The Ramsey Show - App - You CAN Win With Money, and It’s Worth All the Hard Work! (Hour 2)

Episode Date: January 6, 2022

Debt, Investing, Education, Relationships, Home Selling, Retirement As heard on this episode: Sign Up for a FREE trial of Ramsey+ TODAY: https://bit.ly/3rZTUAx Tools to get you started:  Debt Calculator: https://bit.ly/2Q64HME Insurance Coverage Checkup: https://bit.ly/3sXwUn5 Complete Guide to Budgeting: https://bit.ly/3utmVXi Check out more Ramsey Network podcasts: https://bit.ly/3fHhbVE

Live Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where debt is dumb, cash is king, and the paid off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. This is the show, of course, where we talk about your life, your work, your relationships, and your money.

Thank you for being with us. Joe is with us. Joe is in Boston, Mass. Hi, Joe. Welcome to the Ramsey Show. Hi, Dave. I just got married a couple months ago. Congratulations.

Thank you very much. And my wife and I, after taxes, we make about $56 a year and just did the math and, you know, trying to get on a budget and get out of debt. And our expenses every month come out to about $50,000 a year. So we only have a $6,000 savings. And I know we're trying to get out of debt, too, and really attack everything. So I'm trying to figure out how much extra we need to make in a second or third job for the both of us as we move forward, trying to figure out how much we need to pay off debt and build up the emergency fund. How much debt do you have? It's about $30,000. What's it on?

A car payment and student loans. How much do you owe on the car? About $24,000. Okay. Sell it. We just bought it. Shouldn't have. Two weeks ago.

You make $56,000 a year. You put $25,000 or $5,000 into a car that's going down in value that you can't afford to pay the payments on. Well, we make 80, but, you know, take-home pay is 56. And could pay about $400 a month on the car. Yeah. You shouldn't have bought that car. That was a mistake.

Yeah. That's the reason your budget's tight. It wasn't tight for you, did that? Yeah. It's $5,000 a year. Yeah. And it's going down in value. Yeah.

This wasn't the conversation you wanted to have, is it? I had a feeling it would go this way i knew it was i knew it was stupid but i bought it i'm sorry pick it on the newlyweds pick it on the newlyweds well you can do what you want man uh but the the you know you can pick up an extra job, and here's the thing. As long as you have vehicles that equal half your annual income or greater, you're going to struggle with finance. And you guys do. Because you put her car with your car, you're over half your annual income. Or really, really close.

And this was an impulsive, I owe myself kind of purchase, and it was a mistake. So you can fight your way through it if you want to fight your way through it. I don't think it's worth it to fight your way through it. I think it's a stupid car. Get rid of it. But that really shocked your system when I said it out loud. So if you want to fight through it, fight through it. But here's the thing, get on a written budget and then work like six extra jobs. And you know, how much do I

need to make it? Uh, my extra job, $24,000. If you're going to keep a stupid car, uh, because it's got your, it's got your finances constipated. So it amounts amounts to you're all blocked up and that's why you're calling me you can't breathe and so that that's what you're looking at now you know uh i i you know again if you want to fight through it you can it's the slow and the hard way to do it um and if i went you i think you so try it for a few months and you may look up in the fall and go wow this is really a bad thing i'm not liking this i think dave was right he kind of scared the crap out of me i'm not sure i like talking to him i don't even like him that much but maybe he was right so because our goal here is to make sure that we give you the information joe

that's going to do the best for you because we love you and we want you to win. Thank you for calling. Jeff is with us in Austin, Texas. Hi, Jeff. How are you? Hey, Dave. I'm great. Thanks for asking. How are you? Better than I deserve. What's up? Man, I've got a question about retirement investing. My wife and I recently surpassed baby step six. Way to go. Thank you. And thank you for guiding us through it, too. So we have, I have a 401k, she has a 403b.

We're putting 15% into those. I also have a separate IRA. My IRA and my 401K are about equal in money. And now that we're debt-free, we're looking at what we're going to invest in. My company also offers a 457B that I've never contributed to, but now that it's, you know, end of the year, we're doing investment or benefit elections and all that, and I see this thing every year, and I don't know anything about it. All 457 is deferring compensation. It's deferred comp

and it's okay if you don't have anything else in your case what's your household income about 180 way to go man congratulations not a payment in the world no house payment no nothing right that's correct you're just amazing congratulations can you see me smiling yeah i can i can hear it. Way to go. You should be. You should be proud. All right. So what I want to do is I want to max out our 403B, max out your 401K,

and max out two Roth IRAs, and then let's just move on with life. That's going to make you so stinking rich you're not going to be able to breathe. It's going to be amazing. I'm just going to max out what we have. Max out. Max out. Not 15 15 baby step seven is no longer 15 baby step seven is take the government's hands off of any money you can by utilizing roth IRAs 401ks and 403bs you could do the 457 it would be okay but you're going to be just fine

doing that i probably would start some other investing if I wanted to do something in addition to maxing out all of those. But you max out all those, put the most you can in your 401K, the most you can in her 403B, and the most you can in two Roth IRAs, and all in good growth stock mutual funds, all growing. You're going to have so much money, it's going to be unbelievable. Very, very well done. Absolutely amazing. That's just so cool.

Another Baby Steps millionaire right there, folks. That's who we're talking to. I'm so excited about this new book coming out next week. It's just fun. Just absolute fun. So you can still get it because it doesn't come out until Tuesday. If you jump online right now at RamseySolutions.com for $20, and we'll throw in $150 worth of goodies.

So go ahead and get the Baby Steps Millionaires book. It's the only book I've done in the last eight years, and it may be the last one I do. Who knows? I'm planning on another one. I wasn't planning on doing this one. But I just felt like I needed to convince you guys again that you can do this stuff because the end game is to become wealthy and outrageously generous.

That's end game here. With the money thing, anyway. And so I'm going to show you how. I'm going to make the case. Even to those of you who don't think that Dave knows anything about wealth building. I'm going to make an arithmetic case. A mathematical case. Let's just do it that way for you.

That you can't deny. RamseySolutions.com. Get it. In an uncertain world, being a good steward of your money is more important than ever. While some circumstances can't be controlled, there are items within your budget you can take charge of, such as your healthcare costs. For nearly 40 years,

Christian Healthcare Ministries, or CHM, has provided a budget-friendly means of sharing for medical bills when our members need it. Learn more by visiting chministries.org slash budget. That's chministries.org slash budget. Christian Healthcare Ministries is a Ramsey Trusted Provider. That's chministries.org. Thank you for joining us, America. We're glad you're here.

Open phones at 888-825-5225. This is The Ramsey Show. Parker is with us in Houston, Texas. Hey, Parker. Welcome to The Ramsey Show. Thank you, Mr. Ramsey. How are you today? Better than I deserve. What's up in your world? So just to give you a bit of context, I'm 22 years old. I'm married. I'm completely debt-free.

I have a year left in my master's, and my wife is an accountant right now. About a year ago, I inherited about half a million dollars from my grandfather in seven individual stocks. And he was a broker advisor in his career and candidly is pretty obsessed with these stocks and has a pretty tight hand. I just want to honor God with this wealth and wanted to call you to see how financially I can handle this, you know, tax-free growth. Is it unwind the positions and putting them in mutual funds? And also, relationally, how I could talk to my grandfather about, you know,

pulling the money possibly out of these positions that he's invested for me. Wow. What's your master's in? Finance and commercial real estate. Okay. Good for you. Thank you. Okay.

So you didn't inherit them because he didn't pass that's true he did uh that's right he's still alive so he gave or gifted them to me about a year ago when i turned 21 wow what a wonderful gift it is yes sir five hundred thousand dollars worth of stocks and seven stocks and he's made all his money in this made the money in these stocks and so he's very emotionally invested in this process yes sir he is and i want to honor him i went on to the lord and i want to you know manage this well yes sir so personality wise is is how's he react when you start talking to him about this I so I haven't brought up no I say if you did you know him what you start talking to him about this is he going to be dismissive of you or is he pretty open-handed and once he gave it to you as a gift he's

released it or does he still feel like you by god ought to do it the way he says i think it's going to be more towards the latter of likely advice on hey i think you're making a mistake here if that if that makes sense where you know i've seen these been with these stocks for x years and i know there's this, that, the other with them. And I don't think you should do that. And probably more on that side of things, if I were to put it. And then if you went ahead and did it, he's going to be really upset. I would think so, yes, sir.

Yeah. Wow. Well, there's a lot of stuff going on here. The reason I'm hesitating, I kind of put myself almost in Grandpa's shoes for a minute, because I am that guy, right? I'm the guy with a lot of opinions, and I'm the Grandpa. So I could be on the other side of this, and i might be acting like you're talking about i so i'm trying to think through how to act how to treat this this character oh my gosh because i kind of like him oh my gosh um even though i disagree with the technicalities of

this all right so well i think there's a different conversation that you just have, okay? And here's the thing. There's a story in the Bible of Nehemiah building the walls, rebuilding the walls around Jerusalem with King Nebuchadnezzar's permission. And when he went back to do that, in order to get the help of the people, he didn't go in and announce, ta-da, we're all going to get our button gear and rebuild these walls and do a lot of hard work. And, you know, he didn't make like a pronouncement. Instead, he just walked around the city for days and days for months saying,

did you guys notice the walls are down? You know, when the walls are down down we're susceptible to attack from enemies you know when the walls are down the pride of jerusalem is taken away when the walls are down this is and he just kept talking about did y'all notice the walls are down here's the bad things happen when the walls are down the walls are down the walls are down i'm concerned about the walls being down and pretty soon people started coming up to him the leaders of the people saying, did you know the walls are down? And he went, no, you're kidding. And you know what I'm saying. And so he didn't, he wasn't manipulative, but he drew them into the conversation.

And I think that's your only shot here. Because otherwise you're going to be an ungrateful little 21-year-old snot, and you don't want to be that guy, right? No, sir. You're not that guy. You you're not that guy you're a wonderful young man and so i would sit down with grandpa and go you know what here's what i see i see i just got five hundred thousand dollars did you know that this guy gave me five hundred thousand dollars grandpa it's amazing did you this guy he just gave me $500,000, Grandpa? It's amazing. This guy, he just gave me $500,000.

I mean, did you see him do that? That was pretty amazing. And just let him kind of soak in that a little bit and go, you know. And, you know, I'm new at all this stuff, but, Grandpa, the stock thing is not very well diversified from what I've been learning, and it scares me. And just let him talk about it. And he may get more entrenched in his position when he does that but but he also might uh you know come along and you know you just keep keep presenting him with the problem i'd like to talk to you about this but i don't know how to talk to you about this because i don't want to be ungrateful

and i certainly don't want to harm our relationship and i also want to honor god and this scares me and i'd like to i don't know how to talk to you about this because i you got you're so strong in your opinions and i i and i i would you teach me how to talk to somebody like you you know you know i'm saying this kind of a right and just wear him down over several months every time you're with him you have these conversations where you're just pulling him into the discussion about how grateful you are and how you want to honor god and how scared you are and how this is an intimidating thing because you you're caught between your opinion and and his um and your desire to please him because that's exactly where you're caught.

And just say it all out loud. Grandpa, help me solve this problem. And he may come to the point, he throws up his hand, he goes, hey, listen, just do whatever you want. This is what I think, but I'll be okay with whatever you want because I love you. And if you can get him there, then you got him, right? You can do whatever you want to do because that's really what he should have done. One of my things is I have a rule.

I don't give people money that won't accept my input, but once I've given them the money, I no longer control them. That's the line, and that's the line he's crossed here a little bit. I don't like that, but I understand how he did it because I would do that if I hadn't pushed myself to do that because I'm a pretty controlling person anyway it's my nature and so i uh that's why i can kind of kind of back reverse engineer this a little bit out loud in front of everybody you and me right this is a great conversation it's a great boundaries dr john deloney conversation i wish john was with me today to chime in on this but um that's probably how i would get at it and and and just uh i don't want

to dishonor you but i also don't want to feel like you gave me something that i can't do what i want to do with that's kind of weird and i don't want to dishonor god and i don't want to i mean what if these stocks went sideways grandpa how bad would you and me and god feel you know i mean i don't think god would care much but but you know these are the kind of things that just run through my head and just have these instead of coming in and making pronouncements like i talked to dave ramsey and i'm putting it in mutual funds it's my money you gave it to me. You no longer have a say, which is technically accurate, but it's not going to go well. Right, right. And so I wouldn't do that.

And you're going to be okay in seven stocks. You're not going to lose all your money. It is a higher risk portfolio, right? And he has to say that if you said it to him. It's a higher risk portfolio. And I'm 21 and the risk scares me. But I want to honor you. And yet I want to be a man and have my own opinion.

And how do I do all that, Grandpa? Well, I think you draw him in like that, he's going to start talking against himself before he knows it. It's probably what would happen to me hey man thanks for the call you're a neat young guy what a wonderful opportunity is in front of you very cool this is the ramsey show Thank you. In the lobby of Ramsey Solutions on the debt-free stage, Vincent is here. Hey, Vincent. How are you? I'm great.

How are you? Better than I deserve, sir. Welcome. Where do you live? I live in Chicago. Cool. Welcome to Nashville and showing up here on a snowy day. Yeah, I didn't know you guys get this much snow down here.

We didn't either. And you can attest to the fact that nobody here knows how to drive in it. So it's very, very interesting. The Snowmageddon is two and a half inches. But there you go. So welcome, dude. Good to have you. Thank you.

It's a pleasure to finally meet you. I feel like I already know you. You do. We've been hanging out together for a while. So how much debt have you paid off, Vincent? I've paid off $90,743.82. Way to go. How long did that take?

27 months. Wow. And your range of income during that time? $25,000 up to $100,000. Whoa, there's a story there. Yep. Okay. So what kind of debt was the $91,000?

So I had $79,000 in student loans and $11,000 on my car. Okay. Very, very good. How old are you? I just turned 26 last week. Good for you. Thank you. Good for you.

So what do you do for a living? I'm an accountant. Okay. So what happened from the 25 to 127 months? So I started my debt-free journey right before I graduated, April of 2019. Oh, okay. It was about four months before I started my full-time job. I had finished up my coursework, finished up my CPA,

and I started looking towards the next steps in life and addressing all the student loans that I had accrued over the years. Right in time for COVID. Yeah, exactly. So I was talking with one of my friends and he told me about the podcast and that's how I kind of got in touch with, um, your program, started listening to the podcast. Um, and then, yeah, that's, that's kind of how I started my, uh, my debt free journey. Wow. Very cool. So how did you go from 25,000? Cause you were just

getting, you were just doing odd jobs? Exactly. But you got the big accounting job now. Exactly. So when I was starting, I just got a job at a local pizza place making pizzas. I heard on one of the early episodes that I listened to, you're not going to see the inside of a restaurant unless you work there. So I figured I'd learn how to make some pizzas. Very cool.

Well, you did that in 27 months. That's pretty impressive. Yep. You haven't done much else. Yep. Yeah, and then the other thing that helped was I picked up Uber Uber Eats for about the last year or so, and then I just went crazy with that. So there's such a high demand for drivers in Chicago

that I was able to kind of increase my income that way as well. Yeah, I bet. I bet. You did really well. And now you're done. All done. How's it feel? It feels incredible, like I'm free.

So, I mean, you're a guy of singular purpose. When you set out on this, I can just tell by talking to you, looking at you, you just went for it. Yes, sir. There was no real question you just go in all in all in yep yeah we're going to jump in the deep end yeah good for you so what do you tell people the key to getting out of debt is the key to getting out of debt is um everyone says it's it's the budget if you don't get the budget right nothing else will work so um why do you think that is i mean you're an accountant well there's a power to that and that's why everybody says it it's true it's not just cliche but i mean as an accounting person you and our numbers guys we're geeks right so we we see

these numbers all the time we see things in numbers other people don't see maybe there's something powerful about this budget thing exactly like if you don't assign ever if you don't have an assignment for every dollar before the month begins, then the ants are going to take it, carry all the dollars off. So it's like, that's good. I like that. The ants are going to, cause I can see it though. Like I'm carrying a potato chip away. Yeah. It's like, exactly. It's like $5 here, $20 here. Um, if, if you don't have that, that plan of what you're going to do with every single dollar, then your financial plan is really not going to work. Yeah, you're just stuck. Yeah, sticking to a plan is probably the most important.

Well, it gives you the guardrails to stay in, and that way you don't slip off the road accidentally. Exactly, yeah. Well done, man. Well done. Very well done. This is great. How does it feel you're done? It feels amazing um i'm uh i'm honestly like kind of in disbelief like it's it's it still feels like surreal

um just like all like after all the sacrificing and um just to finally be done and um recently got engaged to my fiancee, Madison. Yay! Let's see it, Madison. Let's see the ring. Hold it up. Yay! She was my biggest cheerleader along the way, and we had definitely a lot of date nights in where we'd just make food at one of our apartments

and watch a movie, and she's always been loving and supportive. Yeah. When's the date? It's going to be october all right good very fun good for you man thank you this is so good and what does she do for a living she's also an accountant okay of course of course so you guys are gonna do extremely well that's amazing yeah very very good well that's the number two uh uh career of that we found in the millionaire

research of people that become millionaires accountants number one's engineer number three's teacher so um very cool man yeah i love it you're awesome man you're heroes what a great way to start your life completely free got something to talk about she's cheering you on this is everything's on the right track you're just you're amazing well done you're a hero man good job good job so what are your parents did you grow up in a family that was responsible like this and or are they looking at you thinking you're crazy no absolutely not um they're they're looking at me like i'm crazy they actually had your book they never read it um but i was i was fortunate enough to um to receive it from them. Um, but I was always taught to build up my credit score and, um,

invest. So, so paying off, paying off all my debt kind of ran counter to what I had been taught like my entire life. Um, so I mean, they're definitely supportive of me and, Oh, they love you. They want you to win, but they think you're a little weird yeah exactly yeah um that's okay that's kind of how i knew it was working it was like my friends thought i was weird um everybody you know kind of thought i was doing something different so um that let me know that i was right on track that does give you energy it really does if your broke friends are making fun of your financial plan it means you got a good one yeah that's good very good very cool good job man cool. Good job, man. Well done, well done, well done.

What a great life you've mapped out for yourself. Thank you. Well, we got a copy of Baby Steps Millionaires for you. It comes out next week, but we'll give you an advanced copy today because that's definitely you and Madison's next chapter is to get on the business of building some wealth and being outrageously generous as you go along. And you're definitely in a position to do that.

Thank you. Very, very cool. Very well done. Also, a copy of the Total Money Makeover for you to give away to somebody and disrupt their lives and disrupted yours and get you started. And that's exactly right. If anybody asks what you did, you just hand them that and say, this is what I did right here.

That's what I did right there. So very cool. I want to hear from you when your baby steps millionaire, too. Yes, sir. You'll be on your way. Absolutely. Very good stuff. All right.

It's Vincent from Chicago, Illinois. $91,000 paid off in 27 months, making $25,000 to $100,000. Count it down. Let's hear a debt-free scream. Three, two, one. I'm debt-free. Yeah. Yeah.

That's how it's done right there, man. That's exactly what we do around here. That's pretty cool. So it doesn't matter if you're 26 or 36 or you're 46. That's what you do. 56 or 66. It doesn't matter. Just put 26 or 36 or you're 46. That's what you do, 56 or 66. It doesn't matter. Just put whatever decade you want to put in there.

This is doable. It's very doable. He did this in 27 months. He was making no money, got his first job with his master's in accounting, got his CPA, and added to that substantial income by delivering Uber Eats and pizzas. Then he's done. Did he deliver pizzas the rest of his life? Did he work Uber Eats the rest of his life?

No. He did it for 27 months. Not even, really. Probably 24 months. But the whole journey was 27 months long. So what this guy is telling you, what Vincent's life is telling you, it's speaking to you right now when you're listening to this, when you're looking at this on YouTube. It's speaking to you very clearly. You know what it's telling you? Vincent's life is telling you, you can do this.

You can do this. And it's worth doing. It's worth the trouble. And you need to get about the business of being a grown-up it's past time for you to get about the business of being a grown-up yeah i'm talking to you this is the ramsey show guitar solo Thanks for joining us, America. We're glad you're here. This is the Ramsey Show. Common sense for your dollars and cents, for that matter, for your life. Common sense is so rare in America today. When you've got it, it's like having a superpower.

John is in Atlanta. Hi, John. Welcome to the Ramsey Show. Hey there, Dave. How are you? Better than I deserve. What's up? Not much. My wife and i are in baby step two uh we have about 153 000 in debt um we are toying with the idea of potentially selling our home in order to become debt free wow 15 Wow. The 153 count the house? No, it does not. What's that on?

There's about 235 on the house. Okay. What's the 253 on? The 153? Yes, I'm sorry. Mostly student loans. How much are student loans? No, I don't have it exactly.

How much is a car? Not in front of me. Twenty-seven. How much is the boat? No boat. Okay. What else is in there besides a car and a student loan? That's about it.

We paid off all of our credit cards are gone. Got you. What's your household income? We paid off all of our credit cards are gone. Got you. What's your household income? We paid off about $25,000 last year. Good for you. What's your household income? Around $130,000. Okay, good.

Okay. What's the house worth? I haven't had an appraisal on it, but trending in that area uh that house would probably go for around 400 okay okay all right uh do you like the house we like the house but it's not a I think we're both at the point now where renting an apartment for a year or two doesn't sound like such a bad idea. 100% debt-free. 9 and 11, yeah.

100% debt-free sounds awfully fun. Yeah, it does. Okay. And you've been working on this for a year yes sir okay all right this question often comes up when people first start and if it's when you first start i'll i will tell you to try it for a year and see how it goes and see what you can come up with because selling a house is very expensive emotionally, financially. It tears up your time. It takes a chunk out of your year.

You know, it's not as simple as, you know, taking a pair of jeans back to the store that didn't fit. I mean, it's a problem. You know what I'm saying? Right. Right. That's what I'm telling you. Yeah, it's taxing on you, and that's why it's the last thing I tell people to do is to sell their house. And if you told me you didn't like it, that would help, you know. But all you're saying is it's an okay house, but we're at the point that we can see that this is going to take us, you know, this is going to take us three hard years, maybe even a little bit more,

or we can give up this house and be done with this. Right. And this is the tradeoff. Yeah. There's not a wrong answer, John. It would be a matter of personal preference. What would Sharon and I do? If we were ambivalent about the house meaning we were kind of in the middle we don't care one way or the other we'd probably sell it

because we would we would relish the now that we know what it feels like to be debt-free we would relish that idea more than we would home ownership for the next because in one year you can save up a down payment start the process again again, right? Right. So go live in an apartment for one year with everything paid for, tight budget, build you up a nice emergency fund, a nice down payment, and then go buy you a house on a 15-year fix where the payment's no more than a fourth of your take-home pay. And so you're one year out of the housing market. You're taking advantage of this white-hot market right now.

One year or 18 months from today it will have calmed down from where it is now somewhat i don't know how much but it will have calmed down it's not gonna get worse uh it's crazy out there right now so um great time to sell uh that's another reason to think about it so yeah we probably would but if you guys talk about it tonight and you go you know we just really good we're gonna gut it out we're gonna fight through this for three years and knock this debt out and keep this house that's not a that's not a wrong answer okay because there's nothing here that's demanding that you do this it's a matter of it you are making the choice between making a move,

apartment for a year, buying another house 18 months later, give or take, and you're making that choice between that and being debt-free today or fighting for three years. It's just the tradeoff of that. And both of those are things that give you a good outcome five years from now. Five years from now, with either way you go, you're going to be in great shape. Got it. So just make the choice which way you want to play this.

But I probably wouldn't. I don't own any houses I'm that tied to. I like real estate, but there's stinking house on every corner, so I just don't get all jacked up about houses. So I probably, I'm out of there because houses to me are just commodity. I don't get a lot of emotion about them. But Sharon might argue with me on that, and then I might let her win because she does often.

Jana is with us. Jana's in Pullman. Whoa, I hit the wrong button us. Jana's in Pullman. Whoa, I hit the wrong button there. Jana's in Pullman, Washington. Hi, Jana. How are you? I'm doing all right. Snow has my kids all home today.

Cool. Me too. Yeah, me too. All my kids are home today. What's up? So when I was in high school, I sold animals at the fair through 4-H, and my fifth-grade teacher told me that I should invest some of it. I did not understand what wise, wonderful that advice was until I was an adult and took FDU.

Now, my 12-year-old son sold an animal at the fair this year, got a big check, and we were talking about what to do with it. And he says investing sounds like fun or sounds interesting. How much did he get? He got like $1,000. Okay. And we already have some set in savings. So I'm just wondering, how can we teach him? I'd like to let him invest even just a little bit so he can learn about it.

And he's, he's my oldest. He's very responsible. He's my big saver. Um, you know, he got a thousand from this check, but he has like $800 saved up from past years just because he doesn't spend. Um, and that was like his spending money. He's saving, he's not really spending it. So I'd like to teach him, but I don't want to make him into like a little day trader. No, no, no, no, no. We're not doing that.

So how can I safely... Well, the downside is that it's pretty boring. To do it right, the proper way to teach him is to put the money in mutual funds and let him just watch the mutual fund. It's pretty boring because it's not day trading. It's not single stocks, and we're not studying companies. I don't want to teach him that.

I don't want him doing that. I don't want him thinking that's the right way to do it, so I'm not going to model that. And so if you want to do it, I would just sit down with a smart investor pro and pick a mutual fund and put it in there, and then once a month sit down and go over the mutual fund statement with him, not once a day, once a month, and say, okay, here's the number of shares you have. And here's the share price. Multiply those two, and you know what your account is now worth.

And this is how this works and here's how there's the you can review the stocks that are inside the mutual fund and look at those companies if you want to uh and you know learn about how a mutual fund works and learn about the actual paperwork of opening up the mutual fund and and but it's really not there's a lot a lot of activity once you get it open it's just kind of tracking it um do i keep him away from people like my like his grandfather who does a lot of single stock yes okay because i'm not trying to teach him to do that listen why teach him to do something you don't think is a good idea you know i i didn't i teach my kids how to do single stocks i taught them how to do mutual funds now in my case what i did the. I taught them how to do mutual funds. Now, in my case, what I did, the way I taught them,

was that they just tracked their college fund that I was funding. They didn't put their money in mutual funds until they were adults. But they knew how mutual funds worked because we sat and had the little nerd conversation at the table with my money that I was doing. And so if they rolled their eyes and were bored, it wasn't the end of the world. But it's not a real active process. Real investing is not. You know, in speculating, gambling is an active process. And I wouldn't teach him that. Hey guys, this is James, senior producer for The Ramsey Show. Did you know over 18 million people listen to The Ramsey Show every week?

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