3 Myths About Investing - Part 4

This is the final installment of our 4 part series about money and investing myths. The goal of this series is to clear the weeds from our minds as we seek truth in our quest for financial independence. Read along and make sure that you go back to prior articles to find anything that you missed the first time around.

Myth #10) You can’t invest if you don’t have any money

We’ve all heard the statement, “You have to have money to make money.” While almost accurate, the statement is not entirely true. You don’t need MONEY to make money, you need CAPITAL to make money. Capital is anything productive asset that can be allocated toward investment in the quest to increase the value of that capital base overtime. For example, a man with $10 million dollars worth of chickens is wealthy, even though he has no cash. He can use those chickens to lay eggs, which can be sold for money on the market.

Any time you invest a scarce resource of value, you’ve become an investor. The less cash you have, the more creative you have to be in finding those assets that will form your highly critical capital base. Your capital might be human capital coming from training your children to do a job for you. It might be your own time, energy and passion invested in achieving your goals. The fundamental reality is that your most valuable assets are non-financial. Your health, your love, your happiness are all assets that you might not share for any trivial amount of money. So, the truth is that you were a billionaire on the day you were born.

Myth #11) Money can’t buy happiness

While it might be debatable whether money can buy happiness, one point is beyond debate: a lack of money can CERTAINLY buy unhappiness. Families can be ripped apart due to financial problems, and most of us spend a large percentage of our time worrying about our financial woes. Additionally, I must agree that money alone certainly can’t buy happiness. It is the creative and intelligent use of money that can buy happiness.

Money can allow a young mother the chance to stay home with her children. It can allow a son to pay for his father’s critical surgery. It can provide the peace of mind that comes from financial security and economic freedom. The truth is that money can certainly be a tool for the enhancement of your life. But while it can enhance your life, it can also destroy your life if you do not know how to keep things in perspective. Families that become obsessed with the acquisition and maintenance of wealth can find themselves losing focus on the things that matter most in our lives: family, love and happiness. So, remember: some of the richest people in the world don’t have any money at all and some of the poorest people in the world have billions.

Dr. Boyce Watkins is a Finance Professor at Syracuse University and author of “Financial Lovemaking 101: Merging Assets with Your Partner in Ways that Feel Good”. For more information, please visit www.DrBoyceFinance.com.