If you’re not getting ahead financially, it may not be due to the Nigerian economy, as many people have laid their financial woes on the status of the country’s economy. It may also not be due to your boss or any other external factor. It could be that you’re the one hindering your progress—simply because you believe a host of money myths and economic lies.
Money beliefs are extremely powerful because they guide your thoughts and actions, including those actions that you need to take but fail to initiate because of various misconceptions. To take your finances to the next level, here are 5 money myths you need to dispel immediately.
1. Higher price means higher quality
More expensive items are not always of greater quality. For example, Nigerian ladies would always regard Brazilian weaves to be more quality than all other because of their cost. But really, all other weaves are just as beneficial as their Brazilian counterparts.
Don’t be carried away by brand name. When determining an item’s value, look beyond the price and examine the true value to you. Does that generic brand pain reliever help your aching back? Don’t be so sure that paying extra is really getting you something extra. Spend your money wisely.
2. Investing is risky
Sure, the prospect of losing money scary. However, letting fear dictate your money decisions is even scarier. Why? The truth about money is that savings accounts actually shrink the amount of money you have. The 1% yearly interest rate that a savings account carries loses out to the usual 3% inflation rate; your savings grow slower than the cost of things.
While it’s a good habit to save money, you’d have to go beyond saving if you want to grow your funds. Money myths that encourage fear of risk can prevent you from exploring ways to actually grow what you have. It’s wiser to explore investment plans that let you beat the inflation rate.
3. You need a lot of money to start investing
Are you earning more than you were three years ago? Are you saving or investing significantly more? Most people answer this question in the negative. This shows us something. We lie to ourselves when we peg saving and investing to having enough money.
Enough simply never comes. Sometimes we hold this magical number in our heads. We tell ourselves once I have N100, 0000 or N200, 000 or N1 million, then I will invest. In reality, the best investment for you is the one you can do today. Waiting to have more is simply a way of procrastinating and/or keeping us in our usual comfortable routine.
4. If I just earned more…
This is a popular misconception and one that many of us buy into when we’re struggling financially or haven’t made the progress we’d like to see. The myth essentially boils down to this line of thinking: “If I just had a little more cash, then most of my problems (or all of them) would go away.”
No matter how much money you make, if you don’t control your spending, you’ll never achieve financial security. There are numerous instances of extremely well-paid people going broke, proving that how much money you make is far less important than what you do with that money.
5. Owning a home is a guaranteed investment strategy
In case you didn’t know, as with other investments, home ownership carries a risk that your investment may decrease in value. In many areas, housing prices are still below the levels seen during the bubble years. Then, there are the increasing costs of property tax and maintenance.
This doesn’t mean you shouldn’t own a home. Just be aware that your house shouldn’t be looked at as an investment opportunity.
Which money myth have you been holding to? Tell us in the comments!