The other day as I was driving home from work, I was listening to talk-radio and reporters gossip about the day’s events. I couldn’t help but laugh and think of an old game my cousins and I played when we were young. Remember the old “telephone game”; the classic ice breaker and party game? Someone whispers something in your ear and you pass it on to the next, and then by the time it gets around the entire circle of people the last person has to shout the message to the entire group. And you can bet your bottom dollar that every time the message was announced it was completely different than the original!
Just like the fun “telephone game”, any message including money and personal finance can get misconstrued. Check out these 5 money myths that I have to break to you!
1. A Home is an Investment: Although purchasing a home is an investment with the amount of money that you’ve put towards it in renovations and your mortgage payments, the fact is that nobody can predict how the housing market is going to perform. The value of a home can fluctuate dramatically. So before you purchase a new home, it’s best to figure out if this is going to be a long term or short term home.
2. It’s Better to Use Cash: Paying for certain items in cash is definitely a great option. But if you’re not in credit card debt and can secure a low interest rate, then it’s ok to use your credit card. Why? Because the perks that come along with a credit card can be quite rewarding. Certain credit cards offer 5% cash back on purchases at specific locations or by spending a particular amount in a set time frame. Just be careful not to go overboard and don’t think a simple swipe of plastic still isn’t your heard earned money.
3. Money-in-the-Mattress: This was very common in The Great Depression Era and still holds true even today in Greece. Due to the banks collapsing and stock market plummeting, it was safer to “put it in the mattress” rather than in the bank. If you leave your money under the mattress it might be safe, but unfortunately, that money doesn’t have any opportunity to grow. Keeping some of those Benjamin Franklins in the mattress in case of an emergency is a good idea, just not all of it.
4. You Only Need a Will: Having a Will is an absolute must for everyone, hands down. But depending on the amount of assets and property you have a Trust might be better suited. If a Trust is written properly, you can avoid probate on your assets, control what happens to your property after you’re gone and plan for the possibility if you’re incapacitated.
5. I Can Do it Myself: You might be a “do it yourself-er”, financially savvy and pay attention to the stock market. But it’s always a good idea to seek professional advice. Think about it this way, if you’re not a plumber would you take on a project such as replacing your pipes? Hopefully not, because it could be even a bigger problem in the future. I’m here to guide you so give me a call anytime you have questions on your next “money-move.”
So now that you’re wiser beyond words about these money myths, what do you think? Don’t get caught up in the “telephone game” and do some extra research or give me a call and we’ll chat about it. Don’t let all the T.V. financial gurus get you hyped up and the way the media twists things clutter your head. You’ve worked so hard to get where you are and I would be proud to be able to help you continue to reach your financial goals.