Are money myths stopping you from reaching your financial goals sooner?
You may have heard the saying: A lie told often enough becomes truth.
Whether it is family, friends, a colleague or the media, everyone has a view on money, that they perceive to be the truth.
Often these “truths” are formed from your childhood early money beliefs. And they can have a significant impact on how you view money in your adult life.
Today we are debunking the top two money myths that I am pretty sure we have all heard
- Money is the root of all evil
- Money won’t buy you happiness
Money is the root of all evil
I think it is safe to say that we all would have heard this saying, at least a few times in our lives.
People who are wealthy are often seen in a negative light. They are perceived as getting that way by being greedy, or deceitful, in the pursuit of riches.
The stereotype is seen in movies and books with terms such as “filthy rich” being used on a regular basis.
If you are brought up hearing this phrase, you could subconsciously start to believe that pursuing further wealth will make you a bad person.
As a result, you might avoid pursuing opportunities to make money. Or worse, you want to get rid of money as fast as you can, as you don’t feel comfortable with it.
The saying itself, dates back to biblical times. But just like a game of Chinese whispers the actual saying was in fact – the love of money is the root of all evil.
See the subtle difference that changes the meaning of the statement altogether?
Our attitude about money
Money itself isn’t evil. It is our attitude about money that can be the root of evil. If you have a love of money alone then is is a dangerous path you are walking.
Instead money should be viewed as a tool to reaching your life goals. The money itself has no real value. It is the dreams money helps you fulfill that are the most important.
For me to fulfill my dream it will mean I need more than $1 million invested and earning me a passive income.
For some that is a figure that could seem over the top. If I was to say to someone I want one million dollars, they think I am being greedy. Or it turns into a case of Tall Poppy Syndrome and the haters start to come out.
But if I was to say I want to be able to spend precious times with my daughters whilst they are young. This can change someone’s perception.
In essence I still need that million dollars to achieve it, but the greedy element has been removed.
That is why in my Kick Start your Wealth challenge, I ask the participants to tell me about their goals.
Interestingly enough, not one of them have come back to me yet and said a dollar amount that is their goal. Instead it is all about building a better future for themselves and their children.
Money magnifies your true nature
The pursuit of wealth always has to be deeper than just making money. As money itself is a moving target. You make a million, you want two million. You earn $70,000 you want $80,000. It’s something that you will always move the goalposts for, as it is in our nature to crave more.
But when your goal is to be mortgage free, or to earn $40,000 a year in passive income it make it about what that helps you achieve. Not about the monetary amount.
The key is to not attach your worth in how much money you have. As that is where problems can arise.
I am not totally ignorant to the fact that yes there are times when money is used for the pursuit of evil. But as Tony Robbins puts it:
If you are mean and selfish, you have more to be mean and selfish with.
If you’re grateful and loving, you have more to appreciate and give.
Money doesn’t bring you happiness
The second often quoted myth is that money doesn’t bring you happiness.
It would be more appropriate if it said money alone can’t bring you happiness.
A great deal of happiness can be had if you have money and it solves a money related problem. As an example, you don’t bring in enough income to pay your bills. In this case money can help to alleviate the stress you are facing and that can put a smile on your dial.
Studies have shown that people are happier when they have cash on hand and extra money in their bank account.
The key point here is that money won’t solve non-money problems. So attributing all of your happiness to reaching a certain level of wealth is risky.
Law of diminishing returns
There is a law of diminishing returns that occurs, where money does make you happier but only up until a point.
Up until the $75,000 mark in income is the tipping point. Once a household is over this level, more money does not equate to more happiness.
Our happiness is affected by whether we have more or less of we we had before.
So if you are not careful you can get into a cycle where more is never enough.
Money can boost your happiness
Money can buy a great deal of things that contribute to your happiness.
Whilst making a physical purchase gives a fleeting sense of joy, spending your money on life experiences can create life long happy memories.
Spending time with people you love and building strong connections is a key factor to happiness. So if money allows you to fly to visit someone you love, go out to dinner with friends or visit an exotic island for a family holiday then this can increase your happiness.
For me the key factor here is actually to flip the saying on its head. Not having money can cause unhappiness, but when you do have it it can only solve your money related problems.
Watch your thoughts
These are just two of the top myths that I hear most often. In a future post I plan to cover off some more myths that you may have heard.
The key takeaway here is when you hear phrases like this, take them on board for sure. But don’t be afraid to ignore them and form your own opinion.
Watch your thoughts, as they soon become your truths.