4 Pieces Of Financial Advice That Will Lead You Nowhere – According To An Economist

Financial advisors are ubiquitous; hang out with your friend or a family member, and you will be bombarded with so-called money tricks and shortcuts. Accompany your colleagues in the bar, and you will see everyone giving you money tips and tricks. Well, regardless of who they are and their financial background, they are always ready to bequeath some financial wisdom to others.

More often than not, these tricks (or shortcuts) do not work out. After all, there is no shortcut to anything in life. You will have to pay the price to achieve what you aspire for. And when it comes to money, there are no exceptions either.

Pixabay / Pexels / Most money tricks and so-called shortcuts fail badly simply because they are false.

James Chio, a Yale economist, unleashes all these myths about money. He argues that most money lessons and so-called tips are unrealistic. Ironically, the ones who give out these tricks are not very well settled. Look at their financial background, he suggests. And you will figure out that you are better off without their suggestions.

With that said, here are four common pieces of financial advice that are not worth following, according to James Chio:

1. You Should Be Cash Poor & House Rich

The first myth that people are told is that they should live in lavish mansions to become rich. The truth is that it is otherwise. Think about it: If you live in a lavish house, it is a liability. You will likely spend more money than make something out of it.

Ibrahim / Unsplash / Living in a lavish house is NOT a sign of being rich; nor does it make you one.

So, do not fall for the false advice. You need to understand that the house you live in is a liability. There comes the mortgage, the costly bills, the renovation, the maintenance, and so on. Instead, be cash rich and house-poor. You do not have to look rich in order to become one.

2. You Should Look Rich Before You Become One

If there is one thing common among all multimillionaires, it is the fact that they live a simple lifestyle. They do not complicate simple things like dress, car, or house.

Ron / Pexels / You do not have to look rich in order to become one.

So, try the reverse. Appear poor while you are rich deep inside. Do not spend lavishly on things that do not matter. Instead, save that money and invest it in something that can go a long way.

3. Do Not Spend Money – Even If It Is On Your Career

When it comes to saving money, there are lots of tricks told by the so-called gurus. Spend less, they suggest. While that is fair enough, they go to the extent to say that you should not spend money even on your career.

If you do not spend money on a long-term career, the savings will vanish one day. And you will find yourself in a trap. So, do invest in a career that will go a long way for you.

4. Millionaires Are Born With A Silver In Their Mouths

The truth is that they are not! Look at the background of Mark Zuckerberg, Elon Musk, and Bill Gates. None of these were with a silver spoon in their mouths.

Rather, they worked for it and earned it. The same is true for you. If you are born into a well-to-do family, good for you. If not, work for it and earn it.