InvestmentMyths about financesPersonal finances

Popular myths about personal finances which you should not believe in

Even though the education on finances is quite developed today and generally people have access to all the information they should know, there are still many false believes in various things connected to personal finances. Many of them actually do not allow people use many useful options available to customers.

Read this article and learn useful information which will give you new opportunities.

Borrowing money from a bank is a very bad idea

It is very good when a person has a serious attitude to bank loans and understands they have to be returned and the return almost always includes a rather high interest rate which means one has to return more money than actually was borrowed. This is great if you are aware of such things, because there are enough individuals who are rather careless when it comes to getting bank loans.

Still, it does not mean you should never take a bank loan. Everything depends on the purpose of such a loan and your real ability of returning money.

Some practices such as for example a mortgage for a flat or a house can help a person get his or her own place of accommodation without paying an entire sum of money which can be really huge at a time. For some people this can be a way better option than renting a flat or a house which is not cheap either. Yet, this will work out in the case if a person has a really stable income source. It is also crucial to understand that a situation can change at any moment and no one knows when it can happen. For that reason, getting into a bank loan can be accompanied by a special insurance which will give a person material help in the case if something happens to the individual returning the mortgage money back.

Some people also find loans for education helpful. On the one hand, this is a good way of investing money, however, it is also difficult to predict whether a person will be able to find a job after finishing the education.

What is absolutely obvious is that borrowing money for pure entertainment is never a good idea. For example, if a powerful computer is needed for your work, it is a sensible way of investing money, yet if it is needed for solely for playing video games, it is better to try to save some money for such a purchase. Purchasing a brand-new car with borrowed money can be especially risky since a vehicle can easily get damaged in an accident or even be stolen.

No matter what, it does not mean there are no situations in which one might find getting a bank loan beneficial.

Only people with large funds can invest money

There is another popular myth about money which stops many people from using all the potential of their finances. It is a strong belief in the inability to invest if one does not have large savings.

Undeniably, the more money a person can invest, the larger profits he or she can count on. At the same time, relying on the financial systems which promise you to earn gigantic amount of money with a rather modest initial sum is not a good idea. In the majority of cases, such systems are created by scammers who are trying to attract people and benefit from their small funds.

What is important is there is no need to wait until you become rich to start investing. It is a great idea to explore the investing mechanisms available for people with a modest budget and start increasing one’s profits gradually.

There is also no need to get demotivated by financial instruments offering investors moderate income since usually they are featured with small risks of losing one’s money. A great example of such a form of investment is purchasing the stocks of large public companies. They might not be thus profitable than the stocks of a promising start up but the probability of losing them is a way smaller.

Are you sure you know everything about bankcards? Check this article and get better understanding of bankcards!

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