If your friends and relatives are anything like ours, they’re only too happy to share their financial wisdom with you. Whether they’re qualified to is another matter entirely.

In fact, we often notice the same clichés about investing popping up time and again, repeated like they’re gospel. Some make sense, or have at least elements of rationality. But others are just plain dangerous.

That’s why today we’re going to bust five of the most common myths we hear about investing, once and for all.

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1. You can’t go wrong with bricks and mortar


It’s easy to point to the current madness in Sydney and Melbourne as evidence that property is a one-way ticket to wealth. But it’s not that simple.

While prices in Sydney are up 15 per cent this year, over the last 10 years they’ve only risen by an average of 4.4 per cent, and have often tracked flat or downwards.

Many people also underestimate the costs of owning a property, especially with interest rates at record lows, and assume they’ll always be able to find a tenant and increase rents.

Finally, keep in mind that if all of your money is tied up in your home and an investment property, you’re highly exposed if the market does change course.

2. Negative gearing is a license to print money


This billion-dollar tax break gets a lot of bad press.

It’s billed as a tax wrought for the wealthy and the cause of our capital city house price problems, and yes, at some stage the government will probably have to address it.

But owning a negatively geared property doesn’t guarantee you’ll make money.

That’s because negative gearing provides a tax break for losses incurred when you borrow money to buy an investment (in this case the losses are your rental income minus your loan interest).

To make money on a negatively geared asset, the asset must appreciate in value enough to cover these losses and lock in a profit.

This is a great strategy in a rising property market. But remember what we said in point one…

3. I’m too young / broke to think about investing


It’s easy to think you’ll put off investing until you’re older, or some point in the future when you have money to spare.

But even setting aside a small amount each month can build big rewards over time thanks to the power of compounding. And the younger you start, the better.

For example, let’s say at age 25 Sarah deposits $2,000 into a high interest savings account and commits to kicking in $100 a week from then on.

Assuming she earns an average return of 5 per cent on this money compounding monthly, by the time Sarah is thinking about retirement aged 65 she’s a compound interest millionaire with $1,006,630 in the bank. And she’s only deposited $300,000 in cash. Magic.

4. Super will look after itself


Many Australian prefer to focus on the ‘now’ when it comes to their money and assume that everything will be ok in the long run.

But with people living longer, the government can’t afford to support our aging population in the same way as they did for previous generations.

Yes, you can’t touch it right now, but that doesn’t change the fact that how you invest your super is one of the most important financial decisions of your life.

So take the time to consolidate multiple accounts, understand the fees and choose an appropriate investment option for your situation.

5. Financial advisers are crooks


Fees and commissions paid to financial advisers are a sore point for many people.

But a good financial adviser can save you many times the cost of the fees they charge by making sure your money is appropriately invested and putting a plan in place to help you achieve your financial goals.

Knowledge is always your best investment. So if you don’t have it, buy it from someone who does.