There are many myths surrounding finance and cubs win free food, one of the most important topics in the business world. But how many of them are based on real truths? This article will demystify three common misconceptions.
Start by educating yourself on these common misconceptions so you can make confident decisions without risk:
– Financial Industries Are All Interested in Your Money
– There’s Always Hope if You Lose Your Job
– It’s Impossible to Get a Loan These Days
1. Financial Industries Are All Interested in Your Money
While the financial industries do want your money, you shouldn’t believe everything you read about high-fee fund managers and credit card companies. What’s true is that traders are heavily involved in the markets, which must create a wide collective view on the market’s volatility. But when things go down, they don’t look at it as a perk. They see it as an opportunity to make themselves a little extra money (at least one of them does). In fact, there are signs that many investors continue to lose faith in the market because they can’t see any long-term stops or breaks.
2. There’s Always Hope if You Lose Your Job
This myth has been around as long as retirement planning, if not longer. While it’s true that your money can continue to grow with time and investments can produce investment income, there are no guarantees. In fact, the most common enemy of retirement is the dreaded “job-loss.” And yes, you need to take it seriously.
3. It’s Impossible to Get a Loan These Days
It may be a myth but it’s a myth nonetheless. Don’t let yourself think that you’re unable to get a loan because of your lack of credit score, lack of experience or lack of collateral. In fact, there are countless loans available to suit your needs and budget.
It’s hard to acknowledge the truth without being embarrassed by it. After all, we’ve all been told different things about many things in life. But as long as you give yourself a chance to find the facts out for yourself, it’ll be easier for you to reap the benefits of your hard work.
4. The Main Accomplishment of a Trader Is to “Lose Money”
Trading is one thing, but let’s face it: getting into the industry usually means betting on your skills and luck. A loss is a normal part of this endeavor. But even if you’re not a losing trader, there’s no way to know what will happen in the future, so making money is never easy.
5. Your Retirement Portfolio Shouldn’t Constitute More Than 10% of Your Net Worth
To tell the truth, your retirement portfolio should be as small as possible while still earning income – that way, you won’t lose any money and you’ll have less risk. But that doesn’t mean that you should have a small retirement portfolio. In fact, the amount of money you have pales in comparison to the size of your retirement portfolio – meaning you should start investing right away and do it as much as possible.
6. The Majority of Your Portfolio Should be in Bonds
There are many different kinds of bonds, including U.S., foreign, corporate, municipal and more. Each has its own degree of risk and promise for earnings; therefore, there’s no single answer to this question. You need to consider several things before making your decision – starting with how much interest rates can go up or down at any given time.
7. The Best Time to Start Investing is in Your 20s
Some people say this; others say it’s a myth. The truth is that there’s no single best time to get started. If you can, the earlier the better, but it all depends on your career and overall situation.
8. Liquidity Means Being Able to Sell Something Immediately
Liquidity is not about selling something at any given time; rather, it’s about being able to convert your assets into cash one way or another and move on with your life (without having to worry). That doesn’t mean you can’t invest in highly liquid assets or that you shouldn’t invest in less liquid ones (like volatile short-term investments). In fact, the difference between a highly liquid asset and a less liquid one is purely based on your ability to access those assets.
9. A Personal Loan Is Always Better Than a Business Loan
Some people say that big businesses find it difficult to get loans; however, their business isn’t always their main asset. They seem to be making these statements too quickly because the real expenses of running a business are not much different from those of running your own business. At the end of the day, both kinds of loans have risks and advantages: small businesses always have more advantages than large businesses when it comes to financing.
10. A Good Financial Planner Only Charges You Fees
A good financial planner provides you with valuable information that you can use to make decisions on your own, not just give you advice and leave the rest to you. At the same time, there are many ways of selling products that don’t involve fees – in fact, some people call these “financial planners” a “financial salesperson.”
