ignore these money myths to get rich

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MYTHS about money are one of the biggest barriers stopping Australians from improving their wealth.

Whether it’s waiting for markets to crash or worrying that all the great investment ideas have already happened, longstanding ideas about money need to change, financial planners say.

“They are often ingrained in someone’s thinking throughout their lifetime,” said author and certified financial planner Patrick Canion.

“It comes from either their parents, grandparents or their children, and people often aren’t aware that they believe in these things,” he said.

WEALTH: Wisdom from the world’s richest people

“The foundation of becoming rich is spending less than you earn and making sure you do something constructive with the difference.”

So let’s bust some
money myths.

1. I’LL HAVE TO WIN LOTTO TO GET RICH

“Winning the lottery isn’t a plan — it’s a one-in-45-million fluke,” Mr Canion writes in a new book More than Money.

“You deserve to have a plan, not an unrealistic hope … You have control of the outcome.”

2 I’LL START INVESTING WHEN I’M RICHER

“That’s like saying ‘I can’t wait for my teeth to stop being crooked so I can start brushing them’. Interestingly, the general rule is the less money you make, the more important it becomes to start investing,”
Mr Canion said.

3 ALL THE GOOD IDEAS ARE TAKEN

“Often people think everything has already been done before, that there’s nothing new. But 20 years ago there wasn’t a Google of Facebook, and Apple was nearly broke,” Mr Canion said.

“You used to have to be a super wealthy person to get these opportunities.”

Not any more. The rapid growth of exchange traded funds and new listed investment companies has allowed people to spread their money easily across emerging investments such as robotics and artificial intelligence, global infrastructure, hedge funds, cybersecurity and agriculture companies.

4 I’LL WAIT FOR THE MARKET TO DROP BEFORE INVESTING

Wealth for Life Financial Planning principal Rex Whitford said this myth was common for both share markets and real estate markets.

“People always underestimate the strength of rises and falls in markets,” he said. Even if you wait for a fall, there’s no reason why your assets won’t fall much further — as they did during the GFC.

“When’s the best time to invest? If your time frame is sufficient, now is always the best time to invest, Mr
Whitford said.

5 RENT MONEY IS DEAD MONEY

Generations of real estate lovers have pushed this idea, but Mr Whitford said mortgage interest was also dead money, and other investments could perform better.

“Owning a home works when you buy and stay there, because of the significant costs of buying and selling. In the modern era, most people don’t buy and hold,” he said.

“A home will not pay you an income stream in retirement.”

@keanemoney

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