The day you receive your first paycheck is the day your Google search list is filled with myriads of financial tips and tricks. True, isn’t it?
TBH, it’s pretty natural to ponder over the future, and it’s great to take advice from friends and family or blog and social media. But the turn-off is, not all information available online is applicable in real life. Worse, much of it is far from accurate! Obviously, for an amateur, it’s nearly impossible to know what’s right and what’s not when it comes to money. You can easily get overwhelmed with the plethora of so-called “facts” floating around.
So what should you do? Well, the best strategy would be to consult the pros. The only one who can offer the best financial solution is a financial advisor. Plus, here’s a list of three recurrent money tips that you should avoid right away if you hope to save a decent amount of your income.
#1 – Nope! Cash isn’t the king
A big misconception that financial advisors suggest ignoring is the thought that cash is king. Experts say they often come across people who start holding cash in their accounts as soon as their wealth increases. But, that’s not the correct way to go about it!
With higher inflation and creeping interest rates, having more-than-required cash actually takes you away from your goals. Therefore, you should ideally take your money for a tour. It could be through a retirement account, brokerage account, investment, or some other way. But you should give your money wings to fly, and it will multiply!
#2 – Buy your dream house but keep a check on your budget
Way before one achieves financial independence, one plans on buying their dream house. And in the moment of actualizing their dream, they make the biggest mistake of buying a more expensive house than they can actually afford.
We understand that buying the house of your aesthetics is your dream, but if your monthly mortgage is consuming a chunk (say 40% or 50%) of your net income, how will you manage the other expenses? Remember, a beautiful house is fancy, but you won’t be able to cut down your health, living, and clothing expenses. And these are eternal expenses! So, it’s of utmost necessity that you prepare a budget that’s feasible and then move forward.
#3 – Claiming social security too early won’t help
Another common misconception that people have is that it’s best to claim social security benefits as soon as they’re eligible. That’s very wrong indeed!
Firstly, there’s a very low possibility of the funds being depleted. But even if they do, most of the social security benefits are paid by proceeding employee and employer payroll taxes. Financial wizards recommend that you should wait till you’re 70 before you touch your social security funds. This would ensure that they benefit from a higher amount if they are prospering all fine.
Wrapping it up
We admit; maneuvering through a stable financial life is difficult. It requires good guidance and patience, and a minor mistake can land one in great trouble. But as long as you’re learning from them, rest assured, you’re growing!