The Seven Biggest Lies About Wealth and Money

As you know, I wrote a famous book, Mental Models of Millionaire. If you are here you probably read it. In the book, we talk about how to program the mind toward a life of abundance. The goal is to create proper habits. We want to view money in a responsible way.

Today, we will do the opposite. I want to talk about what NOT to do. The world is full of bad advice and we will focus on the worst. It’s a fun and informative practice. 

Let’s review the seven biggest lies about wealth and money.

1. There is a fixed amount of wealth

It is a common misconception that there is a fixed amount of wealth in the world.

This comes from the idea that wealth a zero-sum game. It is often portrayed in the form of a pie. Zero-sum proponents believe that only certain individuals get the slices while others are left with the crumbs.

This is a very limited mindset.

Wealth is not a pie. Wealth is not a fixed amount. Wealth is something that is created. 

The unhealthiest part about this fixed mindset is that there is NO scientific merit behind the idea. 

Think about the universe. Think about how expansive it is. Our minds fail to comprehend its size. There are infinite amounts of power sources. There are infinite amounts of resources.  There are planets and asteroids that contain minerals and materials that we can mine for an eternity.

We live in a universe of abundance. We just haven’t figured out how to harness the potential.

2. Money is the root of all evil

 “Ethical wealth creation is possible. If you secretly despise wealth, it will elude you.” - Naval Ravikant

Money is not the root of all evil. Money is a tool. You can use it to create bigger and better things for the world or you can use it to destroy. Regardless of how you use, it is just an object.

Many will argue that money can turn you evil, but I personally believe money amplifies who you are. If you were a nasty person before you had money you will be an even nastier person when you have money. Money does not change you. The nasty factor was already there. It just amplifies you because will care less about what others think.

This is why who you are before you come into money matters. You must have a purpose.

3. Investing is Dangerous

Responsible investing always comes with risk but it is a risk that is well worth it. I have heard many people say the stock market is a casino. I do not believe that. Investing is not like gambling at a casino. In fact, it is the opposite. When you invest responsibility YOU become the house. The odds are in your favor.

You need to invest your money because cash is a depreciating asset. Money held in a bank is steadily losing to inflation.  Money invested in the stock market will always outperform (in the long run) money in the bank. 

Yes, the stock market does fluctuate. It has ups-and-downs. But you need to be in it for the long haul. That is something you must become comfortable with because time will always be on your side.

I like to think of money in the bank as soldiers awaiting orders.

Money that is not put in play is not making any gains. If you want to retire. You need gains.

4. Cheaper = Better Opportunity

Saving money is an automatic win. I cut unnecessary expenses. But this idea pertains mostly to luxury items and wants. They are just desires. You do not need them and you need to minimize their cost.

But, when it comes to necessary expenses (needs) low price often equals low quality. In many cases, you must recognize that you will get a better return on your investment when you pay more. 

Let me give you an example...

When it comes to food you should not always buy the cheapest. The cheapest foods are often highly processed, and sugary brands make you addicted. Instead, spend extra money. Buy organic, grass-fed meats. Buy fresh produce. Buy foods that will give you a healthy body.

In a way, food becomes an investment because, in the long-run, you will save money. 

I understand that many of you might want to save a few dollars. But you need to think about your purchase. Run the numbers. Be cognizant because the saying holds true, “You pay for what you get.”

5. Hard work = Money

From a young age, children are told a myth, “Hard work equals success.”

To an extent, I believe in perpetuating this belief. It is healthy to believe that success is linked to action. It is an idea that encourages risk and personal development. It is part of the growth mindset but it is not entirely true. 

Hard work is just the FIRST step. It is the beginning. Your goal is to make your money work for you.

I literally wrote a blog post about this last week. If you want a life of abundance you must be dedicated to building your investments. Make money while you sleep. 

6. Rich people are evil

 “Some of the nicest people I’ve ever met have also been the richest” - Steve Adcock 

I firmly believe this is cope. Poor people, who identify as poor, want to believe this lie.

This is an example of the “Us vs Them” mentality. It perpetuates a dangerous myth because all it does is keep people down. It discourages upward mobility. I view this as an extension of the “Crab in the Barrel” mentality.

Very unhealthy.

I once believed this lie. I grew up middle class and wondered, “How can you acquire money, if you are not ruthless?” It made sense to believe that all rich people were ruthless. But, as I have grown older I met some great people. Most of them are wealthy. Wealthy people tend to be very helpful, especially entrepreneurs. They focus on producing, not taking from others. Most entrepreneurs tap heavily into their creative instincts.

They want to leave the world with their imprint. That is a good thing.

7. Money will solve all your problems

Money will solve all of your financial problems but it won’t solve all of your personal problems. You need to solve your personal problems. They will not magically go away. 

Face it, wealthy people also have problems. A lot of it is caused by their mindset and hedonistic adaptation.

Let me tell you about a famous study:

In 1978, recent lottery winners were studied alongside recent paralyzed victims. Their levels of happiness were measured after each event. As you can imagine, the lottery winners were very happy and the paraplegics were not. But, it turned out that these effects were only temporary. Over time the joy of winning the lottery wore off. Once the thrill of the event was gone everyone accepted their new identity.

Both groups internalized the events. They processed them and their ideas of what made them happy changed. 

Remember, money gives you the potential to make your life better. But it is just a tool.

Tools alone cannot help you live a fulfilling life. It is up to you to solve your problems.