Debunking The 25 Most Outrageous Money Myths (part 1 of 4)

I thought I’d take WriterDad’s advice in cooking this one up thinking that [My] Baby’s Born in the Rough Draft. You raise it in the Rewrite“.  I’ve been working on this post for cumulatively about a month.  A change here, a new post here, realization here, but I’m done.  I could come up with 2,380 myths to only find another 13 in that search, so that’s it, I’m done with it and hope it rings a few bells for a few folks…Let’s start off on the philosophical myths and get down to the real “roots” of money…

1. Money Is The Root Of All Evil

No it’s not. You can say that for anything. I think that bad attitudes are the root of all evil; or evil thoughts are the root of all evil. I can go on, but I’ve got a long list to go through.Diving in to this one a bit more though, and taking a philosophical approach to why people say it – You get to put yourself on the higher moral pedestal than the people with the money by taking a shorter cut and you’ll look for evil when money is referenced. Money does bait people to do bad things, but it’s not the money that is doing it, I think it is the person offering the money that is “the root”.I can vouche I’ve wanted more money before and blamed those that actually had it, but who am I trying to convince? Ultimately with a little introspection, just myself it appears.Sign me up for more money, I’ll take on the challenge of proving it is not the root of all evil.

2. Money Can’t Buy Happiness

Can’t it? Really? Again this is similar to the statement above and can get into a philosophical or semantic debate over what it means.Certainly it can’t “buy” an emotion. But it can buy things that lead to an emotion. The same way that having no money leads to unhappiness. The lack of money didn’t make you unhappy, the lack of emotions money can provide contributes to your unhappiness.

3. If I Became Rich, My Friends Will Be Resentful Of My Success

Seriously? If that’s the only reason you’re not trying to get ahead in life, you might find benefit in re-evaluating your priorities. If your friend resents you for your successes, they may not be your friend after all. You may feel the need to be better than them at some financial aspect and it’s not abnormal to want that, but to actually resent you is not “friendly”.

4. You Get What You Pay For

So to get on my soapbox a little, just because a product is higher-priced does NOT always mean it is higher quality. Take a stock for example, just because Microsoft stock falls a few bucks over a time doesn’t mean that it is any worse company. If you bought it at $20 and it dropped to $10 and then shot up to $40 dollars, how do you determine that “you got what you paid for”?Take generic drugs for another example. I really don’t know anyone that goes with the name brand stuff anymore. Thousands of people (and myself included) can validate that they do the same thing. The big name companies aren’t targeting the bargain shopper though in their sales, they’re targeting this myth that people still hold on to.How about beer? It’s completely left up to the taster. I can’t stand Guiness, but I have several friends that won’t drink anything else. I’m a Bud man myself. I think it’s delicious and think the $7.99 I pay for a case is well worth it and paying MORE for the 12 pack of Guiness costing me $15. I would say I’m NOT getting my moneys worth in that situation.As a final example, how about a website you regularly visit? If you’re visiting it regularly, you must be getting something out of it. “Something” isn’t “nothing” and “something” is more than the $0 you’re paying to view the info it provides.

5. If I Get Just a Small Raise, I’ll Move To A Higher Tax Bracket, Get Taxed More, And Take Home Less Money

Absolutely not true. When you move into a higher bracket, ONLY that amount you make IN THAT BRACKET is taxed at that amount. So for example, your old salary was $30,000 a year and your new salary is $35,000 a year. According to the IRS’s 2007 federal tax rate schedules, when your salary was $33,000, your marginal tax rate was 15%. With a salary of $33,000, your marginal tax rate is now 25%.Based on this info, your first $31,850 of income is taxed the same way it always was was before you got your raise. With a $30,000 income, your take-home will be $25,891.25. If you make $33,000, you will take home $28,326.25. This is because only the extra $1,150 above $31,850 is taxed at 25% – not the whole $33,000.

6. Tis Better To Give Than Receive

If you believe this, I’m happy to be the “givee” of your money or other gifts worth giving. Digging deeper philosophically again, neither is better than the other. If you think about it, neither can possibly be better than the other because every time someone is giving, someone is receiving. Being a bad receiver doesn’t make you a good person, or for that matter, a good giver; it just makes you uncomfortable about receiving.Now don’t get me wrong, I give a good chunk to a lot of charities, but I’m just debating the money myth that it’s better to give than receive, and I enjoy giving, but I’m a big fan of receiving too.

Continuation

Stay tuned tomorrow for the remainder of the  Debunking The 25 Most Outrageous Money Myths series!

photos by: digidreamgrafix.com??103 Per Ola Wiberg (former ponanwi and Powi)Elfboymckaysavage,Ravenellesaschapohflepp,

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  • http://www.gatherlittlebylittle.com Glblguy

    Regarding #1, that phrase is from the Christian Bible (1 Timothy 6:10) and is often misused/misquoted. It doesn’t say “Money is the root of all evil”, but “The LOVE of money is the root of all evil”.

    I know you were necessarily misquoting it, but wanted to clarify the origin and the correct quote.

    Great list and perspectives, look forward to see the rest!

    Glblguy’s last blog post..Frugal house cleaning

  • http://momgrind.com/ Vered – MomGrind

    Interesting thoughts, especially because they do touch on a more philosophical side of finance. Looking forward to the next installment!

    Vered – MomGrind’s last blog post..You Read Women’s Magazines? I’ll Give You Ten Reasons To Stop

  • http://writerdad.com Writer Dad

    Hey, I love my words being used in this context. Thanks a lot. Talking about money is one of my favorite topics. People just aren’t responsible enough. Good job.

    Writer Dad’s last blog post..I Link You!

  • http://20smoney.com Kevin

    I heard an interesting way to look at why it’s better to give than to receive: you’ll never regret helping somebody out that needs assistance but you definitely will regret some purchases you make for yourself.

    Like the post and pumped for the next ones.

    Kevin’s last blog post..Young Money: A Gameplan For Your Money As A Young Adult

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  • http://www.youngdough.com Blake

    I always chuckle when I hear number 2. No, money cannot directly buy happiness, but it can provide the freedoms and the security necessary to better pursue our happiness.

    Blake’s last blog post..What Are You Doing With Your Economic Stimulus Check?

  • http://orange4money.blogspot.com/ Orange

    Very good post, very true. Number five is my favorite.

    Orange’s last blog post..9/11/2008

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  • http://www.TheEssentialsOfTrading.com/Blog John Forman

    I think you mean to have meant “If I Became Rich, My Friends Will Be Resentful Of My Success” for #3 – “will” rather than “wouldn’t”. At least that’s what it seems like you mean from that entry.

    I’ve always found #5 a complete joke.

    John Forman’s last blog post..Does coaching of trading psychology, require a successful practitioner?

  • http://www.jonkepler.com Jon Kepler

    #2 bothers me, not just because it’s misleading (as you said), but because the people saying it usually have a problem with anyone who has more money than them. “Neither does resentment” would be a good retort.

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  • http://www.tutable.com Investing Social Bookmarking

    Hello and nice money myths article. I just social bookmarked this article!

  • http://www.readysetreadreviews.blogspot.com RebekahC

    Very interesting article. I agree with you spot on with every one. I especially liked your take on the high tax bracket. That’s one I actually didn’t know. I’m happy to hear the myth was wrong. Thanks for spending so much time editing and reworking your thoughts to come up with the great share.

    RebekahC
    littleminx at cox dot net

    RebekahC’s last blog post..Baby Animals by Jim Pipe

  • http://iluvcontest.blogspot.com Sherry

    another great post and I agree that money is the root of all evil. Even between family member.

    Sherry’s last blog post..Advance Christmas Giveaway@Wonderful Things in Life

  • misanthropope

    it takes facts and/or reason to “debunk” anything. you’ve got some straw men (opinions that almost nobody holds) and you totally fail to say anything more substantial than “i disagree”.

    completely worthless post.

  • http://www.jonkepler.com Jon Kepler

    Misanthropope, which points specifically are “straw men”-like? There was a lot of substance in this post, but apparently it was lost on you.

  • http://myinvestingblog.com hank

    @misanthropope – Thanks for stopping by and participating! Sorry the post didn’t meet your expectations, but I’m going to have to disagree that I failed to say anything but “I disagree”.

    Even if I agreed that everything I disagreed about wasn’t in context to the proper use of the word “debunk”, then I’d have to disagree with the definition writers over at Merriam Webster because it seems to roll off the tongue really well!

  • http://myinvestingblog.com hank

    @John Foreman – Good call. Changed and duly noted.

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  • http://www.canicleanit.com Cleaning Tips

    Nice and usefull post, thanks, this is one for my bookmarks!

  • moloko+

    The german literary critic Marcel Reich-Ranicki said: “Money doesn’t make you happy. But it’s much more sufferable to cry in a taxi than in a tramway”. That’s the best way to express the relation between money and happiness.

    Thanks for your post!

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