Every era has its myths. In the myths of ancient people, heroes split the sky with stone axes in anger and sank to the bottom of the sea for hidden treasures. In the myths of the 19th century, people believed that progress was inexhaustible and that each discovery brought only good to humanity. In both cases, people were damn mistaken…
Today, we also have many myths that people continue to fervently believe in – even though this belief actually only harms them. For example, regarding the financial sphere of our lives. And this viral online thread, from which we’ve chosen a selection of the most interesting opinions to present to you today, debunks exactly such financial myths.
More info: Reddit
#1
That tax breaks for the wealthy will allow some of their wealth to “trickle down” to us poors.
Something is trickling down on us, but it’s not money.
Image source: JPMoney81, Alexander Grey
#2
Turning down raises because “it means a giant jump in my taxes”.
Image source: USSMarauder, Tima Miroshnichenko
#3
Don’t donate to charities at and big stores that ask for you to round up. They take your money, donate it and then THEY deduct it from their taxes.
Skip the middle man and donate directly.
Image source: DarthLeprechaun, Julia M Cameron
#4
That your employer will be there for you when times are bad. Build a savings. Keep a savings. You are a liability to them, not an asset, and will ditch you the moment they can profit from it.
Image source: islandsimian, maitree rimthong
#5
That you have even the smallest chance of becoming a billionaire. People don’t understand the orders of magnitude difference between even a low level multi-millionaire and a billionaire. At 100 million dollars, you’re still 10 times closer to homelessness than you are to becoming a billionaire. Stop trying to get there. Stop voting for people and policy that promise you that opportunity. The only way these people achieve that wealth is through siphoning it away from everyone else.
Image source: NotAlwaysGifs, jcomp
#6
Dollar stores are generally a worse food value based on size/quantity. Sure it’s $1, but the $2.25 box at the grocery store has 500% more food by weight, therefore is a much better value.
You’re paying a little less to get a lot less.
Image source: Andrew8Everything, Erik Mclean
#7
That immigrants are taking our jerbs!
Like seriously. If every immigrant, legal or otherwise disappeared tomorrow, it wouldn’t do a single positive thing for me personally, much less the wider economy.
Image source: squirtloaf, Maciej Prus
#8
That CEO’s and Owners should get X amount higher salary because they assume all of the risk.
No they don’t. If the company folds they claim bankruptcy (difficult, expensive, long process for normal people, easy for the wealthy who have lawyers on retainer who specialize in it) and go try again. They really don’t have any risk once they hit a certain level.
Image source: Gently_55, Jakub Zerdzicki
#9
Credit cards are bad. If you use them right, you can actually come out ahead.
Get a card with good cash back rewards and use it for everything. I mean everything. If you can pay your rent, bills and insurance with it do it. If you can use it for work and they reimburse you, do it.
Pay the balance off at the end of every month and make sure you keep track of your ins and outs. It requires you to be responsible but in the end its worth it.
I get at least a few thousand dollars a year worth of cash back to do with as I please. Trips, PS5, etc.
Sometimes I use the rewards to pay my balance, and take the funds I had allocated to pay off the balance and put them in my RRSP and take the tax advantage.
Image source: Phlurble, https://www.pexels.com/photo/close-up-photo-of-credit-cards-164501/
#10
The American dream of social mobility/meritocracy prevents voters from addressing extreme inequality. Many think riches await them too or that if you are poor you must be lazy or a a****t etc. and are undeserving of help.
Image source: Heavy_Direction1547, https://unsplash.com/photos/100-us-dollar-bill-BRl69uNXr7g
#11
That lower taxes on wealthy people translate into higher wages or more jobs.
Image source: cwthree
#12
They think that pure talents (including being smart) is the biggest factor to get money flowing in like a river. It is not.
Image source: 542Archiya124, Andrea Piacquadio
#13
“Just save money”
No. You need to do more. Most savings are not beating inflation. As a result your money is shrinking by doing that. One of the most insidious ways our money is effectively being stolen is just by having inflation make it worthless by the time you’ll go to use it.
The easiest thing I am aware of is to put it in an index fund that automatically reinvests. These are automatic funds that follow a set algorithm of stocks (an index) and do not have a human element in the decision making. They regularly outperform professionals. They typically do very well compared to inflation, and require zero maintenance.
Check if your work has a retirement matching program and use that. It’s literally free money and it adds up faster than you think.
There is no such thing as “too soon to start thinking about your retirement”.
Image source: thisremindsmeofbacon, DC Studio
#14
Keeping a balance on your credit card DOES NOT improve your credit score. What it does do, is get you comfortable having a balance on your credit card, which, when it likely gets out of control, is like napalm pouring down on your future financial hopes and dreams.
Image source: withasmackofham, RDNE Stock project
#15
That you deserve something you can’t afford because you work hard.
Deserves has nothing to do with it.
Image source: Ruthless4u, Do Nhu
#16
“If I buy (X), I’ll be happy!”.
Image source: virgilreality, energepic.com
#17
That renting is cheaper than owning because property taxes and insurance
It’s your equity that matters.
Image source: sardoodledom_autism, Ivan Samkov
#18
People not realizing that a tax return is their money to begin with and they should have their deductions set up to break even or owe a little. A lot of people still think it’s some kind of stimulus.
Image source: Eisernes, Leon Dewiwje
#19
Not investing back into yourself.
Investing doesn’t always have to be some major cash return. It could be education, making your life easier so you have more time and energy, or simply relaxing. I know a lot of people that played the frugal game and just now getting out in their 70s.
Image source: Sabre_One, Unseen Studio
#20
That only rich people invest.
I hear it over and over again. It’s just not true at all. Someone can spend like an hour of their time and watch a couple fo Youtube finance videos and understand the basics.
They can open a brokerage with very little money (Like $100), They can then set up automatic deposits that follow them for their entire career, investing in their own financial security.
Image source: Displaced_in_Space, Sortter
#21
Buying a house is ALWAYS the right move.
Image source: Maximum-Check-6564, RDNE Stock project
#22
Prices never go down it doesn’t matter if the entire price structure gets resolved downstream to lower a lot they don’t have to lower the price because they think no one else does so the price will never go down ever.
Image source: Far_Investigator9251, Markus Winkler
#23
Maybe not a myth, but a perception that you *must* have 20% down for a house.
You obviously need to calculate what you can realistically afford month to month, but most mortgages accept *way* less down. You will pay some PMI but again, don’t let the 20% perception stop you before you even look.
Image source: redyellowblue5031, Alena Darmel
#24
I know people who refuse to invest in stocks because they are “too risky”. In the short-term this is true (e.g. less than about 5 years), but not putting retirement or other long-term savings in stocks severely limits your ability to get returns on your savings.
Over a 30 year period the lowest annual return for the S&P 500 since 1926 was 7.8%, which is much more than you could expect from “safe” investments like treasuries.
One important caveat is that this refers to the total stock market (e.g. using an index fund, ETF, or total market mutual fund). Picking individual stocks is generally a bad idea for long-term savings.
Image source: itijara, Anna Nekrashevich
#25
“The stock market is just like gambling”
You are never going to accumulate enough money to retire without using the stock market. The market has always gone up in the long term. If it stops going up in the long term, society would be in pretty bad shape and your money probably wouldn’t be worth anything anyway.
Image source: mdthornb1, Tyler Prahm
#26
That hard work will lead to wealth.
This simply is not correct for the vast, vast majority of workers (read: anyone not C-level).
The truth is that the US is a shareholder economy, not a labor economy. Meaning that even if someone is getting regular raises, they’re likely barely keeping ahead of inflation. If someone isn’t investing in the market right now, then they aren’t actually seeing their cut of the economy’s increases in employee productivity. If they aren’t investing in the market, then they’re probably going to end up working paycheck to paycheck until they die, assuming Social Security doesn’t provide them enough to live off of or stops existing sometime between now and when they retire.
Image source: Heffe3737, Adil Alimbetov
#27
Money is not a long term store of value. It is a medium of exchange. Don’t keep “money”, spend it on appreciating assets and keep those instead.
Image source: pab_guy, https://unsplash.com/photos/brown-wooden-house-with-green-grass-field-Bkp3gLygyeA
#28
Car stuff:
You need a new car when your current car gets to 100,000 miles.
You need to fix everything that breaks on your car.
Buying used cars is bad because all your doing is buying someone else’s problems.
Foreign cars are inferior to domestic cars.
Image source: Anon, Benhur Emmanuel
#29
People voting thinking the president singlehandedly controls the economy.
Image source: athejack, Tara Winstead
#30
The expectation of living on your own so most of their money goes to rent or mortgage instead of investing.
Image source: Bjartdauth, Jakub Zerdzicki
#31
Paying interest will help increase your credit score.
Image source: fasterbrew
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