Alice laughed: "There's no use trying," she said; "one can't believe impossible things."

"I daresay you haven't had much practice," said the Queen. "When I was younger, I always did it for half an hour a day. Why, sometimes I've believed as many as six impossible things before breakfast." -- Lewis Carroll, Alice in Wonderland

I ran across a fascinating website recently, featuring things people used to believe when they were children (it's at Here are a couple of examples:

  • My brother and I thought that Grandma lived at the airport because that's where we always went to get her. Then when we were tired of her, we took her back. -- Susan
  • As a child I was totally floored by the fact that my dad owned a monkey wrench. We had never had any monkeys that needed to be taken apart and I could never figure out which part of a monkey it would fit on even if we had. -- Gif

Weird financial beliefs
As I read through more of the submissions, some of them made me think of things we believe, often incorrectly, about money. For example:

  • I used to believe that my parents relied on me to make the traffic lights green. I would do this by absorbing the green from trees and grass with my eyes and beam it into the traffic lights. If I was given enough time I had a 100% success rate. -- Jeff F.

Just like Jeff took credit for green lights, we often take credit for successful investments, even if we've just been lucky. Consider, for example, someone who tried a Hansen's natural soda back in 2004 and really liked it, and then went out and bought shares of Hansen Natural (NASDAQ:HANS). In three years, that investment would have increased 20-fold. Is the investor a genius, or just lucky? Without studying the company, she was probably just lucky.

  • When I was a little child, I used to believe that life insurance made sure that if I died, a new me would come to live with my mum and dad. Nice life insurance, don't you think?! -- Live from Norway

Of course, few people believe this about life insurance. But they do often harbor other related misconceptions. For example, many people think of it as a useful lottery ticket, offering a prize to a beneficiary when someone dies. It's much smarter to think of insurance simply as protection against financial losses. And furthermore, not everyone even needs life insurance. (Learn more in our Insurance Center.)

  • When I was little, I was always happy to have the top bunk so that in case a volcano erupted nearby, then I would be safe from flowing lava. I grew up near Chicago. -- Frannie

Many people, scared of how the stock market crashes now and then, simply avoid it entirely, investing instead in CDs or real estate or bonds or comic books. It's good to think about risk, but a long-term investor can afford to take risk in order to get better returns.

  • In church, I used to believe that after the donations were made, the priest would go outside and hold the plate up, then a light would shine from the sky and beam it up from heaven. Then God would use the money to pay the angels for their services. -- A Confused Kid

Some people think that anytime you buy a company's stock through your brokerage, your money goes to the company. Not so. It's only during an initial public offering (IPO) or secondary offering that a company collects cash for its shares. After that, they're traded between investors.

  • I thought cologne would make me smell better when I drank it. After having my stomach pumped I was told otherwise. -- Doofus

Some not-so-terrific mutual funds engage in the practice of "window dressing," buying shares of hot performers right before it's time to reveal their holdings, so that they'll look good. Unfortunately, by this time, many of the top performers are done performing for a while.

  • I grew up in Texas and when I heard someone was "sentenced to death" I thought that they'd been forced to write the same sentence over and over again until they died, since one of my teachers at school made us write sentences on the blackboard when we were bad. -- Anonymous

Think of "real estate." How real is it, really, if you've bought more home than you can afford? By tapping extreme mortgages, you may be setting yourself up for a fall. Many people these days are finding themselves looking at rapidly rising interest rates, resulting in mortgage payments they can't afford. Others, investing with little or no down payment, may now owe more to the bank than their home is worth. Learn to be a smart home buyer or seller in our Home Center.

  • I used to believe that I could be anything I wanted when I grew up. That's why I wanted to be an airport. My best friend wanted to be a fire truck. -- BP

This one makes me smile, because to a great degree, many of us can still be almost anything we want -- when we retire. If we want to be great travelers, or active golfers, or busy gardeners, we can -- as long as we're planning and saving and investing right now. Let us help you with that, via our Rule Your Retirement newsletter service -- it's prepared by Robert Brokamp, a smart and witty guy who distills what you really need to know into a manageable volume each month. A free trial will give you full access to all past issues, allowing you to gain valuable tips and even read how some folks have retired early and well.

The following articles may also be of interest:

Here's to having some of your dreams come true -- and to believing some fantastic things now and then.

Longtime Fool contributor Selena Maranjian owns shares of no company mentioned herein. For more about Selena, view her bio and her profile. The Motley Fool is Fools writing for Fools.