Summary4 min read

Podcast Episode Summary

Podcast: Ramsey Everyday Millionaires
Episode: How Do I Choose the Right Investments in My 401(k)?
Date: September 22, 2025
Hosts: Dave Ramsey (A), with callers and co-hosts
Theme: How to choose the right investment strategy for your 401(k), particularly later in life, and the importance of not letting your money sit idle. Real-life listener questions provide relatable context and practical investing insights.

Episode Overview

This episode addresses a common concern among listeners: how to make smart, informed choices about investing a 401(k), especially if you're approaching retirement age or have had an employment setback. The hosts review someone’s real-life financial scenario, giving actionable investment guidance, and emphasize the pitfalls of letting retirement money languish in low-return holding accounts.

Key Discussion Points & Insights

Craig’s 401(k) Dilemma (00:16 – 02:22)

Background: Craig, age 59, currently unemployed after a layoff. He owns his house outright, has a 401(k) with $400K, another retirement account with $80K, and $80K in savings.
Challenge: Craig hasn’t invested his 401(k); it’s sitting in a money market-like account, earning little to nothing.
Current Situation: Considering re-entering the workforce in the next three months after a period focused on recovering from health issues.

The Dangers of Sitting on Cash (01:08 - 02:35)

Opportunity Cost:
- Dave Ramsey: “Last year the S and P was up 24%. The year before it was up 26%. So if you missed out on two years, you probably lost 200 grand.” (02:23)
- Craig admits he’s kept his retirement money idle for too long and missed significant market gains.
No Shaming, Just Motivation:
- Dave: “My point is not to shame you for the past. My point is to motivate you for the future.” (02:35)

How to Invest Your 401(k) at This Age (01:09 - 02:23, 03:39 - 04:09)

Recommended Strategy:
- Roll the inactive 401(k) into an IRA.
- Invest equally in four types of mutual funds:
  - Growth
  - Growth & Income
  - Aggressive Growth
  - International
- Dave’s Allocation: “I have mine invested in four types of mutual funds. Equally. Growth, Growth in income, aggressive growth and international. Have 25% in each.” (01:14)
Future Growth Potential:
- At 10% average returns (historically reasonable for the market), Craig’s $400K could double to $800K in 7 years; in 14 years, it could reach $1.6 million.

Mindset and Accountability (03:34 - 04:09)

Taking Responsibility: Craig admits he did every Ramsey Baby Step "right, except for the investing" (03:39).
Dave’s Encouragement:
- “You’ve done great… It feels like you’ve been coasting a minute here… We don’t want the money resting. It works 24/7. So put it back to work.” (03:44)
- Use the resources at Ramsey Solutions—such as SmartVestor Pros—to get matched with a trusted investment advisor.

The Magic of Investing: Money Should Always Work (04:09 – End)

Dave Ramsey on Money’s Potential:
- “The good news, folks, about your investments is your money never gets sick, it never gets burnout, it never gets tired. It works 24/7. It’s automatic. Put it to work, it doesn’t get pregnant. It doesn’t become disabled. It doesn’t have any issues. It doesn’t feel entitled. It just works 24/7. So put your freaking money to work, folks. It’s a magical thing.” (04:11)
Key Takeaway: Letting investment money sit on the sidelines is missing out on one of the most powerful wealth-building tools—compounding returns.

Notable Quotes & Memorable Moments

On Missed Market Gains:
- Dave Ramsey (02:23): "Last year the S and P was up 24%. The year before it was up 26%. So if you missed out on two years, you probably lost 200 grand.”
On Using Money Wisely:
- Dave (03:44): “We don’t want the money resting. It works 24/7. So put it back to work.”
On the Nature of Money:
- Dave (04:11): "Your money never gets sick, it never gets burnout, it never gets tired. It works 24/7… So put your freaking money to work, folks. It’s a magical thing."

Important Timestamps

00:16 – Craig introduces his question about investing his 401(k)
01:14 – Dave's recommended mutual fund allocation
02:23 – Dave highlights the cost of missing market growth
03:39 – Craig admits he didn’t invest his 401(k)
03:44 – Dave’s encouragement and investing mindset
04:11 – Dave’s motivating summary on why money must be put to work

Recommendations and Next Steps

If you have an old 401(k), don’t let it idle—roll it into an IRA and invest in diversified mutual funds.
Take ownership of your financial journey, but don’t dwell on past mistakes; focus on what your money can do going forward.
Leverage trusted resources, such as investment pros, to educate yourself and make informed choices.

In Summary

This episode is a motivating call to action for anyone reluctant or behind on investing. The frank, friendly tone makes clear: It’s never too late to get invested, put your money to work, and make up for lost time.

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Transcript57 lines

[00:06]
A
This episode is brought to you by SmartVestor. Connect with an investing pro near you at RamseySolutions.com SmartVestor Craig is in Miami. Hey, Craig. How are you?
[00:17]
B
I'm well. Yourself?
[00:18]
A
Better than I deserve. What's up?
[00:20]
B
I have a question about. I'm almost 59 years old and I have a question about investing my 401. I'm currently unemployed and I have 401k. And I'm wanting to know at that age, how you do that. Do you. Do you invest in mutual funds or ETFs, or is there something else I should be considering?
[00:39]
C
Okay.
[00:40]
A
Why are you unemployed?
[00:42]
B
I was laid off about a year ago.
[00:44]
A
What are you going to do?
[00:45]
B
Get another job. I was taking some time and I had a couple of health issues and I decided to take care of myself instead for a while.
[00:52]
C
Okay. When.
[00:53]
A
When do you start the new one?
[00:55]
B
I haven't got one yet.
[00:56]
C
Oh, okay.
[00:57]
A
When do you plan to start it?
[01:00]
B
Soon.
[01:00]
C
Okay.
[01:02]
A
As in 10 years or 10 months?
[01:06]
B
Less than 10 months. Probably in the next three months or so.
[01:09]
C
Okay. All right.
[01:10]
A
Just trying to get a finger on that because it might matter. You might need this money to eat. Yes, and I don't want. It's a different answer if you. If you don't need the money to eat, you. You would take your old 401k and you would roll it to an IRA. And I'm 64. I have mine invested in four types of mutual funds. Equally. Growth, Growth in income, aggressive growth and international. Have 25% in each. How much is in your 401k?
[01:41]
B
Yeah, I have some numbers I can give you there, but the 401k has 400 in it. I own my own house.
[01:47]
A
Good. Okay. So 400, if you're 58 and you invested in good mutual funds and it made 10% would be worth 800 if you add nothing to it. At 65. At 72, it would be 1.6 million.
[02:03]
B
Sounds decent.
[02:03]
A
What's it invested in now?
[02:05]
B
Nothing. Just sitting. In the 401?
[02:08]
A
Well, no, in the 401k. It has to be in something. What's it in?
[02:11]
B
It's just in a. Like a. Like a. No, no money.
[02:15]
A
Like a money market type account or something.
[02:18]
B
Absolutely.
[02:18]
A
Oh, very dangerous.
[02:20]
C
Okay.
[02:20]
A
How long has it been sitting there?
[02:22]
B
Too long, Dave.
[02:23]
C
Okay.
[02:23]
A
Because last year the S and p was up 24%. The year before it was up 26%. So if you missed out on two years, you probably lost 200 grand.
[02:32]
B
I've missed more than that, but I've just been doing dumb on that one.
[02:35]
A
Okay. So my point. My point is not to shame you for the past. My point is to motivate you for the future.
[02:40]
B
Yes, I understand. So I paid off my house. My house is paid off. I have 400 in my 401k. I have another retirement account with 80k in it, and I have a savings with 80k.
[02:52]
A
Good.
[02:53]
C
Okay.
[02:53]
A
That's great. What were you making before?
[02:57]
B
Averaging around 150.
[02:58]
A
Good.
[02:59]
C
Okay.
[03:00]
A
Are you married?
[03:02]
B
No.
[03:03]
C
Okay.
[03:05]
A
Have you been married?
[03:07]
B
No.
[03:07]
C
Okay. All right.
[03:10]
A
What was your health problem?
[03:12]
B
My health problem was I had gained a lot of weight in the last years of working there, and I started getting some kidney stone problems and things like that. So I took time off to address that. I lost 35 pounds and the kidney stones are no longer a problem.
[03:30]
A
Good. Congratulations, man. Good. Are you still overweight after 35 pounds?
[03:35]
B
No.
[03:35]
A
Way to go, man. That's awesome. Okay, good. Yeah.
[03:39]
B
I've listened to your show for a while. I did every baby step. Right, except for the investing.
[03:45]
A
Yeah, except you just didn't put it in anything. It's sitting there doing nothing. Yeah, you've done great. That's why I'm asking. It's just. It feels like you've been coasting a minute here and I was just. I was asking some questions because. Trying to figure out why you needed a rest because you took a rest. And I'm good with it. I just didn't know what it was. So that's fine. You don't have to explain it. But, yeah, we don't want the money resting. It works 24 7. So put it back to work. Go to Ramsey Solutions, get you a smartvestor pro that we. One of the people we recommend is sit down, talk to two or three of them and find one that you like. And go sit down and learn about investing. And that'll keep you in the game on the investing. The good news, folks, about your investments is your money never gets sick, it never gets burnout, it never gets tired. It works 24 7. It's automatic. Put it to work, it doesn't get pregnant. It doesn't become disabled. It doesn't have any issues. It doesn't feel entitled. It just works 24 7. So put your freaking money to work, folks. It's a magical thing.