Every Tom, Dick and Harry will give you advice on how to manage your finances. From the know-it-all manager to websites across the internet; flood you with financial myths that can do more harm than good. Read this article to find out some of the most widely recognised myths.
1. Most aunts would tell you that investing in precious metal is worth it; the same myth is splashed on your face through telemarketing ads. But the truth is that investing in precious metal is clearly a bad investment. To put things into perspective the last time gold was at its peak was in 1980 when it was priced at $1,980 an ounce. Recent trends suggest that gold is never going to reach those astronomical figures any time soon and would actually result in you losing a lot more money than what you make from precious metal. And let’s not even get into how volatile the precious metal market is.
2. Another popular myth is that one should always buy a house instead of renting. That line is said as if it is the golden rule of financial management but in reality it is far from the truth. It all comes down to the kind of situation you’re in and whether you need a house of your own. There are obviously significant advantages and disadvantages to both. All we are saying is that you shouldn’t rush and buy a house because it is a great investment to make. Assess the situation you’re in and then take a call.
3. People believe that having a high credit score is not only commendable but also a good thing. Not to spoil the fun but the reverse is actually true. Credit scores are measured built on a system that takes into account how much debt you have and how much a bank is willing to give you. So as soon as your credit card balance comes in at the end of the month, make sure to pay them off and maintain zero balance. The more balance you have, the less likely it is for banks to give you a higher amount to spend.
4. Young adults who have started working tend to believe that they make too little to start saving and that they can start once they start raking in the cash. But in reality it doesn’t matter how much you as long as you’ve made a habit of saving. Experts suggest that everyone who earns need to save so that they have a safety net to fall on, if and when they lose their jobs due to market volatility and downsizing by organizations.