Learn about 5 Common Money Myths!

Money can be super confusing, and that's why, in some cases, people believe and spread misinformation about money that isn't quite true. Let's do some myth busting and find out some of the most common misconceptions about money.

Myth #1: "We can just print more money if we run out"

This is one of the most common myths in the financial world, and a lot of people don't understand how silly it is. Luckily, we're here to help! You can't just print more money because that would cause inflation.

Think about it like this: imagine you are in an imaginary world where you pay for everything in apples.

• A bike: 5 apples

• A toy: 1 apple

• A book: 2 apples

Now, imagine there are 100 apples in the whole town. Then, one day, everyone wakes up and there are now 1,000 apples in the town. Everyone feels richer at first. But then they realize that the prices for bikes, toys, and books have gone up, meaning that the purchasing power of one apple went down, even though there are more apples! Cash works the same way. If the government just decided to print a bunch of money, companies would raise their prices, and nothing would change.

Myth #2: "Credit cards have unlimited money"

While it may seem like it, credit cards ultimately have to be paid back. Think about it more as a loan. Every time you make a purchase with a credit card, you are being given someone else's money, which you then have to pay back.

Myth #3: "The stock market is just like gambling"

Although both the stock market and gambling involve risk, the risk factor is much lower in the stock market. Take the S&P 500, for example, with an average return rate of 10% annually. You are more likely to grow your money in the stock market.

Then we look at gambling. Gambling is designed for the player to lose. No matter how many strategies you try, the house always has an edge against you. That's the difference. It is virtually impossible to make money over a long period of time when gambling. On the other hand, you know from our lessons that the market always has and will recover, making it a much safer investment.

Myth #4: "All debt is bad"

When you think of debt, most people think of stress. However, some debt can be good. Take student loans, for example. Most people can't afford to pay for college all at once. But a loan from the bank, putting you in a little bit of debt, can be the game changer for sending you to school.

Another example is a mortgage. Again, most people can't afford to buy a house all at once. So, people use mortgages to pay off a home over a very long period of time. Without these types of debt, most people wouldn't be able to go to school or buy a home.

Myth #5: "The stock market is only for rich people"

This is completely false! Anyone can invest, no matter how old or young you are. Countless apps have been released where people can even invest money for you. It doesn't matter how much money you have. The only thing that matters is how much effort you're willing to put in.

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Comment any myths that we missed!