OK....let's look at some of the Money Myths that Dave Ramsey debunks in his book. This is good stuff! To find more myths and to get answers as to why these myths are just that, myths, get the book!
MYTH: Everything will be fine when I retire. I know I'm not saving yet, but it will be OK.
TRUTH: Ed McMahon isn't coming.
The government won't take care of you....it's YOUR job to prepare.
MYTH: Gold is a good investment and will cover me if the economy collapses.
TRUTH: Gold has a poor track record and isn't used when an economy collapses.
MYTH: Cash Value life insurance, like whole life, will help me retire wealthy.
TRUTH: Cash Value life insurance is one of the worst financial products available.
MYTH: Everyone has a car payment. It's just something you do.
The typical american has a car payment of $464 dollars/month. If, at age 25, you would invest $464/month into a decent mutual fund instead of have a car payment, by age 65 you would have over $5 million dollars. Hope you like your new car.
A new $28,000 car will lose about $17,000 of value in the first 4 years. To get the same result, you could just toss a $100 bill out the window on your drive to work once a week. Ouch!!
MYTH: playing the Lotto and other forms of gambling will make you rich.
TRUTH: Lotto and Power Ball are a tax on the poor and people who can't do math.
Energy, thrift, and diligence is how wealth is built....not dumb luck.
The average family in America makes about $40,000 per year. Even if they never get a raise, that family will make over $2 million in a working lifetime! Your income is your greatest wealth building tool. If you're tying your income up in debts and unnecessary purchases, you'll never see that $2 million go to work for you.
More MYTHS to be busted soon!!
And Remember, don't even consider keeping up with the Joneses. They're broke and they can't do math!