Sherlock Unlocks: Financial Myths Busted!

UP JFA Pisopedia
6 min readOct 7, 2021


Life is full of mysteries that are waiting to be solved. For example, how to reach financial freedom is a big mystery that has yet to be deciphered. There are numerous pathways we can go about to answer this but along the way, there would be red herrings that would lead you astray; so beware, Watson! Luckily, I, the master detective Sherlock Holmes, am here to get to the bottom of these misleading clues spreading about and guide you to the road towards financial independence. The game is afoot!

Myth 1: My savings account is sufficient to secure me for the future

Truth be told, the mere act of saving money is insufficient to lead us to financial freedom. Don’t get me wrong, Watson! While it is important and necessary to build riches, it must be supplemented with additional steps as saving alone would not make your money grow.

It’s also important to be on your guard! You should not allow your money to just stagnate in the bank because inflation can occur, resulting in the decrease of the value of your money as time passes. To further simplify this concept for you, the value of the money you initially saved may be lower after a certain time. While savings accounts do accrue interest, this alone does not grow your money as fast as the rate of inflation. Hence, I consider solely relying on a savings account as a mediocre monetary strategy since it is not enough for you to have a secure future and will not lead you towards financial freedom. Instead, think of savings accounts as some form of temporary storage that holds your money. Here, you can conveniently and quickly access your money whenever and wherever you might need it.

To summarize my point, allow me to quote my great friend Warren Buffett. He once said: “If you don’t find a way to make money while you sleep, you will work until you die.” Well, we would not want that, do we? To avoid this, we must learn to make our money work for us instead of us working tirelessly for money. Keep in mind that saving is only the first piece of the puzzle we have yet to decode. We must learn how to grow our money by investing in assets and subsequently, beating the enemy: inflation.

Myth 2: Debts and credit cards are bad and must be avoided.

You may need to borrow money for numerous reasons and this is acceptable since not all debt is bad! Firstly, we have to distinguish between bad debt and good debt. The difference between the two ultimately depends on your financial situation and risk tolerance. Simply put, good debt is when you borrow money to make more money, while bad debt would not make any money for you and may even plunge you into more debt!

It is important to note that debt can help you establish and build your credit score. Credit scoring is used by financial institutions such as banks to determine whether you are trustworthy enough for a loan. With a good credit score, not only will you have a higher probability of being granted a credit product, but you also receive other benefits such as getting larger loans at lower interest rates, among other rewards.

Now, Watson, you are most likely thinking how you can build your credit score. Well, this can be done through various methods.

For one, credit cards are financial tools that allow you to make purchases even without cash on hand. There really is no shame in using a credit card as the use of such has its perks! Examples of such include building a good credit history (as I mentioned previously), earning rewards, and protecting your purchases. You must then learn to utilize these benefits by saving money through points or by moving money around to where it is most needed.

On the other hand, bad debts will pile up and bury you slowly. These include debts with high interest or with recurring penalties. At the end of the day, what matters is the way you use your credit card so make sure to use it with caution.

Lastly, take note that you can also build your credit score even without a credit card. Just remember, at the very least, to consistently pay your loans on time!

Myth 3: Investing requires a huge amount of initial capital to start with

Before we tackle this myth, let’s backtrack a bit. You may wonder, “why do I need to invest in the first place?” Elementary, my dear Watson! As I previously mentioned, saving alone is not enough. Investing in the right assets gives your money purpose and an opportunity to grow. In the process, we must know where our money is going and not be mindless as to where we invest. There may be numerous scammers out there who will mislead you, so have a watchful eye!

Now, let us move on to the interesting part and discuss how an investor’s journey begins. Actually, different investments require different amounts of capital. Fortunately, even with smaller capitals, we can already start investing. This means that you, yes you, can be an investor already! You may ask, why is this the case? Well, fortunately, time and the concept of compounding interest are on our side. My friends from the academe have shown that investing at a young age yields more profit than when you invest at a later age, even with a bigger capital. The reason behind this is the concept of compounding interest. Basically, the profit you get from your investments will accrue more interest over time and will keep on growing as long as you do not take out the investment. Isn’t that great, indeed?

If you want to get started on investing, I have listed three of my trusted platforms below, which you can check out at your own convenience:

  • GInvest by GCash: For a minimum of Php 50, GCash lets you invest in a selection of mutual funds.
  • PDAX: For a minimum of Php 50, you get to invest and trade cryptocurrencies!
  • COL Financial: For a minimum of Php 1000, you may already start investing in stocks and mutual funds.

Myth 4: Investing money will quickly make me rich

While it is indeed true that some people gain a lot of cash from one trade alone, this investment involves a significantly high amount of risk that not everyone has the capacity to take on. It is highly improbable! With this, proper risk management is a requirement to ensure the sustainability of your investments.

For the most part, investing and growing your money takes time. Imagine rushing the foundations of your dream house or uprooting a plant whose roots have yet to take hold. It might look good, but it will be fundamentally unstable. The chances are it will not last long as it will not be able to withstand a lot of challenges. All your time and efforts may just go to waste when you rush things. You wouldn’t want your dream house to turn into dust would you, Watson? Similarly, growing your investments takes time, effort, and emotional control. Along the way, you will learn skills that would make you a better investor.

Myth 5: Money brings happiness

What a controversial topic, indeed! Based on my deductions, I have therefore concluded that money is only a tool that we must utilize. Money may indeed enable us to buy our needs and wants, but it cannot buy something intangible as happiness per se. Do not get consumed by money and make it your only goal in the world. Learning how to use and spend money wisely is an important skill to develop. Do not just save all your money and not reward yourself. Money is not the goal here, but happiness.

After all, life is short so do not just hold on to your money for the sake of having money. Invest in experiences, in others, and in yourself. Financial freedom should set you free so do not lock yourself up in greed and fear. Remember, use your money and do not let money use you!

So what now?

Excellent! We are so close to closing this case! However, my friend, the rest is up to you. Fret not! To help you out, I will leave you with some clues to find your own path towards financial independence.

Now, Watson, you must do your own research and not theorize without sufficient evidence! Make sure to develop your critical thinking, stay focused on your goals, and not get consumed by trivial matters. Remember, there are things you may see but do not observe. Look closely and do not listen to the noise around you! Study yourself and find out what works for you best because each case, along with the instances that surround it, is different.

With all these in mind, I hereby declare these myths false. You already know my methods Watson, so it is now up to you to pave your own path towards financial freedom. Case closed and Sherlock out!



UP JFA Pisopedia

Pisopedia is an online learning platform for Filipino students to learn more about personal finance.