Common Financial Myths: Burst Your Bubble


Does reading stock market news gives you the chill that it’s not your cup of tea? Do you dream of buying a house as soon as financial possible because that seems a better option than renting one? Well, then it’s time to burst the bubble.   

Youngsters often receive financial advice through financial gurus, podcasts, and YouTube videos in the digital era and still fail to implement them. There are a lot of restraining factors that one might think about before taking any financial step.

Our minds tend to follow the trail set by our older generation and possibly think of that as a safer option.

But, in the era where Nikhil Kamath is the youngest billionaire investor at the age of 34, pinpoints that the financial world has changed a lot.

Even with the availability of thousands of financial advisors today, many individuals live in their financial bubble.  

Here are some of the myths one should stop believing right now.  

You need to invest a lot of money

Investing might not seem like an option for an individual who recently started earning or one with ‘I don’t have enough money.’ It is one of the common myths believed by many. But in reality, beginning a SIP cost less than a Starbucks coffee.

Today, one can start to invest with Rs. 100 per month. Doesn’t it sound like a piece of cake? Many are not aware of the concept of compounding, only why every financial advisor emphasises early investment.

Early the investment more the compounding! The magic of compounding allows the money to snowball and helps small investors grow exponentially over the decades. So now you know you don’t have to wait for the increment to be an active investor. 

Owning a house is better than renting one

Owning a house is considered a milestone, especially in India, where most financial decisions are measured emotionally rather than rationally.

One might think buying a home as soon as possible than renting one will be ultimate financial freedom from the monthly rent, especially at the start of a career.

But people often forget the dreading EMIs they will end up paying half of their life. This not only disrupts the current financial planning but also affects the future necessary investments and expenses.

Owning a house with poor future planning and EMI calculation can exhaust one emotionally in the long term.

Renting a home at cheaper rates helps to focus on investing the savings and buying a better option in future.  

Gold investment is the best

One of the typical advice an older generation would give is to invest in gold. Many believe investing in gold is safer and is a future reinforcement. 

In reality, with India’s increasing 5.9% inflation rate, gold will not help an individual in the future.

Gold does not have much appreciation when compared to escalating inflation every year. Whereas investing the same amount in other financial securities such as mutual funds can give up to an average of 12-15% interest.

For instance, mutual funds offered exceptional returns of 30% for the year 2020-21.  

The stock market is a scam

Studies show only 3.7% of Indians invest, which is lesser than mind-numbing around 56% of American investors.

One of the typical myths imprinted on the Indian mind is, the stock market is risky, and an individual is bound to lose money. Such myths are nothing but a lack of basic financial knowledge.

True that the stock market is volatile, but it does not necessarily drown money. Today, secure financial securities such as fixed deposits are not enough to beat the rising inflation rate. The stock market allows gaining returns that are not offered by other securities. 

The stock market returns often make people greedy, leading to impulsive decisions.  

Nevertheless, one should consider the risk-management capacity before investing and thoroughly understand how it works.

Great investors such as Mr Rakesh Jhunjhunwala exemplify patience and consistency in the stock market with full awareness. 

Retirement planning is not for a youngster

Most young individuals don’t even think of retirement in their early 20s or 30s. In reality, retirement planning is a long-term process that one must start from the inception of their career.

As mentioned above, the snowballing of consistent SIP can give unbelievable returns in future. Spending recklessly in the present will cost in future, especially with plunging value of money every decade.  

One should not overburden themselves with financial planning. Planning an asset allocation is not scary and dreading as it sounds.

Also, saving your small portion of income does not mean you have to cancel your Maldives vacation.

Many plans, save and spend accordingly every year. Think thoroughly before taking any investing step and learn the risks and benefits associated with it.

As many says, the right time to invest is now. Most importantly, enjoy your spendings along with sound investments.  


Shivani Ankush
Shivani Ankush
I grew up reading fictional stories, and I always had an imaginary situation in my mind which I often used to pen down. Eventually, I started writing short stories. Now, here I am, writing what makes me happy. I aspire to explore my writing side to my full potential because I have chosen to struggle with what I have loved since my childhood.



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