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The Biggest Misconceptions About Money – Ekvity Ventures LLP – Medium

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The Biggest Misconceptions About Money

We all hear the misconception about from everywhere. Constantly, we’ve been talked to about these misconceptions. These misconceptions are so prevalent that everyone believes them without even thinking. A lie told often, eventually appears to be the truth. Unfortunately, many of the biggest money misconception people believe are usually taken as truth. But we’ll tell you this, no matter how many times you hear them, these money misconceptions bear no resemblance to the truth. This money misconception may sometimes feel like the truth, but they are myths. You know, it’s easy to believe someone else’s opinions about money without ever developing your own.

So, today we want to share and dispel some of those biggest misconceptions about money and spread a little financial hope to those that have believed them for so long.

Following are the biggest misconception about money:

1. You need a lot of money to Start Investing:

We know you have heard this a lot before, but this isn’t true. You surely don’t need a lot of money to start your investing journey. Many people put off investing because they think you need a big pool of money — maybe tens or thousands of dollars to start investing. Many people think investing is complicated, and it is for the wealthy. But as we said earlier, this just isn’t true. You can always begin investing with small amounts of money. You can start investing for as little as Rs. 500 per month. There are many ways for doing this. You can research and know about it.

Investing is not at all complicated. It’s like another game or trick which you need to learn how to play before starting it. Remember, investing even very small amounts can reap big rewards. The key to building wealth is developing good habits. And, if you make investing a habit now, you’ll be in a much stronger financial position down the road.

2. You should always avoid Credit Cards:

You probably would have heard this a lot from your elders, but this is a misconception as well. A credit card can be useful if used wisely. But it can be dangerous too if you don’t make proper use of it and don’t pay your credit card bills on time. One should never avoid a Credit Card. A credit card is similar to a debit card, but unlike debit cards where you make use of your own savings money, using a credit card you take a loan from the bank which you are billed monthly to pay along with the interest. It also provides the window of the flexible payment of 30 to 45 days and gives reward points which you can make use of for shopping and various other things.

A credit card can be very beneficial during emergencies when you are falling short of money. We always recommend to pay your full credit card outstanding amount on time, so this way you will be able to save your money. Remember, a penny saved is a penny earned.

3. Student Loans are always a Good Debt:

This is a misconception. The student loan is not always a good debt. Sometimes it can be a bad debt too. Student loans possess characteristics of both — good debt and bad debt. Student loan debt is what is best described as hybrid debt as it can easily fit into the good and bad debt category.

Federal student loans are considered good debt because they are an investment in the student’s future, enabling substantial increases in the student’s earning potential. Student loans allow you to pursue a college education without having to pay for your entire tuition in full. With a college degree, you improve your chances of finding well-paying, stable employment.

However, for students who plan on entering relatively low-paying careers or take on too much debt, then the debt-to-income ratio can be crushing. Even though a college education can improve your chances of gainful employment, there are no guarantees. Also, if you fail in pursuing your college degree, then student loans can quickly become bad debt.

Which of these biggest misconceptions about the money you have heard before or do you know of any other money misconception, let us know in the comments section below!

About us:

Ekvity Ventures LLP is a leading financial service provider that mainly emphasizes on Tailor-made solutions in the areas of Unlisted/Pre-IPO shares, Wealth Management, Insurance Planning and Mutual Funds.

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