There is financial advice that circulates to the four winds as if they were tenets of faith. Things that we have heard in a multitude of different situations and contexts, and that as a result of repetition we have ended up believing at face value.
However, not all of them are good advice. There are some that are, to say the least, questionable. And there are others that can even be harmful, because they only reduce our chances of achieving financial health.
Let’s see some of them.
1. Follow your passion
“Follow your passion” may sound great from an existential point of view, but be passionate about something doesn’t mean you’re good at it, or that you have it easy to earn a living.
Remember, in the world of investing, the most important factor is time. The earlier you start investing, the greater the financial benefits and the greater your flexibility in life. To be able to invest you have to save, and to be able to save you have to be able to generate a good level of income.
Following your passion is all very well, but you have a lot of time ahead of you to do it. Also, passions change, just as we change as the years go by. If you choose a career that suits your strengths (to what you are really good at) in a well-paying industry, your chances of earning income over a lifetime will increase.
If you go this route, you may not be 100% passionate about what you do at first, but once you’re in a good financial position, you’ll also be more able to make changes in your life to be more and more satisfied. Because you function from a situation of strength, not weakness.
2. Start a business if you want to be rich
One of the most heard financial advice is that to get rich you have to be entrepreneurnot an employee.
That is not true at all. It depends on your behavior with money.
If you have a well-paid job and good savings and investment habitschances are you’ll be swimming in abundance (in financial health, at least) over time.
Yes, this is something that does not happen overnight. But if you’re patient and the world doesn’t go to hell in the meantime, it will happen. In fact, It’s the least risky way to get rich. because it depends to a very high degree on yourself.
Of course, if you want to get rich quickly… you still have to set up a business. But the risk of things going wrong is much higher. You know, profitability and risk go together.
3. Read a lot of books
Another of the financial tips you hear out there is how important it is to read books. “Read as much as you can,” they tell you.
And yes, that can be very useful. “Can”.
But if you don’t apply anything you readthen it is no more useful than sitting on the couch and watching Netflix.
It is preferable that you read a few selected books, extract some important ideas and apply them in your day to dayto read hundreds of books and not apply anything.
It is the actions and decisions that transform your life, not the thoughts.
4. Renting is throwing money away
Another financial mantra that is difficult to question in our minds is that if you rent the place where you live you are wasting moneyand that what you have to do, whatever it may be, is to buy.
Renting is not throwing money away. You can live comfortably both renting and buying. The question you must ask yourself is if you want to invest your savings in real estate or prefer to invest them in something else.
And for that you must get the numbers right, because buying a house has many hidden costs, in addition to entailing a certain loss of vital flexibility due to the commitment you acquire with the mortgage.
5. Going to college is a waste of time
Another of the most heard financial advice today is that it is not worth going to university, because it is very expensive and you can obtain similar training (even more practical) in other cheaper ways.
It is true that things are changing very fast. But the reality is that college graduates have a higher average income level than non-graduates. It is a factor that continues to weigh heavily in selection processes, especially in well-paid jobs.
It should not be like that? Maybe not. But it is what it is.
College gives you access to more career opportunities, the ability to network widely, and study and work habits that can be very useful throughout a lifetime. It’s not a waste of time at all if you use the experience well.
There you have 5 financial tips that are, to say the least, questionable. Give them ball, Moneytimer!
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