Most people grow up learning their beliefs about money from the older generation as they have the wisdom that only can come from life-long experiences. Myths revolving money are often harmless, but it can also do some serious damage to your finances if you follow suit. Here are 7 money myths that Malaysians tend to believe.
Money brings Happiness
There is somewhat a connection between money and happiness, but to a certain extent. For example, if you’re unable to afford the necessities in life such as food, shelter, healthcare, etc. then its obvious that the situation is frustrating. Money and happiness matters when there is intrinsic motivation involved.
It all stems down to two types of scenarios: pursuit of wealth to be happy or in a state of happiness but just so happen to be in the pursuit of wealth. To be ultimately happy, it comes from within an individual, no matter if you’re rich or poor.
Millennials Lack Buying Power
The older generation often have the notion that millennials lack buying power because of inflation and stagnant minimum wage. In fact, millennials have the most buying power of any generation thanks to the digital divide. Millennials have access to a variety of payment methods, mobile ordering, delivery apps, etc.
There is also a study done by PayPal regarding the usage of credit cards between millennials. Often, if the credit card is integrated into the technology landscape, they are more willing to utilise it.
High Salary Guarantees Financial Security
One of the biggest myths about money is once you’re paid well, life will become easier. On the contrary, money doesn’t accumulate overnight. You must be committed to your financial goals and be strict with saving money, only then you’ll be financially secure.
Keeping your Money in One Bank
While the one-bank-fits-all is the easier approach to keep check on your savings, it will not improve your financial situation. Instead, you can opt for banks which provide good fixed deposit rates. Currently,the lowest interest rate you’ll be able to get is roughly 3.3% while the highest is roughly 4.4%.
There are many ways for you to grow your money such as stock markets, commodities, foreign exchange and many more. Nevertheless, it’s always important to do your research before investing your money, as it can be quite risky.
Invest Only when you Have Enough Money
Most people don’t realize that they don’t have to have a lot of money to start investing. There are many investments that start as low as RM100, and if you find an investment style that suits you, there will be great returns.
Even with the new minimum wage of RM1,050 a month, there are many opportunities for you to invest. Nevertheless, it is advisable to set your personal financial goals as well as the amount needed to start investing before you can reach your target.
Debts are a Big No-no
Do not assume that all debts are bad. If you’re familiar with Robert Kiyosaki’s rule of money, you’ll know that good debtsare a great tool to leverage investments. But always remember to pay off your bad debts first.
Credit Cards are Bad
People often think that a credit card is bad – that people often use it to spend money they don’t have and then not pay their dues. That misconception can be true, but only if you spend irresponsibly. When used properly, a credit card can be one of the most invaluable tool in your wallet.
For example, one can enjoy zero-interest instalment on certain cards when purchasing high-ticket items, earn points through air miles, enjoy exclusive promotions, as well as earn reward points that can be exchanged for something else later. Besides that, using a credit card can also help you build a healthy credit score, vital when applying for financial products.
This article was written by Vino K from CompareHero.my, a site dedicated to increasing financial literacy and helping you save time and money by comparing credit cards, personal loans, and broadband plans in Malaysia.