Everyone grows up with certain rules and thoughts about money, passed down from family members, relatives, neighbours, and friends. These rules shape the way we save, spend, and build wealth long before we receive our first pay check.
However, when we start managing our own money, many of these familiar ideas no longer fit today’s costs, risks, or opportunities — yet we continue to follow them because they seem safe and socially acceptable.
The big question is: what if some of these “good” habits are quietly holding you back financially? What if the very rules we’ve followed for so long are actually preventing us from growing wealth? Let’s explore them.
Myth 1: “FDs Are Safe” (The Silent Inflation Trap)
We have been told that the best way to keep your money safe is by saving it in a savings account or a fixed deposit (FD). It was reasonable then because you could earn higher returns on your investments and your costs of living would be less expensive. However, today, the impact of inflation on money just sitting idle makes this idea far less reasonable.
At 6–7% ‘real’ inflation (let’s not get tied down to official numbers), an FD earning 6–7% does not actually grow your money. It just slows down the growth. Your returns just about keep up with rising prices. The fear behind this myth is losing money; however, the real biggest loser over the course of many years will be if you don’t invest.
To build wealth in modern times, you need a combination of both: safety and growth – rather than safety alone.
Myth 2: “All Debt is Bad” (Why You Need ‘Good’ Loans to Grow)
Many Indians consider borrowing money to be an embarrassment. That is mostly due to very high interest rates from the 1990s through the 2000s. Today, taking on debt does not always have to be negative.
Taking out a mortgage, a student loan, or a small business loan could be just what you need to increase your rate of progress. Unplanned, high-interest borrowing that takes away too much of your monthly income presents a potential problem for your finances.
The type of borrowing (good/bad) is far more important to understand than whether you should take on debt in general.
Myth 3: “Gold Is Best” (Why It Fails to Build Wealth)
For centuries, gold has represented security and stability; it still does today. Gold will protect you from inflation, maintain its value during times of economic crisis, and provide solid returns over time.
The problem exists because many believe that gold can be an adequate investment by itself.
Investing in physical gold involves additional costs associated with fees for making charges and/or storage challenges which can lead to less liquid assets. Gold can serve as a good hedge; however, it cannot compete with long-term growth potential of diversified investments such as equities and/or mutual funds.
Gold is a valuable investment – but a better way to use gold is within a comprehensive financial plan rather than as a sole strategy.
Myth 4: “Stocks Are Gambling” (The Difference Between Speculation & Strategy)
Many of us have seen friends or family members lose money due to emotional decisions — unverified tips, impulse stock purchases, or investments in an IPO. That is speculation, not investing.
The difference between speculating in the stock market and long term investing is simple: investing is a disciplined approach to using data to make informed, strategic decisions, while speculation is a spontaneous, uninformed decision made without strategy or data.
What is important here is developing a consistent pattern of investing over a period of time rather than relying upon a single method of investing. In the long term, combining SIPs with strategically timed lump sums and top ups will provide a more efficient and steady means of growing an investor’s wealth.
Myth 5: “Rent Is Wasted Money” (The Mathematics of Buying)
Buying a home was traditionally considered the best financial option, and still offers a great deal of stability, long-term security, as well as the satisfaction of owning property.
However, today’s housing market is vastly different from previous markets; in many cities, prices are so high that a large number of potential buyers cannot afford to purchase a home, while at the same time rental prices have risen as well, creating confusion about what is really “best.”
Renting provides flexibility, and typically lower initial costs when compared with purchasing a home; however, purchasing a home creates long-term confidence and stability, as long as one can afford it.
So there’s no universal rule. Buying isn’t always better, and renting isn’t always smarter.
Myth 6: “Insurance Builds Wealth” (The 5% Return Trap)
Many people are confused about what insurance does and how it relates to other ways of growing wealth (investing). Many traditional types of insurance, such as endowment plans or money back policies are being sold as “a safe investment.” The problem is that the return on these types of products is very low, usually around 4-5% per year.
The primary purpose of insurance is to provide financial protection for your family when unexpected events occur; the primary purpose of investing is to increase your overall net worth.
When you try to use one product type (insurance) to achieve multiple goals (protection and investing), you will typically be left with sub-par protection and below average returns. Separate the two so you can get the best of both worlds – solid protection for your family and true growth potential for your assets.
Myth 7: “You Can Save Your Way to Rich” (Why Income Matters More)
For many of us, growing up was about being constantly reminded “to save”. We had to be restrictive – “don’t buy that,” “cut back on that,” “be in control.” Although some self-control is needed to build wealth, it cannot be achieved solely through restriction.
You may only be able to cut back on so much expense, however there are no limits as to how fast you can increase your income or grow your investments. Therefore smart saving is a combination of controlling your expenses, maximising your income, and automatically investing for long-term success.
Ultimately, a balanced approach of wise spending combined with increasing income and consistent investing will always produce better results than extreme frugality.
Myth 8: “I’ll Start Saving Later” (The ₹2 Crore Cost of Delay)
A lot of Indian families put their money into three things first: weddings, education, and owning property. Retirement is often the last thought. If you start saving for retirement early, you will have a lower monthly investment than someone who saves the same amount but starts at a later age.
For example, if you start investing ₹5,000 a month at age 25 with an expected 12% annual return, you could accumulate around ₹3.2 crore by age 60. Start at 35 instead, and to reach a similar corpus, you would need to invest roughly ₹12,000 per month.
Retirement savings is based on time not amount. The sooner you begin to save for retirement, the longer you allow compounding to work in your favour. Time is something that cannot be earned back.
The money lessons we grew up with are full of good intentions, but some of them are outdated or misleading. Recognising these myths and questioning long-held beliefs is the first step to financial freedom. When you combine knowledge, patience, and smart choices, your money works for you — not against you.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Please consult a qualified professional before making investment decisions.