11 Myths About Personal Wealth You Shouldn’t Believe

&l;p&g;For many people, a long-term goal is to amass and maintain personal wealth for financial security. There are many different paths to get there — savings, investments, passive income, etc. — and there are plenty of &q;rags to riches&q; success stories to inspire people&s;s financial aspirations. But there are also many myths about wealth that color the perceptions of those who wish to attain it.

We asked a panel of&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;http://forbesfinancecouncil.com/&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Forbes Finance Council&l;/a&g;&l;span&g;&a;nbsp;&l;/span&g;members about the biggest and most common misconceptions about personal wealth and the important correct information individuals should have instead. Their best answers are below.

&l;img class=&q;size-large wp-image-2936&q; src=&q;http://blogs-images.forbes.com/forbesfinancecouncil/files/2018/05/11-Myths-About-Personal-Wealth-1200×915.jpg?width=960&q; alt=&q;&q; data-height=&q;915&q; data-width=&q;1200&q;&g;&l;em&g;Members discuss common myths surrounding wealth management.&l;/em&g;

&l;b&g;&l;span class=&q;il&q;&g;1&l;/span&g;. Your salary doesn&s;t matter; true wealth is living off passive income.&l;/b&g;&l;span&g;&a;nbsp;&l;/span&g;

Most people believe personal wealth is what you make each year. However, it&s;s not what you make but what you keep and how you use those savings. Real personal wealth&a;nbsp;is having passive income that exceeds your expenses.&a;nbsp;Buy income-generating assets with savings. True wealth is the piece of mind knowing your living expenses are covered by the passive income you generate no matter your job status. -&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;https://twitter.com/DavidGass&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;David Gass&l;/a&g;,&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;http://www.andersonadvisors.com/&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Anderson Business Advisors, LLC&l;/a&g;

&l;b&g;2. Knowledge isn&s;t enough to build wealth; you have to put it into action.&l;/b&g;&l;span&g;&a;nbsp;&l;/span&g;

The biggest misconception for many people is procrastination. Personal wealth isn&s;t all about knowing what and how. You can know what to do and how to do it, but as long as you delay, you are forfeiting wealth-building. Start saving. Start learning. Start paying off your debt. Just start. -&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;https://twitter.com/justingoodbread&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Justin Goodbread&l;/a&g;,&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;http://www.heritageinvestor.com/&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Heritage Investors&l;/a&g;

&l;b&g;3. Your paycheck doesn&s;t make you wealthy; you have to learn how to save.&l;/b&g;&l;span&g;&a;nbsp;&l;/span&g;

Saving more money than you spend will make you personally wealthy.&a;nbsp;Would you believe there are people who make $40,000 a year who have $&l;span class=&q;il&q;&g;1&l;/span&g;&l;span&g;&a;nbsp;&l;/span&g;million saved for retirement, yet there are people who make $500,000 a year who can&s;t figure out how to save a dollar?&a;nbsp;Don&s;t worry about what others have.&a;nbsp;Stay true to yourself, focus on your values and priorities, and live a meaningful life. -&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;https://twitter.com/wealthforesight&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Alexander Koury&l;/a&g;,&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;http://www.valuesquest.com/&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Values Quest&l;/a&g;

&l;b&g;4. Don&s;t try to keep up with the Joneses; set your own healthy, personal financial goals.&l;/b&g;&l;span&g;&a;nbsp;&l;/span&g;

In today&a;rsquo;s show-off society, we&s;re overstimulated by material wealth. But keep in mind that many who depict a life of wealth are actually living beyond their means. Trying to keep up with a perceived idea of someone else&a;rsquo;s financial status will only set you up for failure. Instead, set healthy financial goals. Another person&a;rsquo;s finances will not pay your bills and should not preoccupy your mind. -&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;https://twitter.com/QuickBridgeOC&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Ben Gold&l;/a&g;,&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;http://quickbridge.com/&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;QuickBridge Funding&l;/a&g;

&l;b&g;5. Higher returns won&s;t always pay off; make smart investment decisions.&l;/b&g;&l;span&g;&a;nbsp;&l;/span&g;

Many people assume that going for higher returns will provide more money in the end, but they misunderstand that higher returns come as a package deal with bigger losses when they occur. This philosophy of investment can lead to significant volatility of value through the ups and downs. They fail to realize that the big losses damage the accumulation value more than big returns help grow value. -&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;https://www.linkedin.com/in/mike-reppert-cfp-csa-b65b285/&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Mike Reppert&l;/a&g;,&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;http://www.spectrumadvisors.net/&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Spectrum Advisors&l;/a&g;

&l;b&g;6. Wealth doesn&s;t accumulate overnight; you have to be patient.&l;/b&g;&l;span&g;&a;nbsp;&l;/span&g;

Wealth is a slow process. The media constantly depicts the lives of the rich and famous, but in reality, wealth is built slowly, over time, by being disciplined and committed to your financial goals. Einstein was onto something when he said, &a;ldquo;Compound interest is the most powerful force in the universe.&a;rdquo; -&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;https://twitter.com/shanephurley&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Shane Hurley&l;/a&g;,&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;http://www.redfynn.com/&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;RedFynn Technologies&l;/a&g;

&l;b&g;7. Wealth doesn&s;t make life easier; you have to work at keeping and growing it.&l;/b&g;&l;span&g;&a;nbsp;&l;/span&g;

I think the most common misconception when it comes to personal wealth is that, once you&s;re wealthy, things get easier. On the contrary, you must now pay more attention to that wealth and pay others to manage it correctly. Just because you have it, doesn&s;t mean you can&s;t lose it. You have to be razor sharp and aware of it all so you can keep your wealth and grow it. -&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;https://twitter.com/JaredWeitz&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Jared Weitz&l;/a&g;,&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;https://www.unitedcapitalsource.com/&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;United Capital Source&l;/a&g;

&l;b&g;8. Advisors aren&s;t obligated to act in your best interest; find a fiduciary instead.&l;/b&g;&l;span&g;&a;nbsp;&l;/span&g;

Investors often assume financial advisors are legally obligated to act in their best interests, but that&a;rsquo;s only true of fiduciaries. Some advisors pillage their clients&s; wealth with hidden fees and conflicts of interest. This can destroy retirement plans. Investors should feel empowered to ask pointed questions about their advisor&a;rsquo;s fiduciary status and walk away if they don&a;rsquo;t like the answers. -&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;https://twitter.com/JayShah_PC&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Jay Shah&l;/a&g;,&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;http://www.personalcapital.com/&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Personal Capital&l;/a&g;

&l;/p&g;&l;div style=&q;padding: 20px 0pt;margin: 20px 0pt;border-bottom: 1px solid #DDDDDD;border-top: 1px solid #DDDDDD&q;&g;&l;a href=&q;http://www.forbesfinancecouncil.com/qualify/?source=forbes-text&q; target=&q;_blank&q;&g;Forbes Finance Council&l;/a&g; is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms. &l;em&g;&l;a href=&q;http://www.forbesfinancecouncil.com/qualify/?source=forbes-text&q; target=&q;_blank&q;&g;Do I qualify?&l;/a&g;&l;/em&g;&l;/div&g;

&l;b&g;9. Money is not the only thing that matters; guard your time, too.&l;/b&g;&l;span&g;&a;nbsp;&l;/span&g;

Making a lot of money or having a lot of money is not the only thing that matters. Are you truly wealthy if you can&s;t afford to take a month off from work? Are you not free to pursue hobbies and interests because you are too busy trying to increase your personal wealth? I guard my personal time now as much as I guard my financial accounts. -&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;https://www.linkedin.com/in/vlad-rusz-7456b993&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Vlad Rusz&l;/a&g;,&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;http://vladcorpusa.com/&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Vlad Corp. USA&l;/a&g;

&l;b&g;10. Traditional investments aren&s;t your only option; explore all paths to retirement wealth.&l;/b&g;&l;span&g;&a;nbsp;&l;/span&g;

One of the biggest misconceptions about retirement wealth is that you can only invest in stock, bonds and mutual funds. There are more options than you&a;rsquo;d think. Alternative investments such as real estate and private equity are available if using a vehicle like a self-directed IRA. This way, you can build wealth in a tax-deferred environment, investing in assets you understand. -&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;https://twitter.com/IRA_Resources&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Jason Craig&l;/a&g;,&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;http://www.iraresources.com/&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;IRA Resources, Inc&l;/a&g;

&l;b&g;11. You don&s;t need to outperform the market; keep things simple and get good advice for you.&l;/b&g;&l;span&g;&a;nbsp;&l;/span&g;

Many believe that access to top managers who can consistently outperform the markets is the way the wealthy maintain and enhance their wealth. As it turns out, most actively managed funds underperform their benchmark over the long run and are highly tax-inefficient. Minimizing taxes, getting good advice and keeping things simple are the ways to maintain personal wealth for generations to come. -&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;https://twitter.com/adviceperiod&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;Josh Fein&l;/a&g;,&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;http://www.adviceperiod.com/&q; target=&q;_blank&q; rel=&q;noopener noreferrer&q; target=&q;_blank&q;&g;AdvicePeriod&l;/a&g;&l;span&g;&a;nbsp;&l;/span&g;

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