Personal Finance - Five Myths of Money You Need to Know

Wealth creation and generation is hardly rocket science. Rather it responds to the application of several laws and principles that will work for almost anyone, anywhere. The question now is - Why are so many people living in want, lack or penury? The reason is because money education is not taught in schools, so we have grown up believing several wrong ideas or myths about money that hold us back.

Let's examine them in turn:

The first myth of money is that you need to undertake profound spiritual exercise to acquire plenty of it. This myth gains ground in a hugely religious society such as ours. People organize prayer meetings, night vigils, pilgrimages, miracle crusades and the like in the quest for wealth. But have you heard the really wealthy attribute their wealth to this strategy? The really wealthy are not particularly close to God in our society while many of those who are close to God are very poor. Money thus does not answer to prayer or spiritual exercise.

Another myth that throws people off on the road to achieving wealth is the famous line - saving for the rainy day. While this statement encourages one to save, however it is for the wrong reason. Rainy days signify emergency situations, which tend to wipe out all your savings. It is what you save that can be multiplied and increased in order to grow wealth. So instead of saving for the rainy day also save for the opportunity day as wealth can only be created when you take advantage of opportunities.

The third misrepresentation is that money is meant to be spent. According to most people life is too short so let's keep spending. This mindset usually is that of those in lack/want. Money is not meant to be spent, rather it is meant to be multiplied. The difference between the rich and the poor is that while the rich multiply their money several times before they spend the proceeds, the poor spend their money once and they can never get any value from it again. If you keep multiplying your money over you will become wealthy eventually.

Putting your hard-earned money into giving loans to help others is another myth of money. When someone approaches you for assistance and you loan them some money you are giving up the opportunities to multiply that money. This is because many people hate repaying their loans and default. Infact defaulting loans is one of the biggest reasons for the parting of ways among friends. Please leave the loan business to the banks who are set up to do it. Instead give money gifts to people who ask you for loans which you can afford and they are under no obligation to return. Your finances and relationships will be better for it.

Finally it is pure myth to believe that you can manage large sums of money when you cannot manage little sums. A man who spends hundreds anyhow will do so when he has millions. Wealth building starts one Naira at a time. Learn to manage One Naira and you can manage One Billion Naira someday without frittering it away.

Wealth creation starts from the inside out. Money is a reward for solving problems. Once we can get beyond the myths we can finally put money into best use working for you and in no time you will stop working for money!