5 money myths that are financial nonsense

Myth No. 2: A penny saved is a penny earned
Myth No. 2: A penny saved is a penny earned © Marie C Fields/Shutterstock.com

Many people believe that scrimping to save and hoarding money will make them wealthy. Not true, says Steve Siebold, author of "How Rich People Think."

"The real key (to wealth) is earning," Siebold says. Unfortunately, if you are making $50,000 per year, it will be nearly impossible to accumulate large sums of money, even if you save all your extra pennies.

"People need to stop always looking at the expenses portion of their budget. … It is usually the shortage of income that gets people into trouble," Cardone says.

Those who want to have a large nest egg need to stop thinking in terms of trading time for dollars, Siebold says. Instead, acquiring wealth is a "nonlinear process and comes from generating ideas that solve problems," he says.

In fact, most fortunes can be created almost overnight, if you have the "right idea at the right time," Siebold says.

Cardone agrees. He says that many middle-class money woes don't stem from big spending, but from not enough income being generated by members of the household.

"The solution is not to cut back on the lattes you drink, but to get a higher-paying job," he says. Or, the harsh reality may be a second job or putting your teenage or young adult children to work to get more money into the household's coffers.

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