Personal finance personality Dave Ramsey has written multiple books and spent countless hours behind the microphone on his radio show giving advice.
He talks with people about getting out of debt, buying homes, purchasing cars and investing for the future.
On many occasions, Ramsey has the opportunity to talk with someone who has amassed a good deal of money already and is looking for his views on the smartest ways to handle that wealth.
One such occasion occurred recently, when a woman identifying herself as Naomi explained her financial situation and what it was she was trying to figure out.
“Dear Dave,” she wrote, according to KTAR News. “I’m a widow, and I retired recently. My husband took care of most of our finances. We never had any debt, but after my husband died and I started learning a little bit more about how money works, I’m concerned too much of it may be invested in CDs.”
She then offered a brief review of her accounts.
“The total nest egg is a little over $1.5 million, with $300,000 of that in CDs. There’s also a $317,000 annuity, a 403(b) and around $900,000 in IRA mutual funds,” Naomi wrote. “I want to learn even more about financial matters, so how do you think I should handle things going forward?”
Ramsey answered, first with a quick explanation of his thoughts about CDs and then with an assessment of Naomi’s situation.
“Well, the CDs (Certificates of Deposit) give you stability, if nothing else. They’re generally considered a safe, low-risk investment, but they don’t really give you the best bang for your bucks,” he wrote. “If you’ve had good luck with a variable annuity, that’s fine, too. It sounds like you’ve also been very fortunate with your mutual fund investing. So, with all this money in different areas, you’re definitely diversified.”
Finding the Right Financial Advisor
The author and radio host explained, in his view, the most important thing she should focus on while continuing to learn: finding a financial advisor with one key characteristic.
“In my mind, it’s just a matter now of wrapping your arms around it all and developing a deeper understanding of things going forward,” Ramsey said.
“I’d urge you to find an investment professional in your area with the heart of a teacher,” he continued. “I’m talking about someone who wants to help people, and is interested in more than just making money off fees or commissions.”
Ramsey told Naomi he appreciated her curiosity.
“It sounds like you understand the value of learning about this stuff, and I’m really impressed by that. It’s a smart and necessary thing,” he wrote. “From here on out, every time you see an investment person — whoever it may be — your goal should be to leave the room smarter, and with more financial understanding, than you had before.”
He then shared a personal thought.
“Naomi, I’m truly sorry about your husband,” Ramsey wrote. “But you two did an amazing job with your finances over the years. You’re worth well over $1.5 million, and you have no debt. So, you’re basically set for life.”
“Be wise, and be careful, Naomi.”
Get exclusive access to portfolio managers and their proven investing strategies with Real Money Pro. Get started now.