This is the first in a series of articles revealing the Myths that Keep Your Broke. In these articles, I will uncover the many myths that too many people believe. These myths can prevent you from creating wealth and financial freedom. Let’s start destroying them.

You might not believe all of the myths that I’ll write about, but I am sure you believe some of them. And in my mind the first one is the most dangerous myth of all. It is the idea that your creditors are more important than you are.

Myth #1: Pay your Debts First

Do you believe that you must pay down your debts before you start to invest? It doesn’t matter if I am talking about credit cards, car loans, or mortgages.

You might believe that to be financially free you first need to be debt-free, and that is 100% completely, ridiculously and harmfully wrong. Studies, examples, and my personal experience prove it is wrong, and here is why:

As a responsible person you feel an obligation to pay your debts, and creditors take advantage of that through their advertising and marketing. As one example; banks will run contests where the more often you use your credit card the more entries you will have toward some contest where the winner will have their balance paid in full. Everyone else will be stuck paying off their balance over time and the bank collects millions of dollars in interest. You become a wage slave to your creditors.

Only about half of the people who use credit cards can pay the balance in full each month. When the other half get the balances paid off, they return in short order, and they are on the same roller coaster ride again for the rest of their life. They never start to save and invest.

About 95% of those who pay off their debts with money from an inheritance, lawsuit settlement, tax refund, consolidation loan, family loan, or any quick and easy method, have the debts build up again within 12 months.

What you need to do – instead of focusing on becoming debt-free – is to begin to save and invest toward creating financial freedom. What you must do is to pay yourself first before anyone and anything else. For about 100 years the book, The Richest Man In Babylon, says to pay yourself first 10% of what you earn. That concept will still be working when you and I are dust.

That is what I did when I found myself broke at age 50 and had to start all over again. I was not earning a lot of money, only about $5000 per month. I made the minimum payments on my credit cards to keep a good FICO score and about six years later the earnings from my investments were enough to pay the credit card balances in full each month.

In the most recent version of my Wealth On Any Income book on page 141, I have a chart that shows just a two-year delay to pay off a $6000 debt can cost you almost $200,000 in lost investment earnings down the road. That is a really bad trade-off.

Forget about what Dave Ramsey, Suze Orman or your CPA says about paying off your credit cards first. Is your CPA a multi-millionaire who does not have to work for a living?
You need to create your savings and investment plan first, and pay your consumer debts later.

Myth #2: Self-made Millionaires

“Wealth is a Team Sport, not a Solo Sport.” – Rennie Gabriel

You have probably heard the expression about a wealthy person that they are a self-made millionaire. Maybe the person who said it was wealthy. DO NOT BELIEVE IT!

If you look at the wealthiest people in this country, whether past or present, they did not create massive wealth by themselves. The concept of the self-made millionaire is a fantasy. People who say they are a self-made millionaire are both deluding themselves or just full of themselves.

That so-called self-made millionaire may have the vision of what it takes, but it takes a team to do the execution of that vision. If you study every successful company you will see there was a visionary and at least one execution master.

Steve Jobs did not design or make Apple computers; he had a vision and Steve Wozniak executed Job’s vision. Howard Hughes did not build the Spruce Goose or any of his companies or casinos by himself, and J. Paul Getty did not become a billionaire by himself. One of Getty’s quotes in his book is that he would rather have 1% of the efforts of 100 people than 100% of his own efforts.

As a personal example, it took three people to create the net worth I have today, and it takes several more people to protect it; from a portfolio manager to lawyers to accountants.

Let me ask you this question: Who would you want on your team to support you to create wealth? Answer that and you can become wealthy, and you won’t care about the term self-made.

To Your Prosperity,


Author's Bio: 

Often in the media and in a recent Ted Talk, Rennie Gabriel supports individuals and business owners to create work as a choice, instead of a requirement, just as he did for himself. Rennie had gone broke twice (two divorces), but using the same concepts published in his book, Rennie created more wealth in each recovery than what he had prior.

As a highly rated instructor at the University of California in Los Angeles (UCLA), Rennie uses his award-winning, best-selling book, Wealth On Any Income, to teach effective money skills from both the emotional/psychological aspects as well as the practical components. His book has been translated into five languages. Rennie is a retired Chartered Life Underwriter (CLU) and Certified Financial Planner® (CFP®) and often adds BFD to his credentials.

His extensive knowledge of real estate and finance is useful not only to those who own or invest in real estate but to anyone striving for a better life by trying to achieve financial freedom.

His clients range from financial professionals, like CPAs, stock brokers, and financial planning firms, to entrepreneurs in the transformational space (coaches, authors, and speakers). He also works with large organizations like the FBI, American National Insurance and Toyota Motors.

After 40 successful years in financial services, Rennie now works to donate 100% of the profits from his speaking fees, wealth programs, books and business coaching to charities, the primary one is where dogs are rescued, trained and donated as service animals for soldiers with PTSD and TBI (Post Traumatic Stress Disorder and Traumatic Brain Injuries)