Elliott:  Hi!  I'm Elliott and this is Mental Floss on YouTube.  Today, I'm going to talk about some misconceptions about United States money and finance.

[Intro]

Misconception number one.  You have to be broke to declare bankruptcy.  Filing for bankruptcy has a few requirements, but being broke isn't one of them.  If a person is unable to pay their bills, then they qualify.  And after filing, many people are allowed to keep some property and funds.  The actual amount varies from state to state, but the goal here is to give the person something to support themselves.

Misconception number 2.  Wills determine who gets someone's money after they die.  Actually beneficiaries override wills.  This means that if someone shares a joint account, like bank accounts, savings bonds, or retirement accounts with a person, that is the person who legally receives the money after a death.  According to the Wall Street Journal, "because these beneficiary designations override your will, they need to be carefully coordinated with your overall estate plan."  

Speaking of wills, misconception number three.  You can inherit debt.  Most of the time, debt is the estate's responsibility.  So, basically the money and assets left after a person's death will be used to pay off debt.  If there's not enough money there, the debt usually just goes away.  It doesn't get passed on to someone else.  And this is related to what I was just talking about;  if you're a beneficiary on someone's account, then that money goes to you, not creditors.  But if not, that money is put to the estate and can be used to pay off the deceased person's debt.

Misconception number 4.  You only have one credit score.  As you may know, your credit score is a number that tells lenders how likely you are to repay loans or debts.  But what you may not know, is that you have more than one credit score.  Some believe that there is only one per person, and it's determined by the government.  But, companies, known as credit reporting agencies, or CRAs, actually provide credit scores.  

So, if you request your FICO credit score, it might vary depending on which CRA you ask.  There's also another type of credit score known as an advantage score, and different CRAs will have different score systems, too. 

Misconception number five.  Income affects credit score.  Income will definitely be important to institutions that grant loans, but even if you're a billionaire, it won't factor into your credit score.  Things that do affect you credit score include late credit card payments, maxed out credit cards, and defaulting on loans. 

Misconception number six.  Elderly people live solely on Social Security.  Altogether, Social Security makes up around 38% of the income of the elderly.  As of 2014, the Social Security Administration claimed that "among elderly Social Security beneficiaries, 22% of married couples and about 47% of unmarried persons rely on Social Security for 90% or more of their income."  

But this is not an ideal situation.  In 2012, the average person living on Social Security received a mere $14,400 a year, which is only about $3500 above the Federal income poverty line.

Misconception number seven.  Undocumented immigrants in the U.S. don't pay taxes.  In 2010, undocumented immigrants paid $10.6 billion in state and local taxes; $2.2 billion of that came exclusively from undocumented immigrants in California.  They pay many taxes at both the Federal and the State level, including income, property, and sales taxes.

Misconception number eight.  Most products that Americans spend their money on are made in China.  According to a 2010 study conducted by the Federal Reserve Bank of San Francisco, Chinese goods only make up 2.7% of personal consumption expenditures in the United States.  So, where is everything coming from?  Well, it turns out that 88.5% of the things we buy, were made in the U.S.  

Misconception number nine.  College costs more now than ever before.  Actually, according to the College Board's Annual Survey of Colleges, the cost of college might be more manageable now than ever.  Because as the cost rises, thanks to inflation, so do grants and scholarships.  Factoring in grants and scholarships, the median annual cost of a private college in 1992 was $10,010.  In 2014, it was $13,480.  So, yes, the cost has risen, but it's not increasing at three times the rate of inflation, as some claim.  It also depends on a family's means.  Like, according to Bloomberg Business, "wealthier families now pay more than ever to send their children to college. But for much of the middle class, the real net cost of college has not changed significantly; for much of the poor, the expansion of aid has increased the accessibility and affordability of a college education."

Misconception number ten.  Money can or alternatively,can't buy happiness.  Ok, so we don't usually mess with, like, philosophical questions here on Mental Floss, but there have been some interesting studies on this, so we're going to talk about it.

Many experts claim that money brings happiness to a certain point, then there's a drop off.  Like a 2010 study conducted one economist and one psychologist found "beyond $75,000, money is important for life evaluation, but does nothing for happiness, enjoyment, sadness, or stress.  Both factors are important; it is good to have high emotional well-being, but it is also good to think your life is going well.'  

And research done at the University of Pennsylvania and the University of Michigan examined the happiness of countries compared with their per capita GDP.  They found that richer people tended to be happier, and they did not observe the plateau at $75,000 that the other study did.  

So, let's just see-  Let's just all go make a lot of money, and then see what happens.  And if you're still sad, let me know and I'll be like "I'm so sorry.  I'll take all your money."

If you have a topic for an upcoming misconceptions episode that you would like to see, leave it in the comments.  Thank you for watching Misconceptions on Mental Floss on YouTube, and I will see you next week.  Good-bye.