We have all heard bad financial advice at some point in our lives. These misconceptions seem small but end up doing more harm than good. Here are a few of the most common misconceptions we’ve heard repeated by clients.
Misconception #1: My Debt is Insurmountable
Many people feel like debt is controlling their lives. However, getting out from under debt can become a reality. Reevaluating your budget and shifting your mindset that a debt free life is possible can make a huge difference in your future finances.
Misconception #2: My Credit Score is Only Important if I Buy a House
Rental property management, car dealers, and even utility companies all look at your credit score before allowing you to open an account or make a transaction. Checking and keeping your credit score between the recommended range of 670 to 739 improves your creditworthiness.
Misconception #3: I Can Borrow From My Retirement Savings and Pay it Back Later
Once you begin borrowing from your savings, it can be difficult to catch up and pursue your retirement goals. Not only are you spending the money you previously put aside, but you’re also losing any interest you may have earned if the funds stayed in your account.
Misconception #4: I Can Live Off Social Security
Average Social Security payouts provide payees with an income similar to a minimum wage job – an income that may not lead to the comfortable and relaxing retirement you have in mind. It can be helpful to think about Social Security as an added bonus instead of relying on it as a sole source of income.
Misconception #5: ‘Wealth’ has a Standard Definition
Everyone has their own idea about what true wealth is. For some, it’s spending more time with family, saving up for that next big vacation, giving back to the community or investing in a second home. A well-planned strategy and trusted guidance can help you stay on track to building your own wealth.
Money is complicated. Listening to the advice that does not corelate to your goals can have negative consequences on our confidence and financial wellness. But don’t forget, you always have a trusted partner and can contact the office anytime if you have questions.
This material was developed and prepared by a third party for use by your Registered Representative. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security. The content is developed from sources believed to be providing accurate information.
This information is not intended to be a substitute for specific individualized tax, legal, or investment planning advice Depending on the type of account you have, there are different rules for withdrawals, penalties, and distributions. For advice regarding your specific circumstances, the services of an appropriate legal or tax advisor should be sought.
From Your Advisors at EBW Financial: Don’t Fall for These 5 Common Money Misconceptions
January 19, 2023