CFO of Life #28 - The money myths that hinder your financial future

Money doesn't buy happiness – one of the biggest money mindset shortcuts that people use. It is truly a heated debate if money does buy happiness, and I lean towards "Yes"! I will tell you why in a bit!

We all want to have a lot of money, but most of us don't have the healthiest relationship with it. This prevents most of us from achieving that. But all is not lost, you can rebuild those shortcuts into healthy money rules.

Interestingly, we develop those shortcuts in all aspects of our lives. In shopping, in dating and even in speaking. It is just part of human nature. Especially with today's fast-paced and constantly changing life, it sometimes feels like a lot.

But once you start recognising your mental shortcuts and see how they work, you would be able to change them. For that to happen, you need to understand how those habits formed and what triggers them. For most of us, me including, it all started when we were kids, but some have formed relatively recently.

I have been talking a lot about those myths, so let me list the most common ones and try to break them down.

The most common ones that people cling to are:

? Money doesn't buy happiness

? Money doesn't grow on trees

? This is only for "rich people"

? People like us don't go there / don't do this

? Credit cards are evil

? The stock market is only for the rich

? You need $100,000 to make money from the stock market

? The stock market is rigged

? + many more... (please share yours in the comments)

While the list is a lot longer than this, I will pick my top 3 and try to break them down.

Those are:

1) Money doesn't buy happiness

2) Money doesn't grow on trees

3) The stock market is only for the rich

"Money doesn't buy happiness" is one of my favourite debate topics. It is such a great open-ended statement that everyone can expand in their unique way! But, most people, me included, have this embedded into our money psychology by our parents and maybe grandparents.?

Now as an adult, I think it is partially wrong. I am team "Money can buy you happiness", but not directly. The money would remove stressors that would dampen your happiness or prevent you from being happy at all! It would enable financial freedom, which itself would lift a lot of pressure off your shoulders. It would also enable you to buy things that would also make you happy.?

Don't get me wrong, money is not a silver bullet for your problems, but it is close to being one for many people. Interestingly, after gaining a certain amount of money, most people stop buying material things and start buying more experiences.

It is similar with "money doesn't grow on trees". They are both money psychology rules that are based on abundance. Regardless of that, the “grow on trees” part is the one that suggests the person doesn't know where to get more money from. It is also satirical to use this expression since money does “grow on trees”.?

Despite that, it is important that we focus on “why” the person is using that shortcut. Without understanding the motivation or reason for masking reality, it would be extremely hard to uproot the habit.

For me, this was the go-to mindset when I was stuck and had to come up with a large sum of money, that I didn’t have. It was a way to escape the situation and lie to myself. With practice and time, it was something that I managed to convert into a “power” rather than a limitation.

To do so, I flipped it around and made it into an inspiration. Every time I think about “Money doesn’t grow on trees”, I take a long walk in the park and remind myself how much "money does actually grow there". It is also an inspiration, to look for alternative approaches, and it has not failed me!

Finally, the most damaging of the 3 money psychology shortcuts: “The stock market is only for the rich”. This is a big problem as it actually limits your future growth. Interestingly, 50-80 years ago, this would have been closer to the truth but not today.

Nowadays, we have access to so many ways to invest in the stock market and this can’t be an accurate saying. You can easily invest in an ETF, a singular stock, an index or a commodity. And all you need is some available money. This is what it all boils down to.

Often, if people don’t have disposable income to put towards buying stocks, they say this is for “the rich”. The mythical class of people who just have money to throw away and risk losing. But, I am quite happy to see that more and more younger people are breaking the stigma and investing earlier in life.

While making a budget or opening a savings account can be done almost immediately, changing your mindset takes time. It also takes constant consideration and a lot of work. But regardless of that, with some dedication, you can get to it. And once you break down those money myths shortcuts, you will see how much different your world gets!

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