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9 Myths About Money & Prosperity

The following nine myths are detailed in Killing Sacred Cows: Overcoming the Financial Myths that are Destroying Your Prosperity:

Myth 1: Scarcity Drives The Marketplace

The marketplace is driven by the notion that resources are limited and the world is a zero-sum game: anything that another wins is no longer available to all others. But this simply isn’t true.

We must put value on people, not things. We should seek win-win situations, not win-lose.

Abundance, expansion, and reproduction are the natural state of the universe.

Even if resources are finite, scarce resources plus human ingenuity equals abundant resources.

Myth 2: You’re In It For The Long Haul

Were told to accumulate wealth by letting our investments sit forever, such as with a 401(k), to diversify, invest according to our “risk tolerance,” and never to utilize our principal.

In a few decades, our investment should have multiplied so many times that we can live off the interest.

So why is it a failed concept? It’s based on gambling, not investing.

Further, this type of investment is often based on a calculation that doesn’t always add up.

Plus it severely limits productivity by teaching that we have to wait 30 years to enjoy life; it is based on the misguided hope of futurism rather than maximizing the present, creating a dilemma that leads to inaction or limited action.

Myth 3: Financial Security

Security is perceived as coming from financial products, the government, corporations or health and retirement benefits.

However, this type of thinking is destructive and debilitating because it leads to an entitlement mentality.

It keeps us working in conditions that don’t bring us happiness in the name of security, and it gives us a false sense of peace and security that we come to depend on.

Myth 4: Money Is Power

On one side of the money coin, we’re told one must have assets to build on, otherwise they’ll remain stuck.

But this runs contradictory to the belief each of us can create value and capitalize on our ideas, energy, or non-financial resources.

Broke people think they need to start with money in order to end up with money, so they remain broke.

This is why they gamble so much. They have nothing, so they want something for nothing, from nothing.

On the other side of the coin it is essential to realize money has no intrinsic value — to hate it or love it doesn’t make money good or bad.

The phrase “Money is the root of all evil” was perpetuated by a misunderstanding of biblical quotes and solidified by the belief that capitalists exploit workers.

If money is a tool of production, used to facilitate efficient and effective exchange, then how can this even remotely be evil?

The myth is paralyzing us because we want more money but are afraid to pursue it; and it turns our brains off when we settle for the lie that money isn’t important.

Myth 5: High Risk Equals High Returns

There are no inherently risky investments; there are only risky investors. People make an investment safe or risky. Everything carries risk if we aren’t educated about the investment.

And who defines what’s risky? For whom? Never accept the propaganda that you must be willing to stomach high risks in order to achieve high returns.

The truth is the better you can mitigate your risks to near zero, the higher your returns.

Myth 6: Self-Insurance

Too many people believe in only buying the minimum insurance coverage with the lowest premiums, and to stop carrying various insurance once we accumulate enough assets to be self-insured.

But what should be done, for peace of mind and maximum protection, is buy all the insurance you can get. The more assets you have, the more insurance you need.

Myth 7: Avoid Debt Like the Plague

People are not taught the true definition of debt. Not all borrowing is debt. Debt is a function of assets minus liabilities, where if there are more liabilities than assets a person would be in debt.

So it is a function in relation to the corresponding asset that you have when borrowing. Going into credit card debt to support an out-of-control consumer addiction would be misguided and would create debt.

Bottom-line: It can be wise to borrow money if there’s a greater or equal asset acquired through borrowing.

Myth 8: A Penny Saved Is A Penny Earned

We too often base our decisions on price, much to the exclusion of all other factors. Instead, we should look at other factors such as value — both of the product or service to our lives and of how its creation gives value to society at large.

Price is certainly a factor to buy or not, but we should still compensate the manufacturer for the value we will receive, according to our perception, rather than to win at their expense by getting them to lower the price.

Myth 9: It’s All About The Numbers

We make too many financial decisions by numbers. The problem is numbers alone can lie and don’t often tell the whole story.

Stats can be presented in any way and given any context in order to convince people of things. But stats are a trivial part of reality at best, and more often than not are considerably misleading.

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Garrett Gunderson is an entrepreneur, financial coach, the founder of Freedom FastTrack, and the primary author of the New York Times bestseller Killing Sacred Cows: Overcoming the Financial Myths that are Destroying Your Prosperity.

Garrett loves inspiring others to turn their potential into production. He has dedicated his life to living and teaching a unique concept known as Soul Purpose that reveals how anyone can live a more prosperous and rewarding life.

As a finance and business productivity coach, Garrett instructs both large and small groups of business owners and financial service professionals nationwide.

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9 Myths About Money & Prosperity