Common money myths busted

Here are some common money myths busted!

Whether it’s from parents, friends, colleagues, or just the internet, there are tons of myths around money and finances out there that I’m sure you’ve heard at least once in your life. Well, let’s set the record straight on a few of them!

Myth: Buying a home is a good investment.

Truth: It can be, but not always. There are so many factors to consider when making the decision to purchase a home. Many of our parents lived through a time of unprecedented real estate growth. According to Investopedia, real estate values increased an average of 6.4% every year from 1968 to 2004. The market for real estate has been more volatile since 2004, and the crash in 2008 changed everything. Yes, buying a home can be a good investment but it's not as guaranteed as your parents may believe. The likelihood of success goes up the longer you stay in a home, but it’s not a lock like it used to be, so know where you are buying and do your homework.

Myth: Get a stable job and stick with it.

Truth: There’s no such thing as a stable job. We live in a time of always-evolving information and technology. A company that is relevant today, may not be in a year. Keep your skills and certifications up to date and always be looking for your next step. 

Many entry-level positions also don’t provide benefits like health insurance and 401(k) options. This should be all the more reason to continue searching until you find a company that provides the benefits and atmosphere that you’re looking for (and pays you what you’re worth).

Myth: Credit cards are the only way you can build credit.

Truth: Credit is a necessary evil that when utilized properly can help you gain access to better homes and more options when it comes to how you live. However, with great power comes great responsibility. Having a significant amount of debt due to using your credit is a dangerous game that often leads to debt building on itself and your credit is left in the past.

Build your credit by paying your bills on time, in full. 

Myth: Investing is only for rich people.

Truth: There are many ways you can invest your money, and not all of them involve large sums of cash. All investments have a risk-reward function, and the stock market is no different. While there is risk, there also is opportunity. So, allocating some of your savings to a diversified stock portfolio can be a good way to get a return on your money – especially over a longer period of time, such as with retirement funds. 

It doesn’t take a lot of money to start, so don’t get deterred by that thought alone. Do research on the amount you’re willing to invest. You’d be surprised what you come up with.