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A lot of people tend to believe myths especially
those that have been passed on from many sources. The more popular myths are,
the harder they are to dismiss. Myths that have gained mainstream popularity
are the hardest to dispel because a lot of people have already believed them to
be the truth.
To be wise about your money matters and avoid being
in a financial disaster, check these three money myths you shouldn’t fall for:
Myth No. 1: Your Money Is Safe In a Savings Bank Account
So you are able to set aside a portion of your income every month which
you put in a savings bank account. This is a myth that people recognizes. They
know that their savings can only be used on education, insurance, investment or
housing. Aside from such limitations, your money in the CPF account is
essentially trapped because of the maintaining balance your account has to
have.
So instead of keeping your cash in a savings bank account, which by the
way is insured only for up to a maximum of $250,000, it may earn more if
invested in other investment instruments. But before you dive into investing,
make sure that you have a good understanding of what you will get as return
from your investment. If you don’t have any issue keeping your money in a
savings account capped at $250,000 with a very low interest-earning rate, and
you don’t want to worry about investment risks, then the money myth may work
for you.
Myth No. 2: Invest In Home Improvement To Increase Selling Value of
Property
A lot of homeowners take this myth seriously. Buying a property is an
investment act in itself. That means, the value of your property is likely to
increase as it is. Some properties are able to increase their selling price
citing the latest home improvements done on the property. Because you have
invested in improving the property, it’s normal to factor in the improvement
costs to the total and general selling price. But it’s not a guarantee that a
potential buyer will agree to the price increase, especially if the
improvements made don’t really matter to them. You should focus more in
identifying if your property has easy access to important amenities such as
school, church, public transport, shopping and commercial complexes, and
hospitals. These are what buyers will look for and they will be amenable to the
property price increase based on these factors.
So before you venture into a grand home improvement plan hoping it would
boost the price and value of your property, check your property’s location
first.
Myth No. 3: Invest In Bonds For Retirement
You know that your money has more chances of earning if you invest them
wisely. But what sort of investment do you think should work for your
circumstances? Some people tend to believe that investing in bonds will
certainly secure your retirement needs. If you consult with a Financial
Advisor, most likely you will be advised to invest in stocks, mainly because of
the higher returns they give you. You just need to be cautious because stock
investments entail higher risks as well. Investing in bonds for retirement may
work for people who have lost the appetite for investment risks and prefer to
have their money secured and safe even without the magic number on investment
returns.
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