Having been inundated by marketing message after message, designed to confuse and obfuscate the facts, Career Professionals, as a group, tend to fall into some common wealth building traps. Some of these are based on ignorance, others based on being misled.

Here are the top ten:

1. I do not need to pay attention to my finances at all
   
   
   Americans continue to falter in their savings rate, participation in retirement plans remains low, and consumer debt continues to climb. Clearly, many of us do not wish to think about money, except perhaps being able to spend it. Obviously then, the future is not nearly as bright as it would have been if we were paying some attention to our finances. Read the Three Phases from Nothing to Millionaire status to understand the degree of planning required to get to financial freedom, leave alone getting there in under ten years! Like a wayward child, money requires a lot of care and attention before it does your bidding - but once it knows you are paying attention, it works like an obedient servant.
   
   
2. There is a magic bullet somewhere that will bring tons of money to me. I just need to find it
   
   
   This myth simply is an extension of Myth #1. At first we don't want to think about money, but then when do wish to do so - we believe in a simple answer, a single technique that will immediately have wealth rushing towards us. Perhaps the stories of Internet millionaires, or other overnight success stories that get a lot of media coverage tends to blind us. Yes, the stories are real - but they are also one in a million (or ten million). The real wealth builders like Warren Buffett, or Steve Jobs are those who have developed a sense of wealth - which only comes with time and effort. This wealth sense is indeed like a magic bullet - but it is not just something to be found and used - it needs to be developed and tended to.
   
   
3. Saving 10% of Gross Income is sufficient to ring in early financial freedom
   
   
   Well at least there is the thought of savings involved here. 10% of Gross Income can bring you financial freedom after a very long period of time, say 40 years of work (when not combined with other techniques). 40 years is too long to wait, and things may be far too uncertain. 15% is the minimum level of savings, preferable is 20% and for the really serious - 30% of gross. At the 10% level, one is hoping for investing alone to solve all of one's problems (another myth). And in any case, investing requires a starting capital to work with - and the higher the base amount, the better the results.
   
   
4. I put money away in an index fund in my 401(k), and all will be well
   
   
   This has been a myth propogated by the wonderful 20 year secular bull market of 1982-2000, when the S&P 500 index grew at an annual rate of 16.4%! That is a terrific rate of return and $10,000 invested in 1980 in an S&P 500 Index fund would have grown to $208,000 without any additional money added. And as investors, we have tendency to be influenced by the recent past than by understanding that markets love to move in cycles. The five years since 2000 have seen very flat markets, with the S&P 500 index still below its peak of 2000 - returning -2% annually since then. Clearly not the type of investing returns that leads to financial freedom! The S&P 500 index may still have a role to play in your portfolio allocation, but not due to blind trust in the past.
   
   
5. Real estate investing and ownership is the answer to all my problems
   
   
   The real-estate boom of the first half of this decade has converted more people into real-estate investors and agents than ever before. Buy a piece of property, hang on for a year or so, flip it, rake in the money. Simple. And not unlike the Internet bubble of the late '90s. The folks who were hurt were not the savvy professionals, but career professionals & small business owners - who had strayed into an area they had no expertise in. The real estate market of the present time gives the same feel - though we could be wrong.
   
   Real estate investing, becoming a landlord, buying fixer-uppers and so forth all have a place in the world of investing - and if that is the direction you wish to go in, then by all means do. But do not do so in the hopes of overnight success. It is as long a process as any other and becoming good at it takes time. Approaching the area with the humility of a student will reward you well.
   
   
6. Investing alone is enough to take me to financial freedom (or if I invest well, all my troubles will be over)
   
   
   Double your money every 3 years, and and you are home scot-free! This is the hope of those amongst us who run after investing and investment gurus in the media like rabid fans of a rock star. Investing will hardly solve all your money problems, leave alone all your problems. Good investing will supply you with a solid growth in your portfolio, provided you do not overspend & continue to channel your savings into your portfolio. Additionally, you must find ways to add more income to your means & protect your portfolio from "loss of income" shocks. And finally, protect your assets through insurance or other means. When you combine all of these tactics, yes, investing can help you move forward. Investing cannot protect you from overspending, or being irresponsible towards your own assets!
   
   
7. My work is just a job, and I must simply go through the motions
   
   
   This single attitude can turn what should be a fun time in your life into one of sheer drudgery. And what is worse, that will reflect in your work, in opportunities and ultimately in your income. It is far better to seek out the right career, then the right job within that career, and finally to grow within that career. Sure, every job has its ups and downs, its politics and its bad apples - but jobs also have their good folks and great times. As one learns to roll with punches, job becomes a pleasure and your career blossoms - with its corresponding beneficial effects being felt in your purse!
   
   
8. I have no time for developing extra income resources
   
   
   Unless you are very secure in your job and are earning a high income ($150,000+), extra income is almost a must in today's age of corporate right-sizing. There is almost no job that is "assured" - not in the face of the onslaught of cheap labor from China and India (and we have not felt the full impact yet). Yes, we will become more innovative and continue to lead the way with new types of work - but the period can be expected to be full of tumult and corporate shake-ups. Developing an extra source of income is the most prudent way to protect yourself from "loss of income" shocks. Fortunately, you can compensate for the lack of time by expanding efforts across a period of time, to as little as 10 hours/week.
   
   
9. I am going to learn every single thing on my own - I need absolutely no help from anyone or from any resource
   
   
   Ok, not all of us do this. But an unfortunate large number still think that "I can go it alone". The answer - sure you can. If you think you have the extra 10-15 years to do so. The better choice is to learn from those how have tread the path before and follow their advice. In due course of time you will learn why they suggest what they are suggesting. But why have to relearn the lessons in the class of hard-knocks? The wise person is always humble, always a student, always learning and implementing. Success flows in increasing quantities to such a person.
   
   
10. Lying to self "I know investing, I am doing well in my career, I can develop extra income anytime I wished"
    
    
    The final nail on the coffin is lying to oneself. One may indulge in it to save our egos perhaps, or to shield oneself from ridicule in social circles. But it ultimately destroys us. Truth offers the best redemption, and knowing that we don't know is the first step towards knowledge. Know what you know and what you don't, the rest shall follow.

We just could not stop ourselves, so here are 5 bonus myths: 

1. Learning and making money from investing is easy
   
   No, it isn't. There are experts with reams of research work in front of them, and research teams running into 100s working everyday to make money in the markets. Like any other job, doing well in investing is a lot of effort. Which is why we recommend using the help of these experts, through investment newsletters.
   
2. Making extra money on the Internet is easy
   
   Complete nonsense. It is as much work as in any offline business. It may reduce your need to move around, but that is about it. Maintaining a property in the online world (your website) is as much work, and takes as much time or more to build it.
   
   
3. I don't care about "how" a mutual fund makes money, I just need to know that it does
   
   
   Mutual funds will remain a core part of your road to financial freedom. Simply watching recent performance will get you nowhere with mutual funds. You must know the manager, know her style and agree with it. Moreover you have to make sure that they stick to that style, and not just change with the winds of the market. Mutual fund evaluation is an art unto itself.
   
   
4. All load mutual funds are bad, and no-loads are better
   
   
   Another myth from those who talk about mutual funds. Sure, loads can reduce your returns - but that is if you have returns in the first place! Bill Gross, the "bond guy", charges a steep 4%(+) load for the management of his fund. But millions are happy to pay that sum to be in his fund. And he has rewarded them handsomely!
   
   
5. Ignore the general economy!
   
   
   Sure, you cannot plan your day to day activity around the general economic trends of the country, but you can and should watch our for major economic trends - baby boomer retirement, the rise of the echo-boomers, outsourcing trends, growing prosperity in Asia and so forth. Ignoring these hurts your career, investments and extra income business. Ignore it? Never.