Myth 1: Earning more money is a sign of success
Reality: Just earning money will not create wealth, specially so if you continue to increase your expenses. Saving, investing and having sources of passive income is more important to create wealth in the long term.
Myth 2: Bank FDs and Gold are best investments
Reality: Bank FDs are insured only upto ₹5 lakhs only and Gold is as volatile as any other asset. Moreover, historical returns from these haven’t been able to beat inflation in long-term.
Myth 3: Taking Loans is bad for wealth creation
Reality: Not all loans are bad, it’s about how you use them: Whether to create assets that generate positive cash flows and returns sufficient to pay off the loans and beat inflation or for the things that depreciate in value or generate negative cash flows.
Myth 4: I do not need insurance
Reality: Insurance is needed by every person for covering the risks of life & assets and also to save you from losses in case of unexpected events
Myth 5: Only Rich can invest
Reality: To start investing you don’t have to be rich and investment can start with even ₹1000 and you can always increase the size of your investment as your income grows.
Myth 6: Buying a house is better than renting
Reality: Owning a house gives the satisfaction of fulfilling a life goal. However, sometimes it’s more of an emotional decision than a rational one. Like, at the starting of a career, or staying for short durations in a place, renting is more sensible. Also, rental yields are generally in the range of 2-2.5% only.
Myth 7: Retirement planning is not necessary before 40
Reality: One must start planning for retirement as soon as you start earning. By starting early you will be able to utilise the power of compounding to build a larger corpus and can even retire earlier.
Share the myth in the comments that you have noticed people following.