Often times, financial decisions we make are based on information we believe to be true. However, some of this may actually be misinformation that can prevent you from taking full advantage of financial opportunities. Here are some common myths about wealth.
INCOME REPRESENTS WEALTH
Many people believe that the more income they have coming in, the wealthier they will be. In the long run, it’s your net worth that has more impact on your overall financial wellbeing than your income. By making saving a priority earlier, you’ll be able to take advantage of compound interest and build your wealth over time.
I HAVE PLENTY OF TIME
When it comes to building your wealth, time is a huge factor. It’s not enough to just know what you need to do, it starting this process as soon as you can. For savings, such as retirement, you may be missing out on tens of thousands of dollars by delaying your savings by even a few years.
BIG RISKS MEAN BIG REWARDS
While some people were able to build their wealth through riskier investments, most people build their wealth over time by investing in themselves and being patient. Generally, as you get closer to retirement age, investments should start to become more conservative so there isn’t a big loss right before retirement.
THERE’S A SET SCHEDULE
It can be hard to see people your age reaching financial milestones, such as buying a home, before you. Everyone has a different experience when it comes to their finances and there isn’t any set ‘age’ where you should be reaching these steps. It’s also important to remember that what you see isn’t always the reality of the situation. Stick to your goals and keep on your path and you’ll reach these stages when its right for you.