West Palm Beach, FL – Ever since we were children, we’ve heard and repeated familiar sayings about money. One favorite of parents everywhere is, “Money doesn’t grow on trees.” But what if it turned out that most of the conventional wisdom about money wasn’t true, at least wasn’t helpful? For instance, while it’s literally true that money doesn’t grow on trees, that saying can lead us to believe in scarcity rather than abundance—so scarcity is what we end up with! Here are three other equally destructive money myths:
- A penny saved is a penny earned. While saving and investing is an essential part of any financial plan, it’s not enough to make you rich. You have to focus on the “earning” part of that saying. With most current salaries, there’s no way we can save our way to wealth. So we need to find ways to increase our earning power, by taking extra training, becoming an entrepreneur, having both spouses work, investing in revenue property, etc.
- There’s no better place for your money than a bank. This may have been true for our parents or grandparents when savings accounts were earning as much as 10-15%. But with today’s interest rates hovering near zero — actually below the inflation rate — putting your money in a bank account is like throwing much of it away.
- Your home is your best investment. The fact is your home is a place to live. By thinking of homes as investments that you can buy and sell to make money, you’re putting yourself and your family at financial risk. Housing bubbles can burst, unexpected maintenance bills can be huge, closing costs and Realtor fees add up fast, and property taxes just keep rising. The best approach is buying an affordable house you actually want to live in, then as money becomes available for investment, buy rental properties that generate income and tax deductions.
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