Formal economic education provides a foundation, but rarely helps build confidence in personal financial decisions. Academic courses cover macroeconomics, capital theories, and market behavior models, but often miss the applied level.
As a result, even those who studied at economic faculties continue to believe in common myths about investments. Meanwhile, these myths hinder the development of a personal strategy, the proper assessment of investment risks, and capital management.
The Illusion of Knowledge: How False Confidence Is Formed?
One of the dangerous paradoxes is the feeling that knowledge about interest rates and GDP automatically provides an understanding of personal investments. However, investments for beginners require skills, not just theory: calculating returns, evaluating bonds, comparing stocks, analyzing portfolios. The formal approach replaces practice, and as a result, graduates do not know how to start investing in real instruments.
Myths about investments are often reinforced by the education system: students study models that work in ideal conditions but do not address real-life situations. As a result, simple things like choosing a broker, assessing risk, and asset purchase strategy remain overlooked.
Myth #1. Financial Education Guarantees Success
The notion that a diploma provides an advantage in investments is not supported by practice. Investment myths include the belief that education fills all gaps. However, real income depends not on theories but on decisions. The ability to analyze, develop a strategy, manage emotions, and allocate capital is more important than academic knowledge.
#2. Invest Only When You Have Excess Funds
In academic circles, the thesis often heard is: save first, then invest. In reality, the earlier you start the investment journey, the better the results. Even small amounts invested regularly yield long-term effects through compound interest. Investments for beginners are not about millions but about starting with a minimal deposit and discipline.
#3. All Risks Must Be Eliminated in Advance
The idea of complete predictability is a typical investment myth. Investment risks cannot be completely eliminated, but they can be calculated, accepted, and factored into the portfolio. In reality, actions taken with calculated risk lead to growth, while trying to avoid any fluctuations leads to stagnation. This is where academic principles contradict practice.
#4. Investments Require a Lot of Time and Daily Market Analysis
This myth is even supported in the educational environment, creating an image of a person constantly watching charts. In practice, one can choose a conservative or automated strategy, minimize involvement, and achieve stable profits. Investments do require a lot of time—an assertion refuted by real investor cases working through index funds and automatic contributions.
#5. The Most Reliable Asset Is Real Estate
Many still believe that investing in property is the only way to preserve money. However, real estate is a less liquid asset that requires significant costs upon entry and exit. Unlike securities, selling property quickly and without losses is not guaranteed. Investment myths related to “bricks and mortar” are outdated in the digital economy.
#6. It’s Better Just to Save
Amid uncertainty, the advice to “just save” is often heard. However, without growth, capital loses its value under inflation pressure. Even the most reliable savings depreciate if they are not working. A properly selected portfolio of stocks and bonds allows for capital preservation and growth with moderate risk.
#7. Putting Money in a Deposit Is Better
Many students and graduates unfamiliar with practice rely on banking instruments. However, the actual profits from deposits are often below the inflation level. In the long term, such investments lead to stagnation. Even investments for beginners through funds offer higher efficiency!
#8. All Investments Are Complicated
A myth formed in the educational environment: investments are stressful and only risky people engage in them. However, there are tools with predictable income, regulated by the government, suitable even for the most cautious individuals. Minimizing risks in investments is achieved through tools, not by avoiding participation.
#9. A Successful Investor Is a Market Guru
Reality shows the opposite: the most stable investors are not those who predict trends but those who regularly invest and hold portfolios long-term. The image of a “trading genius” is a myth promoted by the media. In real practice, a simple strategy yields better results than complex speculations.
#10. Investing During a Crisis Is Not Advisable
A crisis is not a stop sign but an opportunity. It is during downturns that assets can be purchased at reduced prices. Investment myths that instill fear during turbulent periods hinder seeing the growth potential. The history of the stock market shows that recovery periods always follow declines.
Why Doesn’t the School of Economics Teach Investing?
The reason is simple: the university’s goal is to provide a foundation, not to develop practical skills. Practice, thinking, and strategy are developed independently. Investment myths persist precisely because they are rarely questioned in the educational environment.
They do not teach how to analyze the stock market, how to allocate income, how to set up a personal investment plan. Real instruments like bonds, trading, dividends, coupon mechanics are not explained.
What Is Truly Important to Know at the Start to Avoid Investment Myths?
The School of Economics does not provide the following fundamental principles necessary for every investor:
- Investing can and should be done with minimal amounts;
- Strategy is more important than the amount;
- Risks are not enemies but factors to be managed;
- A broker is not just an intermediary but a key to the platform;
- Coupons and dividends are the basis of stable passive income;
- Liquidity and distribution are more important than “loud” assets;
- Stocks are not enemies but the main driver of portfolio growth;
- You don’t have to be an expert to start;
- Analysis is more important than intuition;
- Discipline is more valuable than prediction.
Understanding these principles forms a solid strategy and dispels false financial beliefs.
Conclusion
Investment myths persist not only in the minds of unprepared individuals but also within the education system. The lack of practical tools, the substitution of reality with models, the ignorance of decision-making psychology—all hinder the development of a personal strategy.
However, understanding the essence, knowledge of mechanisms, discipline, and a sober assessment of risks allow for the creation of a sound investment model. This is not taught at the university—and this is what becomes the foundation of financial independence!
