FinancesMyths debunked

These believes about finances are harmful for your finances

Just like any sphere of life has its own stereotypes, the world of finances has its own false believes. Unfortunately, there are enough people having such an attitude towards their own money which does not allow them to get more profits and sometimes even makes them lose their money. Read this article if you want to get the most of what you already have.

The best way to become rich is saving money

One of the false believes about money which is particularly loved by people concerned about their finances is that in order to become wealthy one has to save money.

Saving money can be different. If you are just good at managing your income and are capable of saving a part of it without making your life rather miserable resigning from all possible pleasures or even necessities, it is definitely a positive approach of money. Providing your income is rather modest and it really difficult for you to save some money without serious losses in other parts of your life or you are thus much into saving even though your financial situation is not bad at all, saving is not necessarily a good thing. Certainly, in such a situation it is difficult to call it a way to becoming wealthy if one’s wealth has been acquired from resigning from all possible needs.

Still, no matter what your personal attitude to saving money is, it is crucial to understand saving money is not a good financial strategy. If money is just stored without letting it generate profit, one is risking to lose it with inflation which is present almost in any country.

It is a very poor decision to simply keep your money without any work. Even the simplest investing methods such as choosing a special bank account for savings, despite its small interest rate, will at least help you to protect your money from inflation which will certainly affect the funds if they are kept at home.

Investing is good only for people with great funds

Obviously, the amount of money a person can earn by investment is always directly connected to the size of initial funds he or she has. This means that the less money one can invest, the less the person will be able to get back. Any financial plans promising to boost the initial sum of money up to several times are usually scamming systems which will initially lead to a collapse. Still, there are more trustworthy options for such investment, for example, such as purchasing stocks of start-up companies, a number of which finally turns out to be pretty profitable, one some of them even have a terrific success.

Anyway, considering all of these facts, it is important to understand that investment is available for people with different financial opportunities. Even though for a small initial amount of money invested there will be small income, you can still count on it and it is still better than resigning from investment altogether. Finally, the more profits you will be able to generate in such a way, the more you will be able to invest the next time.

Do not wait to become rich in order to be able to invest your money.

Cashback is just a way banks are tricking people to spend more money

For some people, cashback is indeed just a financial trick as having an opportunity to receive a particular amount of money back after purchases pushes them into spending more money than they really need. Still, such individuals also experience the same effect when seeing various discounts in the shops.

Still, if a person has proper understanding of a particular cashback system available for his bank account, he or she can plan the purchases in a way which will actually help to get back an amount money without increasing the size of expenses. It is sensible to choose a cashback programme according to your own needs whether you would like to receive real money to your bank account or as points which can be spent in the supermarket you usually go for groceries to.