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11 Myths About Money That Make Succeeding Harder

11 Myths About Money That Make Succeeding Harder

Everyone says they want more money. But you’ll never get more money if you keep believing the lies you’ve been told about it. Let’s bash 11 common money myths that make succeeding harder.

1. “Wanting more money is evil.”

Let’s start with the premise that in all likelihood, you are an honest, ethical person who wants to do good in the world and have fun along the way. All of that requires money. But if you believe that only evil, bad or dishonest people get money, you sabotage your ability to make it. Why would you do something that is evil? If you don’t think this is true, remember that most of your thoughts are happening in your subconscious mind. You don’t even realize it’s happening.

2. “I have to be lucky.”

Luck is great in the short term, but long-term sustained wealth requires hard work, discipline and letting yourself make plenty of mistakes. Successful people say luck is only a small part of it. In order to actually experience luck, you have to do stuff all the time. The more you do, the more chance you’ll have of luck happening.

3. “Money will change me.”

Money doesn’t make you good, bad or anything in between. It just amplifies what you already are. If you are intent on doing bad things, it allows you to do more bad things. If you are intent on doing good things, money lets you do more of those good things. Since you’re probably a good person, make more money so you can do more good things.

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4. “Money is a thing.”

Money is not a real thing; it’s a concept. It’s something we humans have designated as a standard representation of value. When you get money, it’s because you provided some value. Maybe you helped someone with their taxes, worked for them for 8 hours or gave them a coffee cup that doesn’t tip over in their car. You did something that helped someone—something of value. Money is just a representation of that value you created. It’s not a thing.

5. “If I’m really cheap, I’ll get ahead.”

Pinching pennies does not make you rich. Pinching pennies makes you a gal with a bunch of pennies. Making money requires thinking with a big goal in mind. You’ll get whatever you think about. If you think about pennies, you’ll get pennies. If you think about millions, you’ll get millions.

“You have to think anyway, so why not think big?”

—Donald Trump

6. “Rich people aren’t like me.”

Rich people are not smarter than you. They’ve probably been knocked on their bottom a few times—probably a few hundred. They don’t have any mysterious quality that allows them to have more money than you. The difference is that they believe they can achieve success. When you think you are different, inferior or superior to rich people, you block yourself from success. It’s that subconscious thing from #1 again. You believe that only a certain type of person can be rich. If you are not that type of person, how can you have money?

7. “It won’t make me happy, so why bother?”

Beyond your basic needs of food, clothing, shelter, etc, money will not make you any happier. When you tie money to happiness, you create an expectation that it’s going to provide something it will never provide. You then believe that money (or lack of) is preventing you from being happy. Now you resent it. You’re pissed at money and you’re pissed at people who have it. Not a great mindset (that subconscious thing from #1 again) to be in when you’re trying to make money.

8. “There’s not enough of it.”

Money is a plentiful resource. Since it’s just a representation of value, there is as much of it as there is value. When more people spend money, it moves around more. More people are giving and receiving value and getting the things they need and want. There is always more value, so there’s always more money.

9. “I have to save money to get rich.”

When you believe that money is a scarce resource that you must hoard, you aren’t willing to take the risks required for success. You believe that sitting on money like an egg you’re trying to hatch will make you rich. That doesn’t work because it prevents you from thinking big and using the money you have to acquire the resources you need to make more.

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10. “Making money sucks and it’s hard.”

Making money doesn’t have to suck. The most successful people say that if you want to get rich you’d better be doing something you love. Doing something you enjoy sucks much less than doing something you don’t like. It also gives you the motivation to push through the boring and mundane tasks.

“Don’t do it if you don’t enjoy it.”

—Richard Branson

11. “If I make money somebody else can’t pay their rent.”

Monopoly is a fun game, but it taught you a terrible lesson: somebody wins and somebody loses. That’s true in Monopoly, but life wasn’t invented by Hasbro. This is the worst and most limiting money myth. It goes back to the premise that you are a good person who doesn’t want bad things for anyone except the guy who dinged your car door and didn’t leave his contact information—your subconscious (there’s #1 again) simply won’t let you do it.

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When you get money, it doesn’t mean someone else lost. Don’t believe that if you get money for a product or service you provided, someone else can’t pay their rent or buy food because you took that money from them. The opposite is true. Money moves from person to person when value moves from person to person. In other words, when people help each other, money flows. Everyone gets what they need and everyone gets money. Making money helps everyone.

Quit believing these 11 myths about money. Go make some.

Featured photo credit: Tax Credits via photopin via flickr.com

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Published on May 7, 2019

How to Invest for Retirement (The Smart and Stress-Free Way)

How to Invest for Retirement (The Smart and Stress-Free Way)

When it comes to stocks, I bet you feel like you have no idea what you’re doing.

Everyone who’s not a financial expert has been there. I’ve been there. But, time is passing and you need to be crystal clear with how you’re investing for your retirement.

Otherwise, it’s back to work until you can afford not to. So, how can you invest for retirement when you’re not a financial expert?

You take the time to learn the fundamentals well. If you do, you can grow your wealth and retire happy. The best part is that you don’t need to be a financial expert to make smart investment decisions.

Here’s how to invest for retirement the smart and stress-free way:

1. Know Clearly Why You Invest

Odds are you already know why should invest for retirement.

But, maybe you know the wrong reasons. It’s time you get clear on why you’d like to retire. Here are some questions to help you get started:

  • Will you spend more time with your family?
  • What does retirement mean to you?
  • Are you looking to launch that business you’ve been holding off for years?

Everyone wants to retire but not for the same reasons. Once you’re clear for why retirement is important for you, you’ll focus on making it happen.

Investing in the stock market allows you to take advantage of compound interest.[1] All this means is that your money earns money on top of its interest. A reason why investment in the stock market is one of the best ways to plan for retirement.

2. Figure out When to Invest

“The best time to plant a tree was 20 years ago. The second best time is now.”– Chinese Proverb

It’s true if you’d had started investing when you were 10 years old, you’d have a lot more money than you do today.

The reality is that most people don’t start investing until it’s too late. So, if you’re currently waiting for the perfect time to start an investment, it would be today. Open your calendar and block out 2 to 3 hours to choose how you’ll invest for retirement.

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A quick way to get a snapshot of where you stand is to use Personal Capital. Input all your personal information and spend some time setting your retirement goals. Once completed, you’ll know where you stand with your retirement.

Having a savings account for retirement isn’t planning for retirement. Why? Your money loses value when you factor in US inflation.[2]

3. Evaluate Your Risk Tolerance to Create the Perfect Portfolio

Investing your money well depends on your emotions.

Why?

Because when the market drops most people panic and withdraw their money. On average, the US stock market yields an annual 6% to 7% ROI (return on your investment.) But, this won’t happen if you’re worried about short-term loses.

Before you invest your next dollar, know your risk tolerance.[3] Your risk tolerance determines the number of risky and safe investments you’d have.

Regardless of your investing style, you need to view investing for retirement as a long term game. Know that some years you’ll lose money but recoup this in the long-term.

Avoid watching market-related new. Also, create a double authentication to log in your investment account. This way you’re less likely to withdraw your money.

4. Open a Reliable Retirement Account

Depending on your circumstance, you may need to open a new brokerage account. This is the account is where you’ll invest your money.

If you’re currently working for a company, odds are that they offer a 410K investing account. If so, here’s where you’ll invest most of your money. The only problem with this is that you’re limited to the stock options that are available.

You do have the option to open a separate IRA (individual retirement account.) Here are some of the best brokers:

  1. Vanguard
  2. TD Ameritrade
  3. Charles Schwab

5. Challenge Yourself to Invest Consistently

Committing to invest for retirement is hard, but continuing to do so is harder.

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Once you’ve started investment for your retirement, you run at risk from stopping. Often you’ll want to contribute less, so you’d have more money in your pocket.

That’s why it’s important that you create a budget that allows you to invest each month. If you’re working for a company, you can set a percentage for the amount you’d like to contribute each month. Most people by default contribute 1% but aim to contribute 10% to 15%.

Be the judge for how much you can afford to contribute after covering important expenses. To stay motivated, use Personal Capital to view your net worth.

A benefit to contributing money to your retirement account is not taxed. For example, if you earn $100 and invest 10%, you’d contribute $10, then get taxed on the remaining $90. As of 2019, the most you’re able to contribute towards your 401K is 19K but this can change.

6. Consider Where to Invest Your Money

The most common way to invest your money is in stocks, but it’s not the only way. Here are other ways to invest:

Robo Advisors

Robo-advisors[4] are fancy algorithms that’ll choose the best investments for you. Sites like Wealthfront make it easy for first-time investors to invest their money. You’d input information about yourself and set your risk tolerance.

Then, set your monthly contribution amount and your robo-advisor would do the rest. Robo-advisors charge a fee to manage your money, but less than regular advisors.

Bonds

Think of bonds as “IOUs” to whomever you buy them from.

Essentially, you’re lending money and charging interest. Like stocks, not all bonds are equal. Some will be riskier than others depending on their rating.

Here are the different types of bond categories:[5]

  1. Treasury bonds
  2. Government bonds
  3. Corporate bonds
  4. Foreign bonds
  5. Mortgage-backed bonds
  6. Municipal bonds

Mutual Funds

Picture a group of people dumping all their money in a jar that’s managed by a professional. This is how mutual funds work. The fund manager manages the money looking to earn capital gains (interest.)

One of the best types of mutual funds is index funds. Since these funds don’t try to beat the market and instead follow it, they need less research. Because of this they often charge the lowest fees and yield the best long-term results.

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Real Estate

Yes, buying a home is an investment when done correctly.

Imagine buying a home and using it as a rental property. After repairing it, you receive a monthly surplus check of $100 to $200.

This may not sound like a lot, but repeat this process enough times and you’d earn a large amount of passive income. That’s why real estate is one of the best investments to not only retire but become wealthy.

But, it requires a lot of money to start and you should expect losing money along the way as you learn the process.

Savings Accounts

Your money can still grow in a savings account. Nowadays most online banks offer a 2% annual return. Although the average inflation is higher your money will be available when you need it.

7. Master Disincline to Dodge Short Success

Investing for retirement is a long-term strategy. That’s why you need to master delayed gratification. All this means is delaying short-term pleasure for something bigger in the future. Research shows that those who have delayed gratification are more successful.[6]

So how can you master delayed gratification?

By building your discipline.

Think back to what retirement means to you. A clear purpose will help you avoid withdrawing your money during a market downturn. It’ll help you contribute more towards retirement when you’d want to waste it instead.

Your journey towards retirement will be long, so reward yourself along the way. Choose a reward that’s relevant and meaningful, so that you reinforce positive behavior. For example, after contributing more towards retirement, treat yourself to dinner.

8. Aggressively Invest on This One Investment

I’ve mentioned several types of investments but haven’t covered the most important one.

It sounds cliche but here’s why you’re your best investment towards retirement. The more you know, the more money you’ll be able to make. The more good habits you adopt, the more secure your retirement will be.

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More importantly, investing in yourself is an investment that no one can take away. There’s no market downturn nor tragic circumstance that’ll wipe your knowledge and experience.

But, how can you invest yourself?

Reading books, blogs, and anything that’ll help you learn new topics daily. Listen to podcasts and audiobooks on your commute to/from work.

Save money to buy courses and hire coaches. I used to believe hiring coaches was a waste of money when I could learn the subject alone.

But, coaches see your blind spots and hold you accountable. Hiring the right coach will help you achieve your goals faster than you would’ve alone.

Retire Happy with Excess Money

The key to a secure financial future doesn’t only belong to financial experts.

It’s possible for you and I. What if you were able to retire earlier than most people and weren’t a financial planner? What if you were able to focus on what you enjoy doing the most while your money was working hard for you?

I know this sounds impossible now, but the truth is you’re capable of taking charge of your retirement. I’m not a financial expert but I’ve learned how to invest my money by reading books and learning from others.

Investing your money is scary. So start small and invest a small amount of your money with a robo-advisor. Feel your money drop and rise for a month or two. Then, invest more and keep this up until you’re aggressively saving for retirement.

One day, you’ll wake up with a net worth you’re proud of – confident about your retirement. You now know a few strategies you can use to invest in your retirement. Will you take action to retire happy?

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Featured photo credit: Matthew Bennett via unsplash.com

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