Top 5 money myths

Movies such as Wolf of Wall Street, Oceans Eleven, The Big Short and A Good Year make it look so easy to make a lot of money. But what part of what we look at in these movies is nonsense? We will look at the biggest myths about money, dollars, pounds, yen, euro – whatever you say!

Asking big questions like “Is the US really owing so much debt to China?”, “What is needed to trade stocks?” and “Do I open a savings account?”




Myth # 5: Penny costs 8 times more than necessary to produce

Few people can agree that the smallest coin in the US can be used for something different than throwing in fountains of desires or paying a parking lot but from a common culture it is known that the coin with Lincoln image costs 8 times more than is necessary to produce.

Zinc and copper make the basic price for making the coin and, depending on the course of these two commodities, can easily cost 1-2 cents to make. In theory, however, both values ​​are flattened when metal prices fall. So, if you’ve ever thought of pursuing a career in coin making, remember that it’s not only legal, but it’s a lot less profitable than you thought.

Myth # 4: The savings account eliminates the possibility of losing money

The global economy is quite volatile in recent years, with the housing bubble in 2008, and being skeptical about the markets is far from being unreasonable given all uncertainty. However, although it is guaranteed that you will not lose your money for a night, it does not mean that savings accounts accumulate profits or even keep the funds at the same level. Interest rates have been a frequent topic in recent years and inflation in the countries ranged from 1.5% to over 3.5%. Money is a relative concept, so high inflation means a low level of relative state in the long run.

Myth # 3: Making more money will result in lower net revenue due to tax rates

Myth # 2 To trade stocks is the same as gambling

In theory, the stock market can be treated as roulette in a casino, but any broker with this attitude will be out of work, and under the laws that he has lost his client’s money. The main difference between the two is the ultimate goal, with gambling hard to follow strategy and discipline and relies on luck, while investors aim to expand their resources through accurate calculations and in-depth knowledge. If Apple shares rise, investors and the company will be pleased, but if you win a lot at the dice table, Bellagio loses money from his pocket. Taking calculated solutions replaces the emotionally driven dice and those with addictive behavior are quickly rejected by the markets.

Myth # 1: The US owes so much debt to China that China owns them

It is said in many political debates, China owns the United States and no one wants to know what will happen if they want their money back. Yes, China really holds over a trillion dollars of US national debt, but the national debt is much more complex than the friend who owes you 500 leva in money for rent. The dollar is one of the most secure currencies in the world, and China uses this debt to attach Yuan to the dollar. Hinged to the Yuan Dollar also makes their growing market stronger and more competitive, which goes hand in hand with cheap Chinese exports. It is not claimed that the huge national debt is a good thing, but it is definitely a frequently affected topic of political rhetoric.

 Trader Aleksandar Kumanov

Varchev Absolute Trader

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