See the results of our 2021 Family Budget Survey. Click Here to Learn More!
5 Myths About Getting Rich That Hold You Back
What does it mean to be rich? Stacks of cash? Private jets to tropical islands? Chances are a negative connotation associated with money popped into your head.
But money isn’t evil. And making enough of it to be financially stable — with maybe a little extra left over for fun — isn’t either.
One way to set yourself up for long-term financial success is to unlearn toxic myths about becoming rich. Wealthy people don’t let negative misperceptions about money hold them back. So why should you?
Here’s a tip: Being rich is what you make of it. Stacks of cash to invest in your values. Private donations to charities. The sky’s the limit.
So how do you become rich, and what do you do once you get there? Here are five myths that financial experts commonly see.
No. 1: You need an Ivy League education to be rich
Steve Siebold, author of “How Money Works,” says many people buy into the idea that a formal education determines success and wealth later in life. But you don’t need an Ivy League degree to become rich.
“The wealthy respect formal education, but they know you have to tap any form of education available to make your dreams a reality,” Siebold says. “Whether it’s interviewing very successful people, reading, listening to audio programs, or attending seminars, self-education is a powerful tool.”
No. 2: Homeownership means you’re rich
Homeownership is a financial milestone, but is it costing you true wealth?
According to Laurence Namdar, a financial advisor for Asher Levi Financial, one misperception he sees frequently is that buying a house is a sure path to becoming rich. People whose homes are their largest asset are spending a disproportionate amount of money on homeownership expenses, he says. In fact, home costs are often the biggest budget-buster. These homeowners are missing out on returns from the sunken costs they could have invested instead.
“These financial pitfalls hold many people back from achieving optimal financial health,” he says.
Namdar suggests purchasing a smaller home and investing the savings in a retirement or taxable brokerage account. “Those funds compounded over time would likely achieve considerably greater returns than the net cost of a larger or more expensive home,” he says.
No. 3: Being rich makes life easier
Nicole Middendorf, CEO of Prosperwell Financial, says while people may think that having more money makes life easier, just the opposite is true — being rich can make things complicated.
“The more assets one has, the more issues you [have to deal with],” Middendorf says. Consider the effort required to manage expenses, assets, and liabilities across several businesses, for instance.
Middendorf’s tip is to create a financial plan with a wealth advisor.
“You sure can do it on your own, but there are so many things changing daily with the market and the economy [that] it is virtually impossible to keep up,” she says. So hire a qualified professional to keep track of your finances.
No. 4: Hard work alone will do it
“One of the most pervasive myths is this idea that wealth comes from hard work,” says James Pollard, founder of The Advisor Coach.
But that notion needs to be abandoned.
In today’s world, the old adage, “Work smarter, not harder,” applies more than ever. Because working hard is important, but your effort can go much further if you pair it with a savvy strategy. So take advantage of the digital reach of the internet to sell products. Consider business opportunities with the potential to grow into national or even global companies.
“The tip I have to overcome this myth is to encourage people to start thinking of ways they can automate and leverage systems to do the work part of the business for them,” Pollard says.
No. 5: Being rich is evil
Neil Roach, founder of Boxroom Office, was raised to believe that money is the root of all evil. It turns out this popular saying is rooted in an incorrect interpretation.
The dangers associated with this myth are that “wealth is wrong and wanting to be wealthy means you’re greedy,” Roach says.
The biblical text this quote derives from reads:
For the love of money is the root of all evil.
Parents often misquote this text, Roach says, unintentionally raising their children with a skewed perception of what it means to have money.
One tip to overcome this myth, he says, is to ask children what issue they would like to change in the world, and then discuss how to generate the income to make it happen.
Don’t let myths about becoming rich hold you back from success. Unlearn toxic misperceptions and build a healthy mindset.
Nicole Middendorf is a money maven, a knowledge junkie, and a born coach. She is an entrepreneur who left Morgan Stanley in 2003 to run her own wealth management firm. As a wealth advisor and certified divorce financial analyst with Prosperwell Financial, her main focus is to help people create wealth from the inside out. She is able to accomplish this through one-on-one client meetings, writing books, presenting at conferences, and appearing on TV, radio, and other media.
Laurence Namdar, Pharm.D., WMSSM, ACRE®, is an independent, fee-only financial advisor and owner of Asher Levi Financial. After personally dealing with six figures of student loan debt before achieving financial independence, he became inspired to help and empower others on their own financial journeys. He holds the FINRA Series 65 license and is determined to bring fiduciary financial planning within reach of Americans who have been underserved by traditional advisors.
James Pollard is the founder of The Advisor Coach, a marketing consultancy that helps financial advisors acquire more clients and grow their businesses.
Neil Roach spent more than a decade as a computer technician before working as an IT and communications trainer for a number of large corporations. Roach is now a freelance writer, aspiring author, and the founder of the Boxroom Office.
Steve Siebold had a dream of being financially self-sufficient as a child. Not knowing what separated rich people from the middle class, he interviewed more than 1,300 of the world’s wealthiest people over the last 36 years to study the thoughts, philosophies, behaviors, and attitudes of rich people. Today, he’s a self-made millionaire and the author of the book “How Money Works.”