for release Friday March 14, 2003
by Melodie Davis
A Slightly Cynical Look at Some Financial Myths
If I had just a little more money, then I would be happy.
Sound familiar? Did you ever think or say that? Many of us operate under certain financial illusions that I would like to dispel.
Karen Ramsey, author of a book Everything You Know About Money is Wrong shares a conversation she had with a multi-millionaire. This woman confessed she had so much money it embarrassed her. She said she could jump on a Concorde, fly to Paris for lunch, return in the afternoon, and the $8-9,000 wouldn’t cause a blip in her finances.
However, all that money didn’t really buy her more time than the rest of us because she has to manage her portfolio, attend to properties needing attention, manage a staff. “Having more money just means you have a more complex life,” she said. She also points out even bountiful friends don’t make her happy, because she never knows if they are being nice just for her money. She never gets to complain about a bad day, because no one believes her. As Ms. Ramsey says, even if you think such a person is spoiled and you’d like to have her problems, her wealth was still making her miserable
Other financial myths:
1. There’s lots of scholarship money out there. You hear this a lot when your kids start looking at colleges and financial aid. You hear specifically that there are scholarships that go unclaimed every year—but this is stated by professional scholarship search services who charge you a fee to come up with a likely scholarship source. (Most experts warn, don’t use these services.)
Now, while some of this may be true, (money goes unclaimed), it is also true that many scholarships are so targeted that a general studies major who is not sure what she is going to be isn’t going to find much scholarship money that she can apply for. So if you are the daughter of a disabled Korean War veteran living in Cook County, Illinois, whose mother worked for Sears and father belongs to the Lions, you may be in luck.
2. Earn and save money from part time jobs to help finance your college education. You may be better off volunteering for service agencies, and become heavily involved in extra curricular activities that “look good” on a scholarship application than spending all your free time bagging groceries. Your savings almost end up counting against you, unfortunately, in applying for financial aid. Furthermore, scholarship committees seem to place a heavy emphasis on service to school and community, even if the service was only the most perfunctory kind like “decorating for the senior prom.” Of course I happen to think having a part time job is way more useful in the long run, but that’s not how financial aid is set up.
3. Organizationally, another financial myth is that there’s lots of grant money out there, such as for non-profit organizations, churches, and “worthy causes.” Again, it is partially true, but the same criteria often hold true as for winning scholarships: you have to be in the right state or province, fit the cause the granting organization is wanting to support, be able to follow detailed directions, write winning essays, and generally do a lot of “building your case” which can amount to a lot of verbiage to put it politely—all of which requires time, commitment, knowing the right people.
4. Buy a house and then you can use your equity to move up to a bigger, better house. This is a myth because even if the price or worth of your home goes up, so has the price of every other house around you, so you need just that much more money to buy bigger. You can use your equity as down payment on a bigger home, but only if you want to take out another 25-year mortgage and be making house payments right on into retirement.
5. Everyone can pull themselves up by their bootstraps, and be a financial success. With today’s realities, better settle for “pull yourself up by your bootstraps, work hard, and settle for ‘financially squeaking by.’” Many people are about two paychecks away from being homeless.
These are just some of the things I would have liked to know 30 years ago when we were just starting out in the work world. Talking about money and how we deal with it with friends, colleagues and church groups can be a way to learn from each other’s mistakes and learnings.
What are the financial myths you wished you knew about? Write to: Melodie Davis, Another Way c/o Name\Address of YOUR newspaper; or e-mail: Melodie@mennomedia.org.
You can also visit Another Way on the Web at www.thirdway.com.
Melodie Davis is the author of seven books and has written her column since 1987. She taught feature writing and has won awards from the National Federation of Press Women, Virginia Press Women and the American Advertising Association. She and her husband have three daughters.
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