During the worst economic crisis in your lifetime, you’ve to remain strong to make the right financial decisions. One wrong decision is enough to paralyze your financial vehicle. And the best way to avoid making any wrong decision is to know about the common myths and facts. Here are some common myths you better be aware of to avoid a financial disaster.
Myth #1 Predict the future and buy/sell stocks
As we’re going through tough financial conditions where everything is uncertain, most financial experts advocate that consumers must never take the risk of predicting the future. What’s going to happen is always a delusion and if you take wrong financial steps by selling off your stocks while predicting the future, you may be making a wrong decision. Always listen to the advice of the financial analysts who’ll help you throughout the process of personal financial planning.
Myth #2 I am too young to face emergencies
You must always keep enough cash available for further use. As the financial circumstances are uncertain, it is always better for you to save money in a rainy day fund or may be an emergency fund. There are various guidelines that one must follow while saving money for the future. If you’ve the habit of saving money, you may not need to sell off investments during financial emergencies.
Myth #3 Financial planning is only for the rich people
Most of us think financial planning is out of reach. It is an extravagance most of rich people do. But this is a wrong concept. Financial planning is not depended on your earnings. Both who earn 30.000$ per year and 40.000$ per year need to focus on financial planning to secure financial future.
Myth #4 It is too early to think about retirement
If your company provides you a retirement fund and you’re not contributing money to that fund, you’re perhaps making the biggest blunder. Retirement planning is more important than planning your vacation and therefore, you must make sure you contribute a part of your monthly income to the 401(k) account so that you may secure a happy retired life.
Myth #5 Play a safe game with investment
Don’t play a safe game and invest your hard-earned money in one financial instrument. This is nothing but a financial blunder. Putting all your money can be dangerous at a time when the company is about to file bankruptcy and you can get completely wiped out. Most investment experts say that an investor must always diversify his investments so that he can spread his risks and bank on maximum returns.
Myth #6 I’m a lucky grand child
You’re really lucky if you’re expecting to win inheritance. But if you’re waiting for the day to receive the inheritance, and spending your present money extravagantly, then you’re in wrong way. You should know the proper way to manage wealth for your financial future. So it is totally a blunder if you’re waiting for the inheritance without knowing how much you’re going to win from your grand parent.
Lastly, try to upgrade your financial knowledge by reading some finance books. It is a process which will stay with you entire the life. So it is better not to think about the popular myth and step forward toward the proper financial goal. A proper financial planning can help you track your income and expenditure and also boost the amount of money that you save each month. The more you stay away from planning there have chances to lead a stressful financial life in near future.