6 Financial Myths Holding You Back (and What to Know Instead)

Financial literacy isn’t just about knowing how to budget or pick a stock. It’s about understanding the rules of the game—and knowing when those rules are more like myths.

And yet, more than half of Americans lack financial literacy.

Why? Because many of us were taught the wrong things. Oversimplified advice. One-size-fits-all rules. Outdated beliefs passed around like gospel in classrooms, on TikTok, or worse—at Thanksgiving dinner.

George Kailas, our CEO here at Prospero.ai, sees this firsthand. “It’s not that people are lazy or uninterested in money,” he explains. “It’s that they’re often operating under bad information. Financial myths are sticky—and expensive.”

George shares six of the most common misconceptions that keep people stuck.

1. "Rising costs are the reason for inflation in the U.S." – Not exactly. Inflation isn’t just about companies hiking prices for fun; it’s driven by factors like excessive money supply, supply chain disruptions, and yes, corporate pricing power. The Fed’s interest rate decisions also play a huge role.
   
   
2. "A recession means the stock market will crash." – This one isn’t necessarily true. The stock market is not the economy. Some recessions barely impact the market, while some market crashes happen outside of recessions. Timing the market based on recession fears alone? Bad idea.
   
   
3. "The stock market is rigged against retail investors." – While institutions have advantages such as faster trades, better executive access and deeper data, retail investors aren’t doomed. With the right strategy—diversification, long-term investing, risk management—you can absolutely build wealth. With the usage of technology on the rise, even the right AI insights can help you cut through market noise, spot trends faster, and make smarter, data-backed decisions
   
   
4. "Debt is always bad." – Not all debt is created equal. High-interest credit card debt? Bad. Low-interest debt that helps you grow wealth (like a mortgage or student loan at a reasonable rate)? Can be a smart financial tool.
   
   
5. "If the market is down, I should sell to avoid losing more money." – This is panic-selling 101. Unless your investments are fundamentally bad, downturns are usually a time to hold—or even buy more if you have done good macro research and have conviction that the market is near the bottom. But it can never hurt to move some of your portfolio to cash or hedge with ETFs like SQQQ or SCC.
   
   
6. "AI and automation will replace human investors completely." – AI can enhance decision-making, but smart investing still requires human judgment. You always have to ask yourself, do I have an edge? Why? So if you and everyone else can access the same stock picks through ChatGPT is that an edge? The best investors use AI as a tool, not a substitute for knowledge and strategy.

Why This All Matters

These myths don’t just make for bad decisions—they widen the gap between people who thrive financially and those who feel left behind. Financial empowerment starts with clarity. That means replacing viral advice with real-world insight, and using tools (like AI) that help you make informed, confident moves.

At Prospero.ai, that’s exactly what we’re building: an investing experience that’s smarter, sharper, and made for you.

Because once you understand the truth behind the myths, you stop playing defense—and start building wealth on your own terms.