and funding to sales and remodeling. To this day, I’m still studying and learning. Unlike these gurus, the real experts that I know of always spend time learning more about the changes in tactics and profits. It’s a never-ending lesson and it can yield both financial wins and personal lessons. Knowledge like that is worth much more than any of the money myths that keep you poor

6. Rich people are evil.

It’s not a secret that people think money is the root of all evil. Whether a cartoon character like Mr. Burns or a real-life figure like Al Capone, it’s easy to think that all rich people are evil. They have all the influence and money in the world, right? How could they possibly relate to the struggles of those with less money or luck? Demonizing them might seem funny, but a lot of people truly do believe that the richest people are the most heartless and uncaring.

Money Myths That Keep You Poor Shopping

What’s the truth?

I grew up in the projects and I had an illiterate mother who worked three jobs to provide for my family. You might think that I hated rich people because of how tough our lives were. However, I worked at a form folding company with a boss who drove a nice Porsche. He was someone who taught me a lot about how business is done and he worked every single day.

What I’m trying to say is that in my personal experience, not everyone who is rich is evil. There are wealthy investors who put all of their time, effort, and energy into their tasks. There are also poor people who are not as honest, decent, or hardworking as they seem. So before you demonize those people in suits, take a moment to consider that maybe, just maybe, they’ve been doing a lot more than you credit them for. Otherwise, you’ll just be fooled by the money myths that keep you poor.

What can I do to overcome it?

Regardless of what money or childhood you had, it’s all about character. If you want to be rich, you need to have the dedication to succeed. If you want to make money and earn an honest living, you need to be ready to work harder than ever. Don’t think of money as some evil parasite that’s going to change your life. Instead, look at it as a tool to make your life better and more meaningful than ever.

7. There’s no point in saving small amounts of cash.

Have you ever thought of pocketing that nickel or dime to save for later? You might have thought it was a brilliant idea as a kid. Now, as you focus on finding a career, earning decent cash, and becoming independent, those pennies don’t seem so special. Whether you tell the clerk to keep the change or toss the coins to some cup you never touch, small cash sounds useless. It’s probably why people think that you’re better off waiting for a dollar bill, instead of stashing a couple of coins.

What’s the truth?

Think of change like this: a small grain of sand may not seem like much, but a beach is full of it. Even if it’s made up of these tiny pieces, it all grows to become a landmark of nature.

Throwing away all those dimes might be what keeps you poor. In your mind, you think you’re getting rid of something useless. However, dimes build to dollars. The reason you haven’t seen that yet is that you’re tossing it to the side. Think of how easy it would be to save one and keep it for later. Soon, the more pennies and dimes you get, the more it grows into a stash of cash. It may seem like small amounts, but with enough time and patience, they can grow into a life-saving budget.

What can I do to overcome it?

To make small amounts of cash more important, you have to practice saving them. You might think that saving $500 bills is easy, but that’s because you think of the number value.

Instead, look at those coins as a part of your habit. You want to foster an attitude of saving, not discarding. However, you need to start at the smallest level. If you can’t control yourself from tossing away a nickel, imagine how hard it would be to try and save a thousand bucks. Sure, it’s a higher number, but you’d be surprised how many people struggle to keep their cash at hand. 

If you can keep a couple of quarters in your pocket, you can start to build a habit of keeping them. Soon, the quarters grow to dollars, and the numbers get higher. This way, once you make the most of the smallest bits of cash, you can build your savings and remove the money myths that keep you poor. 

8. Avoid risks in any and all financial situations.

It’s common knowledge that there are risks and rewards in any financial transaction. From stockbroking to loans and bonds, investing can benefit or harm you. For instance, putting a lot of money into Bitcoin can lead to lots of profit if timed correctly. Otherwise, it might lead to heavy debts and losses. Because of that, many people think it’s wiser to look for a risk-free plan. The last thing they’d want is to put their lifestyle in danger of bankruptcy.

Money Myths That Keep You Poor Meditate

What’s the truth?

You’ve probably heard of this famous saying: “No pain, no gain”. It’s the same principle in any financial plan you have. Regardless of how well you prepare, there is always going to be a risk. However, if you try to wait or plan for a risk-free investment, you’re better off waiting for pigs to fly.

What can I do to overcome it?

For this myth, what keeps you poor isn’t the risk itself; instead, it’s the hesitation and fear that holds you back. While it’s understandable, you can’t live your life waiting for a completely safe bet. Some of the most prolific investors of all time have suffered heavy losses and setbacks. It’s simply the nature of finance.

That said, you can do yourself a favor by seeking advice and reviewing the situation carefully. Whatever insurance or contract you plan to sign, make sure to read all you can about it. That way, it’ll be easier for you to decide whether or not it’s worth going after. And don’t be disheartened if things don’t work out. There’s always another investment that you can try and work towards.

9. Budgeting is a chore and only ruins your life.

Whereas the last myth was about finding a perfect answer, this one is more about avoiding trouble. There are those who think that making a budget is limiting and unrealistic. It’s not uncommon to see people go over the limit or spend more than they initially planned.

For example, you might have a remodeling project happening at your home. However, you’re suddenly blindsided by signs of mold and tear in your walls. The remodelers recommend fixing this first, although it’ll cost some more money than you planned. Because it can go over the budget, people might think that it’s better to ignore having one. Instead, they’d probably prefer to go by their gut instincts and spend however much they want.

What’s the truth?

First, let it be clear that going over budget isn’t an ideal scenario. However, it’s more likely to happen than you think. Sometimes, projects don’t go the way you want and you’re forced to adapt. In those cases, pushing past the budget is all about planning and preparation.

That said, don’t ever underestimate the power of a budget. Working within a certain limit keeps you grounded on what to spend and what to avoid. Imagine how difficult it would be to go into a supermarket with no list or spending ceiling. You’d likely buy too much or too little to make it worth your while. In other words, refusing to budget or plan your expenses can be one of the worst money myths that keep you poor.

Instead of looking at a budget as a problem, look to it as a guide. Budgets can help you determine which expenses are worth paying for and which can be ignored. With a budget, you can also protect your savings from bleeding out and running dry.

What can I do to overcome it?

The best way to make budgeting important is to plan ahead for all possible needs and expenses. Always consider what your main goal is for any transaction. From buying a gift to renovating a room, it’s always crucial to know what the main point is. You wouldn’t need to worry about losing too much cash if you stay focused on fixing the room or finding the gift.

Another important tip is to always consider an emergency or back-up budget. Like I said before, going over the limit is more common than you might think. To avoid losing cash, set aside a certain amount to act as your backup cash. For example, if you have a project worth $1000, try to save an additional $150 to cover any unplanned expenses. By following this method, you can 

10. If you think and believe that you’ll be rich, it’ll come true.

Lastly, this kind of myth is what keeps you poor and unhappy in life. There’s an idea that as long as you believe in yourself, you’ll become rich. Whatever plan or career you choose, it’s all going to work out fine if you just visualize your success. In other words, you can supposedly will your own future to be profitable and worthwhile.

What’s the truth?

The idea of believing in yourself and striving for success is admirable. There’s nothing bad about wanting to be rich or to make a lot of money. That said, the myth is wrong because it makes you think that all you need to be rich is to believe.

The harsh truth is that believing in your success isn’t enough. To make it in this world, you need to also put in the effort to succeed. Hoping for the best won’t get you far in life. However, if you hope and you work hard to make it happen, it’ll come faster than you think. Remember, nothing is impossible if you dedicate yourself to achieving it.

What can I do to overcome it?

Optimism alone will not give you the money you want in life. To make your future financially strong, you have to start working towards it. Beyond the financial myths you see, study more and discover what kinds of investments exist. There might be a business or a project that you’ll grow to love and cherish. There could be accounts and retirement plans that align with your goals. The only way you can find out for sure is by looking for it and building up your skills.

Article Sources

  1. Ali, M. (2022, March 1). Money Myths Busted - 10 Money Myths That Keep You Poor. YouTube. 

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