As our world continues to change at a rapid pace, so too do the money rules that surround us & the way we handle our wealth.
Society has reached a point where some of the most fundamental teachings on how to manage our finances no longer apply. These classic “money rules” need to be updated, and they need to be updated fast.
Continuing to operate under these old-school money rules can actually lead to some serious financial trouble. We’re here to dispel them.
1. Saving is key
It’s no secret that saving money is important, but in today’s economy, it may not be the best strategy for everyone.
Back in the 20th century, frugality was seen as the key money rule to financial success. But with the advent of technology, which has made it easier than ever to access credit, saving is often a subpar strategy in comparison to its alternative – using debt strategically to grow your money.
For example, if you have a high-interest credit card that offers a rewards program, using that card to make all of your purchases could be a smarter strategy than stashing your cash in a low-interest savings account.
Likewise, growing your income is often a much better choice than trying to save every penny. If you have the opportunity to earn a raise or start a side hustle, take it. Just make sure you take stock of and deal with the extra administrative challenges – making invoices, creating your paystubs, and so on.
2. You need a job to make money
In the past, in order to make money, you needed a job. But thanks to the internet, that’s no longer the case.
There are now a multitude of ways to make money online, from freelancing and selling your services, to running a blog or online store. And the best part is, you can do most of these things from the comfort of your own home.
So if you’re looking for a way to make some extra cash, the internet is a great place to start.
3. Debt is bad
Debt is often seen as a dirty word, but that doesn’t mean it’s always bad. In fact, used strategically, debt can be a powerful tool for growing your money.
For example, mortgaging your home to buy an investment property can be a great way to increase your net worth. As markets all over the world continue to rise, buying property has become a more and more lucrative investment.
And while taking on debt should always be done with caution, if used correctly, it can be a great way to achieve your financial goals.
4. Investing is too risky
Investing may seem like a risk, but if done correctly, it can be an incredible tool to grow your money. The market has grown by an average of 7% per year (inflation-adjusted) for the past century, which is significantly more than what you would earn from keeping your money in a savings account. A family that put $50,000 in the stock market in 1970 would have over $2 million today (just plug in the numbers) – how much could that same amount of money make from 2020 onwards as our economy continues to grow faster due to technology?
5. Businesses require start-up capital
One of the biggest myths about business is that you need a lot of money to get started. This just isn’t true – in fact, many businesses are started with little to no money at all. All you really need is an idea, some passion and drive, and the willingness to work hard. Today, there are countless stories of entrepreneurs who started businesses with nothing more than a laptop and a phone. There are also dozens of financial aid and grant programs that can assist any aspiring young entrepreneur.
6. Financial prosperity is only for the wealthy
Wealth isn’t just for the rich – anyone can achieve financial prosperity if they’re willing to put in the hard work. In fact, there are countless examples of people who have gone from rags to riches, through a combination of smart investing, dedication, and perseverance. It’s important to remember that wealth is relative – what might seem like a lot of money to one person may not be very much at all to another.
7. You have to be born into money to know how to manage it
One of the most common misconceptions about money goals is that you need to be born into a wealthy family in order to understand how to manage it. This isn’t true – in fact, many of the world’s richest people actually started out with nothing. The key to mastering money is through education and experience; there are plenty of resources available both online and in print that can teach you everything you need to know about financial planning.