Wednesday, June 28, 2006

10 financial urban legends

The Basics

Writing checks in red ink won't prolong the float, and yes, you really do have to pay income tax. Here's a look at these and other lingering myths

Every now and then you read about a retiree snookered in a Nigerian bank scam, or some nitwit marched off to jail while still insisting the income tax is illegal, and you just shake your head and wonder who could believe that guff.

Unfortunately, a lot of people.

Just ask Barbara Mikkelson, co-founder and researcher at, a Web site dedicated to the destruction of urban myths. Mikkelson spends a lot of time getting to the bottom of financial tall tales that she encounters.

So does Catherine Williams, vice president of financial literacy at the nonprofit credit counseling agency, Money Management International. Williams has a slew of oddball beliefs folks have shared with her during the company's educational seminars.

"We get into situations where we can't pay our bills, and we become like 3-year-olds: the 'dog ate my homework' routine," she says of Americans' willingness to latch onto urban legends. "We want to believe there is some excuse, and something will bail us out of still owing the money."

Read more at MSN Money

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