Financial Myths And Financial Facts

There are so many myths spread everywhere in the world and also in every sector. No sector of the world is remained untouched with the Myths spreading. See the Political sector; it is totally jam packed with Myths. There would be hardly any politician, being untouched with the traps of myths!! See the Educational Sector, the sector which is formed for the lives of the kids who are the future of the nation but even in this sector there are lots of myths prevailing and spread by the school owners regarding to the expenses and donations. Even if we see the religious sector which has the liability to eliminate all the myths from the minds of the people, is also suffering from the myths and misleading statements of the religious leaders and followers. So, everywhere there are myths, myths and myths!!!

Even the financial sector is not remained untouched to this. There are lots of myths spread by the companies and also by the institutes for the benefit if them. There are so many myths that are accepted universally and now they never sound like a myth in fact if you oppose them, people feel that you are spreading myths!! So, lack of proper education and also the misleading people are the main responsible persons for spreading the Myths. Let’s have some of such myths.

Having many credit cards is a status symbol

Credit Card companies are amongst the main responsible companies for this slow down of economy. They did not sell the cards to people but literally they distributed them to the people. One thing they spread in the mind set of people and made a brain washes by saying that multiple credit cards makes a good credit of yours. If you have multiple credit cards, you can easily make use of all of them for different purposes. Some of the credit cards are offered with no annual fees but at the same time more interest rates. Some of them offer lower credit and more loans to the people, but they charge the highest interest on the loans. Some of the cards ask for securing security and offer unlimited spending on the basis of those securities. So, people were persuaded by various offers and were asked to keep multiple cards and ultimately they made their benefit!!

People suffered a lot by keeping multiple cards as they need to pay the interest and annual fees and also some of the late fees and unused debts for the multiple cards. It was difficult to get survived for the multiple payments. Fine, at least we must understand now that keeping a credit card is not a status, it’s a facility we can enjoy. Don’t misuse the facilities as ultimately we need to pay for them!!

Spend unlimited, even more than you earn

This was a slogan of a loan lending company. All the financial institutes were desperate to issue loans to the people for the reasons which had nothing to do with the loans. People started believing that there should be no limit to the spending. If the institutes are ready to pay the loans, why should we scare to spend? Advertises explained that you can get so and so in zero down payment and also with the lowest monthly installments. The words were so sweet that everyone started living in loan and the burden of loans was increasing desperately. People made their way and started spending more than what they were earning.

Ideally, they should be understood that people should spend only that much amount which they can afford. The moment spending exceeds earnings, the debit trap starts killing men gradually. People must come out of the tendency that we are living to enjoy only, it’s a myth in personnel finance, the truth is that enjoying is just a part of life, not the whole life!! Never spend what you can never earn!!

So, there are many more myths, but let’s stick to the habits of truths and make our life more and more stable financially!!