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Financial Planning

8 Urban Myths of Personal Finance

Don't believe everything you hear about your money.

Myth: You don't have to start saving for retirement until age 40.

Truth: The sooner you start saving and investing, the better.

See Also: Surprising Secrets of the Millionaire Next Door

Myth: Only rich people get tax breaks.

Truth: The tax code offers savings for middle- and working-class taxpayers for starting a family, education, home buying and retirement saving.

Myth: Gold is the best investment you can make.

Truth: A diversified portfolio will shine brighter.

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Myth: Social Security won't be around when you retire.

Truth: It will evaporate by 2034 if nothing changes, but incoming money from payroll taxes will still be enough to support about 75% of promised benefits.

Myth: Free trade deals are bad for America.

Truth: Trade and international commerce creates as many (if not more) higher-paying jobs, especially in the services industries, as it destroys.

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See Also: 10 Financial Decisions That Will Haunt You Forever

Myth: Tapping your 401(k) is a great way to borrow money.

Truth: The hit to your nest egg may be greater -- and last longer -- than you think.

Myth: Credit cards are best to be avoided.

Truth: Used smartly, a credit card will help you build a solid credit history and boost your credit score.

Myth: Only rich people need a will.

Truth: Everybody should have a will, even if only to spell out funeral and burial wishes.

Read more about the urban myths of personal finance.