Finance is one of the broadest topics that can be discussed. Even so, there are many statements that have been passed around that, despite their reach, couldn't be further from the truth. There exists a bevy of myths about finance, as the likes of Robert Jain can attest, which is why it's in your best interest to read up. For those that would like to learn more about this topic, here are 4 myths that you can start with.
"When making a purchase, always use cash." If you think that cash is the way to go for every purchase, you'd be mistaken. As a matter of fact, many people only use it for emergencies. It can be argued that certain credit cards are better, particularly those that offer rewards over the course of time. You'd be amazed by the number of frequent flyer miles people rack up over the years. This is just one example that names like Bob Jain can tell you about.
"Only those that are wealthy can invest." While having a sizable bank account certainly helps, it's not a requirement for investing money. In fact, it's entirely possible to take a small amount from your weekly or biweekly paycheck, placing it in a separate account for the future. While it may take time to build, you'll be amazed by what you've accumulated by the end. Don't assume that investing is only limited to the wealthy.
"I'm too young to begin saving money for retirement." With this mindset, you'll be less likely to save what you need for a comfortable retirement. The general rule to consider is that the sooner you start saving, the better. For example, if you land a full-time job at age 26, this is when you should begin saving, as you are likely to have the means to do so. By saving early in your life, you will ultimately end up an amount that you can be comfortable living off of.
"Since I'm financially secure, an emergency fund is unnecessary." You should think again, as emergencies can occur at any moment. For instance, if you work a physically-taxing job and you pull a muscle in your shoulder, you're going to need time to rehab the injury. An emergency fund may help you cover certain costs. Furthermore, you won't be entirely out of luck if you're out of the workplace for an extended length of time. "Better safe than sorry" is a term that's made for this type of fund.
"When making a purchase, always use cash." If you think that cash is the way to go for every purchase, you'd be mistaken. As a matter of fact, many people only use it for emergencies. It can be argued that certain credit cards are better, particularly those that offer rewards over the course of time. You'd be amazed by the number of frequent flyer miles people rack up over the years. This is just one example that names like Bob Jain can tell you about.
"Only those that are wealthy can invest." While having a sizable bank account certainly helps, it's not a requirement for investing money. In fact, it's entirely possible to take a small amount from your weekly or biweekly paycheck, placing it in a separate account for the future. While it may take time to build, you'll be amazed by what you've accumulated by the end. Don't assume that investing is only limited to the wealthy.
"I'm too young to begin saving money for retirement." With this mindset, you'll be less likely to save what you need for a comfortable retirement. The general rule to consider is that the sooner you start saving, the better. For example, if you land a full-time job at age 26, this is when you should begin saving, as you are likely to have the means to do so. By saving early in your life, you will ultimately end up an amount that you can be comfortable living off of.
"Since I'm financially secure, an emergency fund is unnecessary." You should think again, as emergencies can occur at any moment. For instance, if you work a physically-taxing job and you pull a muscle in your shoulder, you're going to need time to rehab the injury. An emergency fund may help you cover certain costs. Furthermore, you won't be entirely out of luck if you're out of the workplace for an extended length of time. "Better safe than sorry" is a term that's made for this type of fund.