Having the power of knowledge at our fingertips has proven itself to be beneficial in many situations countless times before. However, with that great power that the internet brings us, there are also those mischievous trolls spreading misinformation whether they realise it or not. Additionally, contents that are outdated and taken out of context also make it harder for users of the internet to recognise and differentiate useful information from worthless ones.
In the journey of making a positive change in our lives, especially on the financial side, requires more study and in-depth research rather than just blindly believing all those false claims available online that aim to mislead instead of raise awareness.
With that, here are a few myths most common in the financial world that we, as a society, need to stop believing in to improve financially.
Financial Myth #1: All contracts are standard
There is no bigger lie in the financial industry than this statement that you might have heard many times before. Bank officers or agents might have rushed their clients from reading the agreement in detail by claiming that all contracts are standard. Even if that was the case, nobody should sign any official documents without reading through them properly.
Not many will question what standard documents entail, especially first timers or newbies that are nervous while dealing with corporate people. Sadly, many of these people listen to the ones who tell them to skip the fine print and just sign the documents. This will be detrimental to the signee who ends up signing off on things they don’t really want or understand in the first place.
Financial Myth #2: Young people don’t need to worry about their credit scores
Now, to those of you that are currently finishing up your degree or just starting your first job, adulthood may seem exciting at first. Breaking out from your comfort zone and growing as your own person may seem overdue at this point in your life, however, there will come a time for you to take out your first loan, whether to finance your new house, new car, insurance payments, or others.
This is the best point in your life to start building up that credit score of yours. Should you pay your bills as soon as possible, you will be able to establish a great track record thus increasing your credit score.
The earlier you start this behaviour of on-time payments, the more prepared you will be in the later stages of your life where you are looking to make bigger financial decisions like applying for a loan for your first house. By the time this happens, your credit score will be through the roof and simultaneously increasing the chances of getting your loans approved by the bank.
Financial Myth #3: Investing is only for rich people
Back in those days, this statement could be true. Investment costs used to be so great that if you invest only a small amount, all of it will go to your broker. However, nowadays, opening an investment account is literally free and doesn’t require a lot of money when starting. The commissions that you pay are also not as glaring as it was years ago due to the technological advancements that we have these days.
Truth be told, every working class individual should start their investments in discretionary funds. This is because compound interests have the power to bring the assets of someone with a net worth of 5 figures and to 7 figures.