Many of the things we hear and tell ourselves about money come from a good place, but they can actually point us in the wrong direction.
Some of them are rooted in misconceptions or outdated practices and – some of them are even misplaced trust in our own financial habits.
It’s time to make some changes. These are some of the biggest lies we hear about money all the time, but the truth will set you free.
Lie #1: You should never be in debt
Does it push you forward or pull you back?
There is little middle ground when it comes to taking on debt. If you’re using a loan or line of credit as a stopgap, that debt will start eating into your budget as soon as your lender starts charging you interest.
However, long-term debt can actually help you move forward in life. For example, student loans are generally considered worthwhile because an investment in your education can pay off through career advancement.
There are many healthy use cases for getting into debt. In fact, here are 4 times when it’s normal to get into debt.
Lie #2: You need a lot of extra money to start investing
You have been warned that this is a gamble. Stocks are expensive. And it takes forever for the average person to make money investing.
There is some truth in this, but again it has been twisted.
While coveted stocks like Apple and Netflix will cost you hundreds of dollars per share, you can buy fractions of those stocks and still get in on the action.
You probably won’t get rich quick investing, but it’s a reliable way to grow your money much faster than a regular savings account. Because despite the months and years of decline, the markets continue to grow over the long term.
Investing doesn’t require you to throw thousands of dollars at full stocks. In fact, you can start with as little as $1.*
We love Stash because it lets you choose from hundreds of stocks and funds to create your own investment portfolio. But it keeps things simple by breaking it down into categories based on your personal goals. Do you want to invest prudently now? Totally understood! Do you want to dive with moderate or aggressive risk? Do what you feel.
Plus, with Stash, you can invest in fractional shares, which means you can invest in funds you wouldn’t normally be able to afford.
If you sign up now (it takes two minutes), Stash will give you $5 after adding $5 to your investment account. Subscription plans start at $1 per month.**
Lie #3: Credit cards will get you through tough times
Besides missing payments, having a large balance is one of the worst things you can do with a credit card.
There’s no law against getting out of an emergency with a credit card, but it’s so easy to get into more debt if you do.
An emergency fund can help you get through the tough times. But instead of paying interest on your emergency expenses like you would with a credit card, you could actually be earning interest on the rest of the money in your savings account.
It’s true, you won’t earn much interest with a regular savings account. But a debit card called Aspiration lets you earn up to 83 times the normal national interest rate on your savings balance.
Enter your email address here to get a free Aspiration Spend and Save account. After confirming your email, securely link your bank account so they can start helping you get extra money. Your money is FDIC insured, and they use military-grade encryption – which is nerd language for “it’s completely safe”.
Lie #4: It is better to buy a house than to rent
It’s the truth. But this particular truth is usually twisted out of context, so much so that it becomes false in many situations.
When you buy a home, more of your housing expenses are invested in your needs and you build equity. Unlike mortgage payments, rent payments only enrich someone else.
However, there are good times and bad times for buying a home. And if inflated house prices make it a bad time to buy, you could end up paying a lot more for your dream home than if you had rented it a little longer. Not to mention that depending on your specific needs and lifestyle, renting might be the most sensible option.
Lie #5: Only the rich can invest in real estate
Take a look at some of the richest people in the world. What do they have in common? Many invest in large private real estate transactions. And here’s the thing: there’s no reason you can’t too – for as little as $10.
A company called Fundrise gets you started in the world of real estate by giving you access to a diverse, low-cost portfolio of private real estate. The best part? You don’t have to be the owner. Fundrise does all the heavy lifting.
Fundrise’s starter portfolio has a minimum of just $10 and is aimed at new real estate investors. Your money will be invested in the company’s Flagship Fund, which already owns more than $250 million in real estate across the country, from apartment complexes to the booming housing rental market to the biggest logistics centers of commerce. last mile electronics.
Want to invest more? Fundrise offers a variety of account levels and features to meet the needs of every type of investor. Once invested, you can track your performance on Fundrise’s website and mobile app, and observe the acquisition, improvement and operation of properties. As tenants pay their rent, you could earn money through the payment of quarterly dividends, and over time, you could earn money through the potential appreciation of the property. Since 2014, Fundrise investors have earned around $100 million in dividends alone.
So, if you want to get started in the world of real estate investing, it will only take you a few minutes to register and create an account with Fundrise.
Lie #6 I have enough money. I don’t need a budget
It’s like the difference between grocery shopping with and without a list. You can enter whatever you need. But what are the chances of you overspending or forgetting something you really need?
Budgets help you spend and save efficiently, so you don’t overspend or forget to leave enough money to pay for something you really need.
Need help choosing a budgeting app? Here is our list of the 8 best budgeting apps.
Lie #7: Only the rich leave money to their family
Perhaps your children won’t meet one day while a lawyer reads the many luxuries of your vast estate that you bequeathed to them in your will. But you can at least make sure your family doesn’t have to go into massive debt when you’re gone.
You insure the rest of your life, so why not cover your life itself? You don’t have to be wealthy to leave money for your family to replace some of the income they would lose in your absence.
You’re probably thinking: I don’t have the time or the money for that. But your application can take minutes — and, if approved, you could leave $1 million to your family by spending a low monthly fee on term life insurance from a company called Bestow.
The peace of mind of knowing your family is being taken care of is priceless.
If you’re under 54 and want a quick life insurance quote without a medical exam or even getting off the couch, get a free quote from Bestow.
*For securities priced above $1,000, purchasing fractional shares starts at $0.05.
**You will also bear standard fees and expenses reflected in the ETF pricing on your account, as well as fees for various ancillary services charged by Stash and the Custodian.
Paid non-customer endorsement. See reviews on the Apple App Store and Google Play. See important disclosures. Investment advisory services offered by Stash Investments LLC, an SEC-registered investment adviser. This material has been distributed for informational and educational purposes only and is not intended to be used as investment, legal, accounting or tax advice. Investing involves risk.
*Past performance does not represent future results. Publicly filed offering circulars of Rise Companies Corp. sponsored issuers, not all of which are currently qualified by the Securities and Exchange Commission, may be viewed at www.fundrise.com/oc.