Financial Myths Canadians Should Stop Believing
Let’s debunk some common financial myths. For many people, outdated financial ideas and concepts are often passed down to us through generations, or often these days, amplified through social media. But managing our money is hard enough without misleading advice steering us off course. Believing these misconceptions can lead to missed opportunities, unnecessary stress, and even financial setbacks.
Here are some financial myths we should stop believing, and what to do instead.
✅ Keeping Cash Is Safer Than Investing
Myth: Holding cash during uncertain times is the safest option.
Reality: Inflation erodes purchasing power. While an emergency fund is essential, hoarding cash in low-interest accounts can mean losing value over time.
Smart Move: Keep 3+ months of expenses in an emergency account that you can easily access, but invest the rest to grow your wealth.
✅ You’re Too Young or Too Old to Start Financial Planning
Myth: Financial planning only makes sense at certain ages.
Reality: It’s never too early or too late. Starting young maximizes compound growth, but even later planning improves security. Whether you’re 25 or 55, creating a plan for savings, debt, and retirement is always worthwhile.
Smart Move: Begin where you are. Time in the market matters more than timing the market.
✅ All Debt Is Bad
Myth: Avoid borrowing at all costs.
Reality: Not all debt is created equal. High-interest debt like credit cards is harmful, but low-interest debt (mortgages, student loans) can help build wealth and credit.
Smart Move: Eliminate high-interest debt first, while using strategic borrowing for long-term goals.
✅ Renting Is Throwing Money Away
Myth: Homeownership is always better than renting.
Reality: Renting can be smarter in high-cost cities like Halifax, especially if you invest the difference. Owning a house comes with extra costs like property taxes, home maintenance, and mortgage interest.
Smart Move: Evaluate your lifestyle, goals, and the local market before deciding. Maybe renting is the better choice for you after all.
✅You Need to Be Rich to Invest
Myth: Investing requires large sums.
Reality: Canadians can start with as little as $50/month through TFSAs, RRSPs, or online brokerages.*
Smart Move: Start small, stay consistent, and let compound growth work its magic.
✅You Can Time the Market
Myth: Waiting for the “right time” to invest avoids risk.
Reality: Market timing is extremely difficult and often leads to missed gains. Lately market volatility has meant investing for the long-term is the wise choice.
Smart Move: Invest regularly and focus on long-term goals. Consistency is key when investing.
✅ Rising Interest Rates Mean Pay Off All Debt Immediately
Myth: When rates rise, all debt should be cleared.
Reality: Prioritize high-interest debt like credit cards first. Fixed-rate mortgages at low rates may not need aggressive repayment.
Smart Move: Make strategic decisions based on interest rates and opportunity costs, not fear.
✅ RRSPs Are Always Better for Retirement
Myth: RRSPs are the superior choice for retirement savings.
Reality: RRSPs work best for high-income earners who benefit from tax deductions now. TFSAs can be better for those in lower tax brackets or who value flexibility and tax-free withdrawals.
Smart Move: Have a chat with us about what is your best option! Opening a TFSA might be the better option for you, and like RRSPs, your contributions to a TFSA can be invested in the markets.
Final Thoughts
Financial myths can feel convincing because they often come from trusted sources or past experiences. But the financial landscape changes, and what worked years ago may not apply today. By questioning these myths and making informed decisions, Canadians can build stronger financial futures.
*Mutual funds and other securities are offered through Aviso Wealth, a division of Aviso Financial Inc. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Unless otherwise stated, mutual funds and other securities are not insured nor guaranteed, their values change frequently and past performance may not be repeated.