8 Myths About Getting Free Money
Who among us doesn’t want free money? It’s a no-brainer to seek it out, but unfortunately there is an abundance of myths around how to get it.
In an effort to help you ditch false hopes about how to land a magical payday without work, GOBankingRates has identified eight big money myths and hashed them out with finance experts.
Myth: All Businesses Can Get Free Grants or No-Interest Loans
If you’re embarking on building your own business, you may be seeking a loan from the government or another lender. Whatever the case, be vigilant and scrutinize whatever you’re signing up for.
“Make sure to check the terms of this loan,” said Joanna Törngren Redebrant, CEO and founder at Nyfikna Investerare. “Some ‘free’ money programs might not be as ‘free’ as they might seem at first.”
Myth: Credit Card Rewards Are Free Money
Credit cards that sport rewards are quite alluring, but be mindful that they’re not handing out free money. You have to spend to get those sweet, sweet perks.
“These rewards are usually accrued through spending and may be offset by interest and fees if not managed properly,” Redebrant said. “Responsible credit card use and sound credit management is essential. Being mindful of the terms and conditions, diligently paying off balance and avoiding unnecessary fees is crucial to ensure that credit card rewards and cash backs truly provide value rather than becoming a financial burden.”
Myth: You Can Invest Without Risk
Yes, you have to invest to be financially fruitful, but you mustn’t be fooled by the myth that there’s such a thing as guaranteed returns. Some bets are safer than others, but none are economy proof.
“Some believe that investing in certain assets is a guaranteed way to make money without any risk,” Redebrant said. “In reality, all investments come with some level of risk. It’s important to carefully research and diversify investments to minimize risk. You don’t have to be a financial wizard to begin investing. There are free online courses, newsletters and podcasts where you can educate yourself about how to build a portfolio.”
Myth: You Can Get Rich Overnight
With the rise of pyramid schemes, often in the form of MLMs, tons of people are buying into the idea that you can build wealth overnight with little work. Alas, unless you win the lottery, this is a myth.
“Many people believe in schemes that promise instant wealth without effort,” Redebrant said. “However, such schemes are often scams. Genuine financial success usually requires hard work, discipline and time. Quick-rich schemes can lead to financial ruin. For example, avoid social media advertisements on money-making schemes that promise to return a significant profit on your investment with little to no effort.”
Myth: You’ll Win the Lottery and Then Be Rich Forever
Why not spend a buck to maybe access a billion bucks? Makes sense, right? Not really. You’re more likely to get struck by lightning twice than to win a teeming Powerball jackpot. Don’t bank on winning anything, let alone the whole prize.
“Lotteries are often seen as a way to strike it rich with a small investment,” Redebrant said. “However, the odds of winning a major lottery jackpot are extremely slim. Playing the lottery should be viewed as a form of entertainment rather than a reliable financial strategy.”
Myth: Sweepstakes Are Always a Win
Yes, there are people who have tremendous success with winning sweepstakes, but no, this is not exactly a foot in the door to instant riches.
“While entering contests and sweepstakes is legal, your odds of winning any significant amount of money are extremely low,” said Rahul Paragi, founder at Money Freed. “These should be viewed as entertainment, not legitimate money-making strategies.”
Myth: Unclaimed Money Sites Are All Scams
This one is actually good news for your wallet — if you have unclaimed funds floating around.
“While there are scammy websites out there, platforms like MissingMoney.com or Unclaimed.org are legitimate,” said Jeff Rose, CFP, founder of Good Financial Cents. “They help people retrieve money from forgotten bank accounts or old paychecks. It’s essential to research and use reputable sites.”
Myth: A Great Idea Will Get You Funding
Pretty much every great business/product began with a great idea, but don’t be fooled: This alone is not guaranteed to get you financial backing from investors.
“Venture capital and angel investing do not work this way,” Paragi said. “Investors want to see a strong business plan, financial projections and a prototype before they consider funding an idea.”
At the end of the day, it’s important to recognize that making money usually takes commitment and discipline above all else and that raking in tons of cash typically doesn’t happen without significant effort.
“It’s crucial to understand that financial stability typically requires hard work, careful planning and a realistic approach to wealth building,” Redebrant said. “Rather than, for example, relying on shortcuts, lotteries or no-interest loans to be the primary route to financial security. Being informed about financial opportunities and risks is essential to make informed decisions.”
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