An example of a taken for granted assumption that people frequently make is the myth of “you have to spend money to make money.” While such a myth may sometimes be true, spending more money does not always lead to a positive return on one’s investment (Ainsworth, 2015). For instance, most people or businesses lose huge amounts of money in the form of overhead costs due to their belief that renting pricey or costly office spaces or other expensive facilities will add them monetary value or attract more customers. The truth is that such facilities have to be justified by an individual’s or business’ cash flow for positive returns to be realized (Ainsworth, 2015).
Additionally, debunking the myth does not imply that cutting costs is the best way to move forward. It is essential for people to understand why, where, and when to spend their money, as well as when not to spend (Ainsworth, 2015). Making money depends on a broad range of factors, as opposed to just spending it as claimed by the myth. Whenever possible, individuals should evaluate the returns on their investments to avoid spending blindly (Ainsworth, 2015). The myth “you have to spend money to make money,” in my view, is meant to persuade stingy people to spend money or encourage people to take financial risks.
Believing in the myth "You need to spend money to make money" has led to the collapse of several small businesses since it makes business owners to forget the first rule of business success, which is to make a profit. It is, therefore, high time people replaced such money myths with various realities about financial management.
Works Cited
Ainsworth, S. (2015). Money, money, money. Practice Management, 25(10), 38-39. http://dx.doi.org/10.12968/prma.2015.25.10.38
