5 Myths About Money I Busted After Bidding My Job Goodbye 6 Years Ago

By: Vishal Kataria
Photo by Mantas Hesthaven on Unsplash

It’s been almost six years since I’ve had a “job” job. I freelanced for a consulting company for a year, but it wasn’t really a job.

These years have turned out to be the most interesting roller coaster ride ever, though rollercoasters frighten me. They’ve been educative and made me evolve as a person at every turn.

I’ve had the freedom to do what I want. But I’ve also learned that I’m directly responsible for my actions. I’ve busted many myths in the meantime, especially when it comes to money.

I’m no expert on managing money yet. But I’ve developed a better perspective about this essential ‘means to an end’, and continue to learn.

Here are some myths I’ve debunked and lessons I’ve learned.

Myth #1: It’s Bad to Talk About Money

Talking about money makes most families queasy. They treat it like it’s a taboo. We’re taught that the only way to earn money is to study hard and get a good job. I grew up learning no different.

But when I interact with young businessmen, what stands out is their remarkable acumen to understand how money works.

For instance, my neighbor’s son was just in Class XII when he accurately knew how his father’s pharmacy business functioned, where they spent, and how government policies benefited (or hurt) them. Another friend has been making money from home by investing in the stock market for years. A third is a balance-sheet wizard.

When I asked how they developed this skill, each of them had the same answer: their parents talked about money ever since they could remember. Conversations at the dinner table, in the car, sometimes on holidays, their parents openly discussed the value of money and how to make it.

If we project money as a scarce and evil commodity, children grow up thinking likewise. But if children hear discussions about ethical ways to make money, their entrepreneurial spirit gets stoked. They also donate to charitable causes because money doesn’t become something they must hoard.

My dad, a businessman, tried the same when I was a kid. He would speak at the dining table about money. Unfortunately, my mother and I were too timid to understand him. How I wish I could turn back the hands of time.

Myth #2: It’s Not Difficult to Earn Money

I’ve heard many people say, “If I want to, I can make money easily.” An ex-boss was one of them.

He often boasted that making money was easy ‘if he wanted to’. And I believed him. I thought that the same would apply to me when I left the corporate world. I couldn’t have been further from the truth.

Is it difficult to earn money? You can bet every penny you have that it is. In today’s cut-throat world, millions are already doing what you want to. The sole differentiator between you and your competition is trust. Unless someone trusts you, they will not part with their money. This trust takes a lifetime to build, and seconds to get destroyed.

People trust their money more than they trust others.

It’s a mammoth task to make good money. Nobody will pay you what you ask for if you cannot make their lives better in some way. If you want to make money, start with adding value to people’s lives.

Myth #3: It’s More Important to Save Money

Being brought up on the conventional teachings of an Indian mother — study hard, get a good job, work hard — I learned that saving money is the most responsible task of a man.

No doubt, saving money is important. But earning money is even more important. See, saving money won’t protect you from inflation and contingencies. And you will come across challenging circumstances. Life is neither linear nor predictable.

Think about it like this. The average consumer inflation in India is around 10% annually. Banks give you 6% interest on your savings. So what’s happening to your money? Even though it’s in the bank, it’s losing value. Not to forget the amount you’re withdrawing for EMI’s, expenses and entertainment.

If you focus solely on saving money, your bank balance will dwindle until eventually, you’ll have to run on fumes. Not good.

Instead, pay equal attention to making money. Look at ways to expand your income, regardless of whether you are an employee or an entrepreneur.

For instance, early on in my entrepreneurial journey, I had to pay someone for services rendered. Instead of dipping into my savings, I took up a quick job, completed it in my spare time, and paid the person with those earnings. Impact on savings: Zero!

Myth #4: Buy When You Can Save

You try maximizing coupon codes or sale periods when you buy. After all, you hate wasting, right?

But guess what. People who manage their money efficiently are doing one better than you — They’re not buying what they don’t need!

Seeing messages about a “sale” or “loyalty coupon” doesn’t mean that you must take advantage of it. What matters is buying what you need, not what you want. By nature, man is an irrational animal. What you want, you almost certainly don’t need. And when you need something, you’re left with little money because you spent it on stuff you could do without.

Adam Ellis

I committed this mistake often until three years ago. Then I started applying the 30-day rule. For every non-essential purchase, I wait 30 days before buying. In those 30 days, I either realize how badly I need it and use the item well after buying it. Or I realize that I don’t need it and end up not wasting money on it.

Myth #5: Put All Your Eggs in One Basket

About 10 years ago, my dad cracked a large deal. My mother told him to put some money in a Fixed Deposit and take us on a foreign tour with the rest. Instead, he invested in real estate. Mom wasn’t happy, and neither was I. I wanted to see Germany. But dad said, “Paisa paise ko kheechta hai. (Money attracts money)”

It took me more than a decade to truly understand what he meant. Put all your eggs in one basket and it will develop a hole over time. (And you’ll be in BIG trouble.) In matters of money, like in life, relying solely on a single strategy often blows up in our faces.

Instead, you must invest in assets and enjoy life with the returns. Capital gains (from property, mutual funds, stocks etc.), dividends, rent and IPR are some examples.

I don’t invest in real estate, partly because the installments are exorbitant and partly because the return on investment is dismal. Instead, I invest in mutual funds and stocks. I’ve also started a content marketing agency and am working on making it self-sufficient enough to generate revenue by itself over time. Those returns will not pay off immediately but will improve my quality of life in years to come.