The “facts” you’ve heard about money may not be as accurate as you think. One person asked financial buffs on the internet which common financial myths or misunderstandings drive them absolutely mad. Here’s what they had to say.
Note: Some quotes in this piece have been lightly edited for grammar.
1: Dodging Taxes
After one finance-savvy person got a surprisingly affordable haircut and commented on the price, they realized the owner hadn’t raised prices in 17 years since they wanted to avoid paying more tax. “I nodded and smiled politely but thought, “Avoiding paying tax is the stupidest reason to turn down income.”
2: Pricing Problems
One financially literate individual rolls their eyes when anyone believes the stock price is an important metric. “For some reason, that’s all my parents asked about when discussing stocks. I tried to explain it isn’t very relevant since the proportion is identical and the market cap is a better representation of the size of a company, but it went over their head.”
3: False Claims
One person thinks it’s ridiculous that Americans buy pointless things to claim when filing taxes. Another agrees. “There are a significant number of people who think ‘tax deductible’ means ‘I get the entire cost back in my tax return.'”
4: Throwing in the Towel
“I can’t retire til I am 67” is a common myth that one person is tired of hearing. “That’s just your age pension eligibility age,” they said. “You can retire whenever you like.”
5: Terrible Taxes
One person has a friend who moved back to Malaysia to avoid paying 30% of their income in taxes. “He accepted the take-home pay in dollars would still be much higher than in MYR, better quality of life, better public services, more opportunities, etc. But he couldn’t get over the idea of ‘losing’ that big of a portion of his income to taxation.”
6: Phone a Friend
One finance whizz wants more people to understand that doing taxes yourself is easier than it seems. Still, some appreciate the help. “I’m not certain that my accountant is saving me money compared to me doing it with some additional knowledge. But it’s certainly better than when I did it without knowledge.”
7: Turning Money Away
“I heard someone say they don’t want more money as it just means they’ll pay more tax,” one commenter said. “You are not ‘losing’ anything,” they explain. “Would you knock back a 50 million salary if it meant you were paying close to 25 million in tax?”
8: Don’t Lease It
One commenter says to think again if you believe leasing a car is a wise decision to save money on tax. “From my experience, the only people I met that have novated leases are those who are not great with finances.”
9: Do It Yourself
One commenter says that pulling yourself up by the bootstraps is more challenging than people make it seem. “Some people will undoubtedly have more obstacles to overcome, and comparisons are not always equal. Some people have better parents. Some people have better luck. Those three scenarios pretty much cover it.”
10: Throwing Money Away
One person thinks buying something just because it’s on sale isn’t the steal you believe it is. “They never really needed the item in the first place, so they’re actually losing money on a worthless purchase.”
11: Money Misunderstandings
One thing that drives a finance-savvy person up the wall is the idea that you can make considerable changes to net amounts with minimal changes to income or expenses. “But probably the two that drive me nuts the most are ignorance of the sunk cost fallacy and opportunity cost.”
12: More Isn’t Always Better
The financial myth that one person hates the most? “That you should get a credit card to help build a credit rating.”
13: Refinancing Woes
A commenter says they get frustrated when homeowners refinance a 30-year loan that has been paid down for a long time for a new term and claim they’re paying “less” in the new repayments. “They also have no clue about amortization or that interest payable on loans are calculated on the daily balance of the loan.”
14: Revved Up
One person doesn’t like when people say cars are inherently bad purchases because the underlying asset loses value over time. “This is true, but completely ignores the utility value of the asset.”
15: Get Schooled
A financially smart individual is sick of people who say they wish they learned how to do their taxes earlier because it would “make their lives easier now” but can’t remember how to “do long division, explain the anatomy of a cell, remember what started World War 2 or write an essay.”
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