By continuing, you agree to LoansJagat's Credit Report Terms of Use, Terms and Conditions, Privacy Policy, and authorize contact via Call, SMS, Email, or WhatsApp
Disclaimer: The information published on LoansJagat is intended for general informational and educational purposes only and should not be considered financial, legal, or investment advice. Interest rates, loan terms, statistics, and other data may change over time and may vary by lender or source. Please verify the latest information and consult a qualified financial advisor or the respective Bank/NBFC before making any financial decisions.
Subscribe Now
About the author
LoansJagat Team
‘Simplify Finance for Everyone.’ This is the common goal of our team, as we try to explain any topic with relatable examples. From personal to business finance, managing EMIs to becoming debt-free, we do extensive research on each and every parameter, so you don’t have to. Scroll up and have a look at what 15+ years of experience in the BFSI sector looks like.
Related Blog Post
Simplify All Your Loans Into One Affordable EMI
Customers Served
Debt Consolidated
1200+ Reviews
Locations in India
Club all Loans & Credit Card Bills into Single EMI
Quick Apply Loan
Consolidate your debts into one easy EMI.
Takes less than 2 minutes. No paperwork.
10 Lakhs+
Trusted Customers
2000 Cr+
Loans Disbursed
4.7/5
Google Reviews
50+
Banks & NBFCs Offers
Other services mentioned in this article
“Bhai! Crypto mein paisa laga de, kuch mahino mein paise double” financial advice is everywhere – from social media to office pantry conversations. But not all advice is correct. Even in 2025, many old myths are still leading people in the wrong direction.
For example:
“Financial planning to bas ameero ko chochle hai!” or
“First, pay off all your debt, then start investing.”
Because of such misconceptions, people are unable to achieve their financial goals. Experts say that in today’s times, financial planning is important for everyone, no matter what your income is. Not all types of debt are bad; some debts can help in your financial growth. And starting retirement planning early is always better.
In this blog, we will debunk some of the most common financial myths so that you can make informed decisions and secure your financial future.
"Retirement Planning Can Wait" is a myth that can put your future under financial stress. Even in 2025, many people think that starting retirement planning in their 40s or 50s is okay, but this thinking can harm you in the long run. The earlier you start, the more benefit you get from compounding.
Let’s look at an example of Raghav, who is 25 years old and works in Bengaluru.
Age | Monthly Investment (₹) | Annual Return (%) | Investment Period (Years) | Total Corpus at 60 (₹) |
25 | 5,000 | 12% | 35 years |
This table clearly shows that if Raghav starts retirement planning at the age of 25, his corpus can reach up to ₹1,76,00,000. But if the same investment is started at 35 or 45 years, there is a big drop in the total corpus.
With early planning, you can be better prepared for inflation, healthcare costs, and lifestyle expenses. Nowadays, inflation and healthcare costs are rising fast, which can put pressure on your savings during retirement.
Read More – Top 5 Personal Finance Mistakes That Can Ruin Your Savings
So, postponing retirement planning can be a wrong decision. By starting with even a small amount of investment today, you can secure your future.
In India, many people believe that financial planning is only for rich people. But this thinking is wrong. Financial planning is important for everyone, no matter what their income is. It helps you achieve your goals, like children’s education, buying a house, saving for retirement, and creating an emergency fund.
Let’s take the example of Rayan, who works in a private company in Bengaluru and earns ₹30,000 per month. Let's see how he can achieve his goals through financial planning in the table below:
Goal | Monthly Saving (₹) | Investment Period (Years) | Expected Annual Return (%) | Final Corpus (₹) |
Emergency Fund | 2,000 | 1 |
This table clearly shows that even with a limited income, Rayan can achieve his important life goals with the help of proper financial planning. It is not just for the rich, but useful for everyone.
With financial planning, you can control your expenses, save for your goals, and secure your future. It is a tool that makes you financially stronger.
So, thinking that financial planning is only for the rich is a wrong belief. Every person should take this step for their financial goals.
In India, many people see insurance as an investment, like endowment or money-back policies. But this thinking can slow down your financial growth. The main purpose of insurance is protection, not wealth creation.
Let’s look at an example of Shubham, who is 30 years old and lives in Bengaluru. He is choosing between two options:
Term Plan + SIP: ₹50,00,000 term insurance (₹5,000 annual premium) + ₹45,000 annual SIP (with 12% annual return)
Option | Annual Premium (₹) | Total Premium (20 years) (₹) | Estimated Return (%) | Maturity Amount (₹) | Life Cover (₹) |
Endowment Policy | 50,000 |
This table clearly shows that with the Term Plan + SIP combination, Shubham can get almost three times more return, while the life cover stays the same.
The right approach: Keep insurance and investment separate
The purpose of insurance is only protection. For investment, use tools like SIPs that offer higher returns.
Seeing insurance as an investment is a myth. For proper financial planning, keep insurance and investment separate to secure your future better.
"If you don't have money, taking a loan to invest is smart." This is a thought many people have, but it is a dangerous misconception. Let’s understand this with Nisha's example.
Also Read - Top Personal Finance Tips to Save More Money in 2025
Nisha, a 28-year-old software engineer, earns ₹40,000 per month. She has taken a personal loan of ₹5,00,000 with an annual interest rate of 15%, and she has invested this money in the stock market.
Year | Loan Repayment (₹) | Investment Value (₹) | Net Gain/Loss (₹) |
1 | 1,42,500 | 5,60,000 | 4,17,500 |
7,02,400
5,59,900
4
1,42,500
7,85,600
6,43,100
5
1,42,500
1,76,00,000
35 | 5,000 | 12% | 25 years | 66,00,000 |
45 | 5,000 | 12% | 15 years | 24,00,000 |
4%
24,480 |
Children’s Education | 3,000 | 15 | 10% | 10,38,000 |
Own House (Down Payment) | 5,000 | 10 | 8% | 9,20,000 |
Retirement Corpus | 2,000 | 30 | 12% | 23,00,000 |
10,00,000 |
5–6% |
16,50,000 |
50,00,000 |
Term Plan + SIP | 50,000 | 10,00,000 | 12% (SIP) | 49,00,000 | 50,00,000 |
2
1,42,500 |
6,27,200 |
4,84,700 |
3 | 1,42,500 |
*T&C Apply
8,82,000 |
7,39,500 |
From this analysis, it is clear that after 5 years, Nisha could have a net gain of ₹7,39,500. But this is only possible if the stock market performs well consistently.
Borrowing to invest is a high-risk strategy that may not be suitable for everyone. Only consider this strategy if you have sufficient risk tolerance and financial stability. In cases like Nisha’s, if the market performs as expected, returns can be earned. But if the market falls, she may face difficulty in repaying the loan.
Final Advice:
For investing, use your savings, and if you must take a loan, use it only for things you truly need, like education or buying a home. Make investment a part of your long-term financial planning, not a short-term strategy.
Many people believe that investment planning and financial planning are the same. But this thinking is incorrect. Investment planning focuses only on your investments, while financial planning is a complete approach to your entire financial life.
Aspect | Investment Planning | Financial Planning |
Focus Area | Only investments (stocks, mutual funds, etc.) | Entire financial life (budgeting, insurance, tax, etc.) |
Objective | Wealth creation and earning returns | Proper planning for all financial goals |
Risk Management | Portfolio diversification and asset allocation | Protection against life’s uncertainties |
Time Frame | Medium to long-term goals | Short, medium, and long-term goals |
Common Tools | SIPs, stocks, mutual funds | Budgeting, insurance, retirement planning, and estate planning |
Example:
Akshay, a 30-year-old IT professional from Bengaluru, earns ₹60,000 per month. He started investing ₹10,000 monthly in SIPs, but he never thought about his financial goals, emergency fund, or insurance cover.
One day, Akshay fell sick and had to be admitted to the hospital. Since he did not have health insurance, he had to withdraw ₹2,00,000 from his investments. This not only affected his investments but also impacted his financial goals.
The Right Direction: Financial Planning
If Akshay had created a comprehensive financial plan, he would have first taken care of things like an emergency fund, insurance cover, and tax planning. This would have protected his investments and made achieving his financial goals easier.
Every person has a unique financial personality, which influences how they manage their money. Just like DNA is unique to every individual, financial personality also affects a person’s behaviour, thinking, and decision-making about money.
Personality Type | Characteristics |
Saver | Believes in saving money, cautious in spending |
Spender | Spends on instant pleasure, less interest in saving |
Investor | Thinks carefully and invests to grow wealth |
Debtor | Tends to borrow money, lacks control over spending |
Shopper | Enjoys shopping, often spends more than necessary |
Example:
Abhishek is a 30-year-old IT professional from Bengaluru who earns ₹60,000 per month. He started investing ₹10,000 every month in SIPs, but never really thought about his financial goals, emergency fund, or insurance coverage.
Aspect | Details |
Personality Type | Saver |
Monthly Income | ₹60,000 |
Monthly Expenses | ₹30,000 |
Monthly Savings | ₹30,000 |
Investment Approach | Low-risk mutual funds |
Insurance Coverage | ₹10,00,000 term plan |
Emergency Fund | ₹1,50,000 |
Financial Goals | Buy his own house, plan for retirement |
Abhishek’s financial personality is that of a “Saver”. He keeps control over his spending and gives importance to saving. He has made a plan for his financial goals, like buying a home and saving for retirement. He has invested in low-risk mutual funds and has taken a term insurance of ₹10,00,000. He has an emergency fund of ₹1,50,000, which can help him during unexpected situations.
Every person has a different financial personality, which influences how they manage their money. Understanding your financial personality helps you make better financial decisions. Just like Abhishek planned according to his “Saver” personality, you too can secure your future by planning your finances based on your personality type.
Ignoring outdated money myths is crucial for securing your future. Many people believe retirement planning can wait, but starting early harnesses the power of compounding, ensuring a comfortable life later. Financial planning is not just for the wealthy – even small, disciplined savings can help achieve big goals.
Another dangerous myth is treating insurance as an investment; while endowment policies offer low returns, combining term insurance with SIPs can provide better growth and protection. Borrowing to invest may seem smart, but it is a high-risk move that can backfire if markets underperform.
Financial planning is more than just investing – it covers budgeting, insurance, taxes, and emergency funds, creating a safety net for life’s uncertainties.
The key is to start early, stay disciplined, and prioritise protection alongside growth.
1. Should I delay retirement planning?
No, delaying retirement planning reduces the power of compounding. Starting early, even with small amounts, helps build a bigger corpus over time.
2. Is financial planning only for the rich?
No, financial planning is for everyone. Even with limited income, proper planning helps achieve goals like education, buying a home, or saving for emergencies.
3. Are insurance policies good investments?
No, insurance is for protection, not wealth creation. For better returns, use term insurance + SIPs instead of endowment/money-back policies.
4. Is taking a loan to invest a smart move?
No, borrowing to invest is risky. Market fluctuations and high-interest loans can lead to losses, making it a dangerous strategy for most people.
5. Is financial planning just about investing?
No, financial planning includes budgeting, insurance, tax planning, and emergency funds—not just investments. A complete plan secures your future better.
