Nathan, a 25-year-old caller from Virginia, reached out to "The Ramsey Show" after receiving a $200,000 inheritance from his late father. With limited experience managing money, particularly in large sums such as this, he asked Dave Ramsey:
"Should I invest this money into a business? Save this money? What should I do if I want to become a millionaire by the time I'm in my 30s?"
Here's what Ramsey said.
Don't Miss:
- Can you guess how many retire with a $5,000,000 nest egg? The percentage may shock you.
- Deloitte's fastest-growing software company partners with Amazon, Walmart & Target – Many are rushing to grab 4,000 of its pre-IPO shares for just $0.26/share!
"It Takes Money to Make Money" Is a Myth
At the beginning of the call, Nathan acknowledged the old adage it takes money to make money, thinking that this new inheritance would give him the opportunity to make a lot of money quickly.
"‘It takes money to make money' is not a true statement," Ramsey said. "That’s a statement that broke people say as an excuse to not become broke people."
Ramey pointed out that while money can be an investment tool, it's not the only way to build wealth. He said most people who accumulate wealth don't do so because they start with a large sum—they build it through smart habits, hard work, and persistence.
Trending: The average 401(k) balance soars to a record-breaking high – Here's how to know if your nest egg is keeping pace.
For Nathan, who earns $35,000 a year, Ramsey explained that his wealth won't come from an inheritance alone. It will come from developing financial discipline and making informed decisions. Nathan’s wealth-building journey should focus on creating healthy habits with his money, not relying on windfalls.
Slow Down and Play It Safe
Ramsey's next piece of advice to Nathan was to slow down. Jumping into risky investments without understanding them could lead to loss. He urged Nathan to treat the inheritance as if it were someone else's money, focusing on not losing it first, and then figuring out how to grow it slowly.
Instead of rushing to make quick decisions, Ramsey advised Nathan to take a patient, careful approach. While excitement and urgency can tempt people into risky ventures, Ramsey emphasized that wealth is built over time through discipline and steady progress—not wild gambles.
Avoid the Pressure of Risky Investments
Ramsey also warned Nathan against making hasty investments in unfamiliar or complex opportunities. "Don’t put money in something you don’t understand," he said.
It's common for people to lose inherited money because they're lured by "exciting" ventures that they don't fully understand. Ramsey advised Nathan to invest in things he understands and is comfortable with, avoiding high-risk options that others might pitch to him without clear knowledge of what they're actually doing.
Long-Term Growth with Simple Investments
Instead of seeking out flashy opportunities, Ramsey recommended Nathan focus on simple, long-term investments, like growth stock mutual funds. These funds have historically provided steady returns, and Ramsey suggested that if Nathan invests his inheritance and leaves it untouched, it could double roughly every seven years.
While Nathan's dream of becoming a millionaire by 30 is ambitious, Ramsey's advice showed that slow and steady wins the race. By thinking long term and keeping his investments simple, Nathan could see significant growth over time without the need for risky bets.
Read Next:
- Many are using retirement income calculators to check if they’re on pace — here’s a breakdown on what’s behind this formula.
- ‘Scrolling To UBI' — Deloitte's #1 fastest-growing software company allows users to earn money on their phones. You can invest today for just $0.26/share with a $1000 minimum.
© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
