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MONEY AND COIN MYTHS: THE TOPMOST COMMON MISCONCEPTIONS

Finance
UPDATED: February 27, 2020

People usually define money and coins according to the functions they provide. The three services they give are as a medium of exchange, as a store of value, and as a unit of account. The most crucial purpose is as a medium of exchange to make transactions easier.

Without money and coins, all transactions would be like before, conducted by barter. People will exchange one good or service for another. A barter system is not ideal because you need to have a good or service of equal value the supplier also wants. An exchange can only happen if both parties desire the good or service the other offers.

Like almost everything else, there are a lot of myths surrounding money and coins. Most of these myths cause people more financial stress than benefits. We all grow up hearing the same financial advice. Spend less and save more. That may ring true but, other widespread money management tips are false.

The older the coin, the more valuable it is.

This saying can be true, sometimes. But, it is not true most of the time. The age of a coin has minimal impact on its value. There are a lot of factors that determine the coin values and price. Two of the biggest ones are supply and demand. The higher demand drives prices up. The higher amount of supply makes prices go down.

The more shiny and cleaner your coins are, the better.

Coin valeus

A lot of people believe this myth and use different materials to shine up their coins. The surface of the coin will end up damaged if you clean it the wrong way. It is better to wipe it with a cloth to remove dirt but never use abrasive materials and acids. Coin dealers and seasoned coin collectors can determine “cleaned” coins. If you do not know the worth of the currency, then it is better to leave it uncleaned.

Investing is only for rich people.

This one is a common misconception. Anyone with a small pile of money can get a foothold in the stock market. A smart investment strategy is one of the best ways to let your money grow. This strategy can even put you on the track to financial independence. Look into index funds with passive management for an easy way to start building your wealth. You can meet with wealth managers and financial advisors for a free consultation, too.

All debt is bad.

Carrying a balance on your credit card or a high-interest loan can cost a lot. That is true. But, not all debt will hold you back. Certain types of debt could help you move forward in life and achieve your personal goals. Mortgages and student loans are some examples. The interest rates on mortgages and student loans are much lower. You will realize that if you compare them to those on personal loans or credit cards. The interest may even be tax-deductible. Make sure you shop around for the best rates, no matter what kind of debt you take on. Never borrow more than you can afford to pay back on time.

Only pick up pennies that are heads-up.

There is an old belief that pennies lying heads-up are good luck. Pennies that are tails up will lead to a stroke of bad luck. You should avoid picking those up and leave them undisturbed. This one goes against the old saying from England, “See a penny, pick it up, and all day long, you will have good luck.” The truth is, picking up a penny, heads or tails-up, is lucky. You should pick it up if it is evident that nobody owns it.

Believing in these myths is up to you. Make sure that you invest and avoid spending more than you can afford. That will make your money and coins more valuable.

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