Monday, March 2, 2009

If something you’ve always thought to be true, turned out not to be true; when would you like to know?

I ask this question because most of what majority of the American public have come to believe as financial truths are actually MYTHS.

1) Qualified plans like 401(k)s and IRAs always provide the most attractive retirement benefits.

2) The test to determine whether you should participate in your employer’s sponsored retirement plan is if your contributions are matched.

3) In order to grow a sizable nest-egg, you must invest directly in the stock market.

4) Diversify your portfolio and then focus on the long-term - Over the long-term you’ll always end up great.

5) When your stock or mutual fund portfolio goes down
in value due to market downturns; it’s only temporary. Don’t fret you’ll always recover.

6) You’ll be in a lower tax bracket when you retire.
7) Lower earned income means lower income taxes.

8) The Roth IRA is the best income tax-free vehicle there is.
9) Some financial gurus have the ability to predict the future of the stock and real estate markets.

10) When purchasing a house, make the biggest down payment you can afford and secure the smallest possible mortgage.
11) 15-year mortgages are better than 30-year mortgages.

12) The best way to pay off a house is to apply extra principal on the mortgage.
13) Paying down your mortgage aggressively enhances the value of your home.

14) Homeowners are not safe with high mortgage balances in relation to their house values.
15) Home equity is a prudent and safe investment.

I am not even going to try to guess your reaction. Here is the truth:

All of them are MYTHS!

This is what I can promise you right now: That over the next several weeks (and months), I will discuss each of them and give you the FACTS.

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