Exposing 5 Common Money Myths
This article is an adapted transcript of the video available on our LIFE180 YouTube channel.
Have you ever been told things about money that just don't add up? Today, I’m here to debunk five common money myths that may be hindering your journey to true financial freedom. Our goal is to help you take control of your financial life by cutting through the myths and misinformation that surround money.
Today, we're going to discuss the five most common money myths that you’ve likely heard and perhaps even believed, which could be preventing you from building true wealth. We’ll cover myths related to debt, investing, retirement, and much more. So stick around and let’s dive in!
Myth 1 - Stay Out Of Debt
We’ve all heard the advice: stay out of debt. It’s one of the most common pieces of financial guidance people receive, and I often coach individuals to avoid most types of debt. However, it's important to recognize that not all debt is created equal.
There’s a significant difference between bad debt and good debt. Bad debt, such as high-interest credit card debt, can severely drain your finances. In contrast, good debt, like a mortgage on an investment property or a loan used to grow your business, can actually help you build wealth. This approach is known as strategic debt.
Imagine this: you borrow money to invest in real estate. You have a tenant paying rent, and over time, the property appreciates in value. This is what we refer to as leveraging debt to build wealth.
Now, when you compare that to accumulating credit card debt to buy things you don't need, essentially consuming, that's the kind of debt that can bury you. I hope you can see the clear difference.
Myth 2 - The Stock Market Is The Best Place To Build Wealth
You’ve probably been told that the stock market is the key to long-term wealth creation. While it can be an effective tool for building wealth, it’s not the only avenue, and it’s not necessarily the safest one.
The reality is that the stock market is unpredictable and volatile. One year, your portfolio might grow by 10%, but the next year, it could drop by 20% or more. Relying solely on the stock market for wealth building subjects you to a financial roller coaster ride that you’ll likely want to avoid.
I love to coach people on the fact that there are more stable and controllable ways to build wealth. Real estate investing provides greater control over your assets, while whole life insurance offers guaranteed growth without market volatility.
By combining strategies like these with the stock market, you can create a more balanced and secure path to financial freedom, which is ultimately what you’re after.
Myth 3 - You Need To Be Rich To Invest
It’s easy to think that investing is only for the wealthy, and many believe you need a substantial amount of money to get started. However, that’s simply not the case. The truth is, you don’t need to be rich to invest; you just need to be consistent.
Small and regular investments that compound over time can lead to significant growth. For example, if you invest just $100 a month in an account that earns 6 to 7% per year, over 20 to 30 years, that can grow into tens of thousands of dollars. The key isn't about being wealthy; it's about starting small, staying consistent, and building on your investments over time.
Myth 4 - Life Insurance Is Only For A Death Benefit
When most people hear "life insurance," they often think it's solely for after you're gone, a payout to your loved ones, for instance. While that's true, it's only part of the story, especially regarding whole life insurance.
Whole life insurance is much more than just a death benefit; it can serve as a powerful wealth-building tool that you can utilize while you’re alive. Whole life insurance policies accumulate cash value over time, which you can borrow against to invest in other assets like real estate or businesses, or use for major life expenses and emergencies.
I’ve seen people leverage the cash value of their whole life insurance policies to fund real estate investments, and then use the returns from those investments to generate even more wealth. It's like having your money work in two places at once: growing in your policy while also appreciating in the real estate market. That’s financial efficiency and safe leverage at its finest.
Myth 5 - Retirement Means Stop Working
Most people think that retirement simply means quitting your job and living off your savings or 401(k). However, true financial freedom encompasses so much more than just stopping work.
Retirement doesn’t have to mean quitting work; it means having the financial freedom to choose whether you want to work or not. It’s about generating enough passive income from investments, whether that’s from real estate, businesses, cash flow from life insurance policies, or dividend-paying stocks; so that you’re no longer reliant on a paycheck.
You can spend your time doing what you love, whether that’s working on passion projects, spending time with family, playing golf, or simply enjoying life. I know people who have built enough passive income through smart investments that they continue working, not out of necessity, but because they genuinely want to.
That’s the kind of financial freedom that retirement should be about: having the choice. When you’re not compelled to work, you often find that you enjoy it much more.
These five money myths are preventing too many people from achieving true financial freedom: debt isn’t always bad, it can be leveraged to build wealth; the stock market isn’t the only way to grow your money; you don’t need to be wealthy to invest; and life insurance is much more than just a death benefit.
Lastly, true retirement isn’t just about quitting your job; it’s about creating the freedom to live life on your terms. Now that you understand the truth behind these myths, it’s time to take control of your financial future.
If you’re ready to learn more about building wealth and living intentionally, be sure to hit the subscribe button on our LIFE180 YouTube channel and check out my other videos.
Be sure to set up a clarity call using the link below if you’d like to connect with us here at LIFE180. If you found this video valuable, don’t forget to share it! Also, explore the links below for more tips and tools to help you build the life you want.
Until the next article, have a blessed inspirational day.
