6 Financial Myths that Destroy our Prosperity

financial myths

When it comes to financial literacy, only few people want to take it seriously. This topic is also not discussed in schools and colleges but its significance can’t be avoided for a long time. Sooner or later, it will come into the frame of our financial condition and our quality of life. All the wrong perceptions related to money come under the realm of financial myths. We rarely try to question the financial concepts we believe in and follow.

A first critical step to overcome such financial myths is to accept that what we thought to be true may be completely false. And the second step is to ask a question from ourselves – Why do we struggle if we already have so many information on how to become wealthy? This happens because of our wrong perceptions about money from a young age. The financial myths that we absorb from our parents and community are also supported by society. Most people have good intentions but their advice also relies on various financial myths.

The difficulty is in exploring the myths that are resisting your progress. So, the best way to overcome these financial myths is by going through some of the most common ones:

Budgeting & Saving

Both budgeting and saving your money are the first steps towards strengthening your financial condition. Once you understand the importance of saving, you will stop yourself from wasting money and buying doodads. But there is a relevant time for both of these activities. If these practices become permanent fixture in your financial life, then it will obstruct you from going to the next level. By making it a permanent fixture, you’re stopping yourself from frequent exchange of values in the name of saving money. Once you have enough financial literacy, you will need to grow and upgrade your decisions.

The people who believe on strict budgets rarely think about the ways to increase the size of their budget. They think about control rather than freedom. In reality, it is more important that you know how to invest your money in different dimensions instead of just earning or saving it.

Concept of budgeting and saving can easily produce the feeling of distrust and jealousy. These are philosophies of misguided hope that someday it will all work out and you’ll somehow be rich. Budgeting not only invites scarcity, it also fails to classify expenses. People can be fearful because of the emotion behind the word “budget”. There is a need to unlock the abundance mindset through which we learn to enjoy the present moment. We should be always in a pursuit of different way of being, of creating a different mindset that allows us to be more productive.

Accumulation of Money

Accumulation is another dimension of financial myths that we follow. It distracts us from any effort to create value and hence less value creation kills our ability to create wealth.

Accumulation is also an intimidating word. It can lead to frustration. It requires time and mental energy that can be spent doing more productive things. It requires us to stop thinking and allowing external circumstances to dictate our success. Those who live under this myth routinely hand over their money to so-called advisors and hope that everything will turn out well. They fail to take responsibility of their own productivity and fail to recognize their passion.

Accumulation theory puts more emphasis on cutting expenses to increase our bank balance instead of increasing productivity. It resists us from seeing the unlimited possibilities that surround us. So, it’s better to emphasize on value based spending opposed to budgeting and accumulation. This can only happen through the powerful concept of exchange of value. Exchanging values in terms of goods and services creates wealth for everyone. The way for you to get what you want is to give others what they want; to make yourself valuable to others.

We have to take responsibility and utilize our assets now to create value for ourselves and others. Achieving true financial freedom requires courage and boldness. It requires that we follow our passion instead of following such financial myths. It’s about the power and abundance of money, and not the fear of losing it. You should not focus on the fear of spending too much. Instead, you must pay attention to create more value and increase productivity.

Financial Security

Every illusion associated with money comes under the category of financial security. It’s all about the steady paychecks and benefits that we hold. The concept of budgeting, saving and accumulation written above is also a great example of this illusion. Whether we think about security of our job or other personal resources, a mindset of scarcity is ingrained in us that do not allow us to think abundantly.

The pursuit of false security leads to confining our responsibility to produce value. Whenever we think that security comes from outside of ourselves, we feel entitled to those external resources and don’t take responsibility. This type of mentality also transfers to the corporate world. Employees who stay in positions because of fear of loss and desire for benefits never produce great value in the world. Those who feel that they are entitled to benefits are the ones who focus far less on how they can serve and far more on what they receive. They strive to provide the least amount of value possible in exchange for the greatest amount of benefits.

This mentality is destructive because it resists us from making ourselves more valuable and limits our potential through selfishness. As long as we are concerned with getting than giving, we will never find our passion or soul purpose. And consequently, we will never receive the fullest of our potential and productivity. True financial security does not come from the government or corporations, it comes from within us. We can only achieve real security by pursuing freedom, as difficult as it may be.

Pay Yourself Last

What we use to do when we get the salary or paycheck? Most of us spent the money firstly on paying different bills and rent. Then we save or invest the money left with us, which seems to be a very little amount because of this wrong approach. We should put aside a fixed percentage of each payment we receive and pay the first bill to ourselves. We should spend that amount on ourselves in terms of investment and personal growth.

What difference does this strategy makes? You will eventually realize that by paying yourself first, you are adapting a habit of your self-development on priority basis. And the pressure of various rent, bill and taxes that generates after paying yourself first; forces you to seek some other forms of income. That pressure can also become your motivation. That pressure will insist you to work harder and makes you smarter, active and agile when it comes to money. If you had paid yourself last, you would have felt no pressure but you might be broke.

Game of Numbers

The education industry and our society have trained us to make decisions based on numbers. When we were in school or colleges, these numbers are based on the marks that we have got in various subjects. And now when we are in some organization, these numbers are related to salary and incentives that is credited in our bank account every month. So the two words that dictate the major portion of our life are “Salary Package”. Most of the things including our education or professions that we choose are dependent on these words. Money is often perceived as the scorecard of our life.

We never use to think about our passion and soul purpose of our life while making decisions. But a major percentage of the battle to create wealth is simply learning to look and see what most people don’t see. It’s learning to see beyond numbers and to view our finances on macro level. Since happiness can’t be quantified, it’s ridiculous to base our decisions on hypothetical numbers. If we focus on happiness first, the money we need will naturally follow.

The financial myth that prosperity can be quantified by math destroys our potential, ability of value creation and creative thinking. It obstructs us from considering the unseen factors in our financial decisions. It causes people to work for money and to pursue number on their bank balance instead of creating value. The illusion that numbers define prosperity is based on ignorance of this truth.

Root of All Evil

We all have hear this statement so many times that “Money is the root of all evil” by various peoples. All the religions have been against money because money can give you all that can be purchased in life. Money is a byproduct of value creation, a way to represent value that helps in economic transactions.

Money is a scientific way of exchanging things. It is one of the greatest inventions of human being. Before money come into existence, people were in real difficulty. All over the world there was a barter system. Money did a great service to humanity by making people capable of purchasing and selling.

To create wealth is not an easy job. I respect money. Only idiots have been condemning it; perhaps they were jealous that others have money and they don’t. The importance of exchange of value with the movement of money should be understood. The more money moves, the more money you have. That’s why it is called currency-it should be in current. Money is a tremendous invention. It is a tool that can provide you your dreams, your freedom and control of your life. Money makes people richer; it makes people capable of having things that they don’t have.

One should be willing to drop all the ideas that have been imposed on him about money. Be respectful to it. Create wealth, because only after creating wealth do many other dimensions open for you. Myths and false information keep us away from learning the natural rules of wealth and prosperity.

We can only overcome these financial myths by understanding and learning about it from ourselves. If we can prepare ourselves to question and overcome these financial myths, we can be infinitely prosperous.

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2 Responses

  1. This is an eye opening article Harinder.

    You are right that we are not taught how to deal with money in schools.

    Thanks for this thought provoking information.

  2. Arpit says:

    Superb Content with lots of value

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