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When it comes to building wealth, everyone has something to say. There’s no shortage of myths masking as solid advice. From financial advice from random TikToks to unspoken “rules” that everyone has somehow adhered to, it’s easy to get lost in the noise.
In this post, let’s unmask some common myths about building wealth and explore what actually works.
Trick: “Debt is always bad.”
Treat: Smart debt can be a wealth building tool too. The key is knowing the difference between productive (like a mortgage on a rental property) and consumptive (think high-interest credit cards or BNPL traps) debt.
You can magnify your returns when debt is used responsibly. Say you took out a mortgage on a rental property that earns more in rent than it costs to carry; that’s leverage.
The trick is to make sure that the debt is working for you and not the other way around.
Trick: “You need to be an expert to invest.”
Treat: Simplicity is the key. Many Canadians hold off on investing their first dollar because they feel like they’re unprepared.
“I don’t know anything about investing.”
“I can only spare $30 a month on investing.”
The truth is, you don’t need to be a stock market genius to start. Automated tools can help you invest consistently without the need to time the market or hand pick every stock. This could also help with biases that we all carry without even noticing how it’s affecting our decisions.
The real secret is to start early and invest regularly.
Trick: “Real estate is always a safe bet.”
Treat: The safest bet? Diversification.
Real estate is not immune to volatility. A lot of factors make real estate less of a sure thing like rising interest rates, liquidity risks, etc. Putting your wealth in one basket can leave you overexposed. Especially something that’s location-dependent.
Instead of relying heavily on one asset, it’s better to diversify across different classes: private credit, fixed income, and real estate just to name a few. But never just one. A balanced portfolio can better weather volatility and allow you to seize more opportunities.
Trick: “Timing the market is the key to having huge returns.”
Treat: Time in the market is more important than timing it. It might feel like you’re being proactive by trying to time the market but it often backfires. You can miss the market’s best performing days which are hard to predict.
Important footnote & disclaimer:
The information contained on this website and in any related materials, including but not limited to blog posts, charts, statistics, projections, or other content (collectively, the “Information”), has been prepared by goPeer for general informational and educational purposes only. The Information does not constitute, and should not be construed as, an offer to sell or a solicitation to buy any securities or investment products. The Information does not constitute legal, tax, investment, financial, or accounting advice, and should not be relied upon as such.
Any tables, charts, forecasts, forward-looking statements, or statistical analyses presented are based on assumptions, estimates, or projections made by goPeer that may not reflect actual future performance. These forward-looking statements involve known and unknown risks, uncertainties, and other factors (many of which are beyond goPeer’s control) that may cause actual outcomes to differ materially from those expressed or implied in the Information. Actual results may vary significantly, and past performance is not indicative of future results.
No portion of the Information should be interpreted as a recommendation or endorsement of any specific investment strategy, security, loan, or product. Investment decisions should always be made based on the investor’s individual objectives, financial situation, and risk tolerance, in consultation with appropriate legal, tax, and financial advisors.
Investing involves risk, including the possible loss of principal.
