There are many platitudes surrounding financial life. This is different to simple good advice. For example, the latter might suggest that you should live within your means – this is generally good advice no matter where you are on the earnings scale. A platitude, as it relates to finances, might suggest you should never spend to treat on yourself when investments are available. It’s too easy to confuse a platitude with good advice, especially from those who claim to understand how the financial markets work or who think their good fortunate is necessarily down to their own genius and not (partly) their own luck.
When managing your finances, then, it’s essential to focus on what matters to you and what your own goals are, as opposed to aligning to approach with those who give you direct advice or demand you behave in a certain way. In this post, we’ll discuss some financial platitudes to avoid:
“Renting Is Dead Money”
It gets thrown around a lot, usually by people who managed to buy property during a more forgiving market and now act like they cracked some secret code, but the idea that renting is always a financial failure just doesn’t hold up when you look at the broader picture, as Alex Kleyner and his insights around debt management show.
Renting offers flexibility, and for some, that’s worth far more than building equity in a house they don’t even want to stay in. As such, it can give breathing room to move jobs, explore new places, or simply avoid the stress that can come with home ownership, and the costs aren’t always as one-sided as they’re made out to be. For instance, homeowners face maintenance, insurance, property taxes, and all the unexpected costs that pop up the minute the boiler starts making that noise again.
Sure, you’re not building long-term capital this way, but don’t think your renting approach is a terrible financial decision just because you need or want to.
“Cut Out All Non-Essential Spending”
This one sounds more responsible than it actually is. It gets repeated in that kind of stern voice people use when pretending to be good with money, but it misses the point of having money in the first place.
Yes, reducing costs can help build savings. But if you’re stripping your life of every small pleasure or social activity just to squirrel away more cash, it’s easy to burn out and avoid what actually makes life worth living. It also assumes everyone is starting from the same place, with the same income and the same opportunities, which just isn’t the case.
“If You Just Work Hard, You’ll Succeed Financially”
This one feels more comforting than it is true. Hard work does matter, of course, but tying it directly to financial outcomes oversimplifies everything, as there are many people working fourteen hours a day without being “wealthy.” It assumes life is a meritocracy, where effort always leads to reward. That’s not how it works. Sometimes you are the victim of unfair circumstances, and you just have to find a way to make it work for you. That can include having the help of a law firm or an advisor, but in any case it’s something you’ll need to think about. Now, we’re not going to say this doesn’t count nor that you can’t significantly improve your circumstances, but rather, don’t compare yourself to others right now, just to who you were a year ago. It’s okay if you have to downsize or transfer or move laterally or earn less for happiness. Working hard isn’t the be-all and end-all, so don’t judge yourself based on limited insights.
With this advice, we hope you can more easily avoid the financial platitudes of those around you.
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