There are several common misconceptions or "lies" about money and investing that parents often pass on to their children, either directly or through everyday phrases. These can shape limiting beliefs about wealth-building, risk, and financial decision making. Many parents may have seen their parents struggle to make ends meet or supporting their siblings and parents financially.
Drawing from various conversation sources, here are some of the most frequently mentioned ones, focused on those with an investment or broader financial angle:
1. Making money is hard (or "Money doesn't grow on trees")
This phrase instils the idea that earning wealth requires a lot of effort and is inherently scarce, which can discourage entrepreneurial thinking or smart investing. They also tell you things like ‘we are successful only in service’ – showing risk averse behaviour. In reality, building wealth often involves creativity, leveraging opportunities, and compounding returns rather than just hard work.
2. You need a lot of money to start investing
Many parents imply or teach that investing is only for the wealthy, requiring large sums upfront. However, this overlooks accessible options like mutual funds SIP, low-minimum mutual funds, or apps that allow starting with small amounts, emphasizing that consistency and time in the market matter more. Other than some shares like MRF, LMW, etc. buying one share may just involve a payment of a few thousand rupees.
3. Investing is only for experts (or too complicated for regular people)
This myth suggests that stock markets, mutual funds, or other investments are reserved for professionals, scaring kids away from learning basics. Truthfully, with resources like index funds, Etf, passive funds, and educational tools, anyone can start with simple, low-risk strategies without needing advanced knowledge.
4. Money (or wealth from investing) is the root of all evil
Often misquoted from religious texts, this teaches that pursuing financial growth leads to moral corruption. In fact, money amplifies one's character—investing can fund positive impacts like philanthropy or security, not inherently cause harm. At least in India where ‘Goddess of Wealth’ is celebrated in Indian homes. We do Lakshmi pooja, Kubera Pooja, etc. According to Ayn Rand, ‘Wealth is the root cause of all good’.
5. We can't afford it (implying permanent scarcity)
Used to deny wants, this can create a mindset of financial limitation, extending to avoiding investments due to perceived unaffordability. It ignores budgeting, prioritization, and how small investments can grow over time through compounding. The question to ask should be ‘what can I do to afford it’?
6. Hard work alone guarantees financial success
Parents often emphasize "work hard for your money," but this downplays the role of strategic investing, passive income, net-working, or economic factors. Many hardworking people stay broke without financial education, while smart investors can build wealth with less direct effort.
7. Free things offer the best value (discouraging paid investments)
This belief can extend to avoiding fees in investing (e.g., shunning managed funds), but low-cost or "free" options aren't always optimal—paying for quality advice or tools can yield higher returns. These myths can hinder kids from developing healthy investing habits, like starting early with retirement accounts or diversifying portfolios. Instead, parents can teach realities like the power of compound interest and risk management to foster better financial outcomes.