My Parents Think It’s Too Late to Start Investing

0:00This episode is brought to you by SmartVester. Connect with an investing pro near you at RamseySolutions.com slash SmartVester. Neo is with us in Jacksonville, Florida. Hi, Neo, how are you? Hello, I am so honored to be on the show. Thank you so much. Honored to have you. How can we help? All right. So I have recently had a conversation with my parents about what they are planning to do for a retirement. And I was a little concerned. They don't have any money invested at all right now. And so I was like, I didn't take apart what they have in savings or debt or whatnot. But how can I convince or how can I have a conversation of investing even at their age? So my mom is 55 and my dad is 62. Oh, I'm surprised there's still a lot. There's old is me. There's old is me. I can't believe it. Oh. Well, the thing that has always helped me sell hope, which when you say I'm too old to invest,

1:08that means I've lost hope. And so if I want to sell hope in the world that I'm in, I often use the actual math. Okay. And so I would jump on and play with some numbers and then take the numbers to them and show them on your laptop. Okay. And just go to ramsysolutions.com and look at our retirement calculator. Okay. And say mom and dad, if you put in, I don't know what their income is or whatever, but you could guess at it and say if you put in $500 a month, and when you're 72, here's what it'll be. But here's what it'll be if you put it in at 3% in a high yield savings account because you're too old to invest. All right. So the market has done unbelievably well in the last five years and it's not going to stay at that level forever. It doesn't average as high as it has lately. But in the last four years and 23, I mean, the numbers are in 23, it was 26% in 24, it was 25% and 25 is 18%.

2:09We're already at 13% up this year. So the stock market basically, if you put money in in 23, a lump sum, it would have doubled by now. So if you put 100,000 in and didn't touch it, it would have already be 200,000 just four years later, five years later. So is there anything I need to do on mine to help them? Like, okay, if the next step is investing and I'd convince them that this is a good idea, what would be the next step? Well, the other thing that holds people back from investing, other than belief that it's not going to work, is knowledge. And so anything that we don't understand is scary. That's human nature. Yeah, but to answer your question though, you would reach out to a smart investor pro exactly. And sit down with an investment professional with them. If they would, you know, if you're kind of guiding this journey with them and they want your help in you in the room and your opinions. Hey, hey, dad, I got in touch with a smart investor pro on the Ramsey side and I talked to him for a minute and they said they'd love to sit down and talk to you. And these people are not there to put their glasses down the end of their nose and

3:09talk down to you. They are teachers. And if you learn, your fear goes down. And if you believe the numbers are going to work, your hope goes up and then you invest. Yeah. And what you put your money in, you trust the system, right? Ultimately, which is the market, like you are putting your money in and saying, I trust that this is, it's not going to go to zero. I'm going to trust that if anything, it's going to make me more money. And so when you sit down with an investment professional, they can run those numbers, run the history. You can just see and get kind of a confidence of, okay, it's not as dramatic as you know, dramatic is whatever one thinks, right? When you live in that fear bucket of the market, people, they dream up all the scenarios in their head that aren't true, you know? And so, so that is helpful. When they repeat, they repeat the mythology. Yeah. I'll give you an example. I was doing Fox yesterday. I was doing the appearance on the Fox show, one of the Fox shows yesterday. And they were talking yesterday or day before. I don't know. The Dow has broken another record, 54,000. Okay.

4:10Does anybody remember when grandma said or your friend said, we lost all of our money in the stock market in 2008? Does anybody remember that? And that's an absolute lie. It was mathematically impossible for you to lose all your money unless you bought a single company and that company went broke. But if you were invested in a mutual fund, the Dow, which is now 54,000, had peaked at 13,000 in an in an eight and then dropped in half. Oh, like the 63 hundred. Yeah. And so if you had a million dollars in at 13,000 and it dropped 6,300, you're million turned into a half a million. So I lost half of my money if I bought at the top and sold at the worst possible day. But if you kept it in, but if you kept it in, it went from 13,000 to 6,300, to 54,000, as we said here today.

5:14Our memories are so funny about remembering negatives and not positives. We I read an investment psychologist that did a study one time and they said, for every dollar you lose an investment, you have to make three dollars to feel the same. We're such negative nineties. The human nature is we have this little black cloud over the top of us. Totally. If we lose a dollar, it takes three dollars in gain to feel the same. To feel it. Yeah. But I would also say to the 62 year old dad, dad, you got to get on it. The dollar you put in now is not like the dollar you would put in when you were 30, you know, George Campbell. You must have. I was just in a, yeah, we were just in a content meeting and George was showing about and I'm I need to pull up the numbers maybe for next segment because it was so fascinating. But he talked about, you know, if you put in a dollar, I think it was like at 25, it actually means 72 dollars at, you know, and so you back it out, but you start to see how quickly. And that's not to lose hope, but there's a reality to your money and your time. So it's almost this urgency of getting now.

6:14Like go now. How much can you save? How much can you invest lump sum wise? Because you're going to be 72. You're going exactly. It's going to be now. And you're either going to be now, Po, or you're going to have some more money. What? Why do you always say Alpo? Is that dog? Is it something? Save ramen. No, no. People actually poor people actually opened an eight dog food. Why? Because they have nothing to eat. Have you not heard these stories? But I always wondered why not just ramen? Ramen's not dog food. Exactly. Why? I know. Because it's not as dramatic and not as horrible. That's what I needed. I always was like, why do we always use this example of people eating? And maybe people did. And no, I mean, I've heard the stories. I've heard the stories. And so, but if you need to eat ramen, I open the open granny's cabinet and there was an Alpo in there and she doesn't have a dog. Okay. So there you go. Get her ramen. Well, there you go. But still, I don't know. I don't know if ramen's any better or not, but I've never had either. The chicken flavor. You've never had ramen noodles. No. I have managed to avoid that.

7:15I eat well. Can't you tell? Oh my gosh. I'm under fizz. You're not a millennial. I went to college during those days. You're right. I'm not a millennial. Full of beef ramen noodles. So the Georgia's point is and her point for her dad that you're making. All drama aside is the best time, the old saying, I think it's Frank Lennor, somebody said it. Best time to plan an oak tree 30 years ago. Next best time is today. That's right. Today.