How Do I Start Investing?

Summary

Podcast Summary: How Do I Start Investing?

Podcast: Ramsey Everyday Millionaires
Host: Ramsey Network (Dave Ramsey, Chris Hogan, et al.)
Date: January 5, 2026

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Episode Overview

This episode focuses on practical, actionable investing advice for everyday people, highlighted by a listener call from “Mac” in Chicago. The Ramsey team discusses how to handle extra cash after getting out of debt and building a solid emergency fund, explores the emotional fears surrounding investing, and provides a roadmap for responsible, disciplined wealth building. The discussion centers on real-life decisions and long-term thinking, making it relevant for anyone preparing to invest for the first time or deciding what to do with significant savings.

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Key Discussion Points & Insights

1. Caller’s Situation: Solid Financial Foundation, But Not Sure What’s Next

(00:14–02:20)

• Mac has no debt, a $25,000 emergency fund, and is already investing 14.5% of his income in a Roth 401(k) (effectively maxing it out).
• He has $110,000 in cash savings (in a high-yield account) and the ability to save an additional $2,500/month.
• He's renting and not ready to buy a house yet due to possible career moves, though he could afford one.
• Quote:
  “I’m not sure what to do with my cash and my extra money. ...There’s definitely a little bit of fear behind it too, because I don’t want to make the wrong choices.” — Mac (00:24)

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2. Advice: Stay Liquid if a Major Purchase Is on the Horizon

(02:57–05:01)

• Dave Ramsey advises that since Mac may want to buy a house in the coming years (and career location is uncertain), keeping the bulk of his savings liquid in a high-yield savings account is wise.
• Cited national median home price ($424,000) and the need for a large down payment, especially in high-cost-of-living areas.
• Continue 15% income investment, but avoid tying up house money in the market.
• Quote:
  “Part of me says what I would do if I were in your shoes is… keep investing the 15%. But [...] keep [the extra] in a high-yield savings... until I know where I’m going to buy.” — Dave Ramsey (03:02)

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3. What and How to Invest: Diversification & Discipline

(05:12–06:22)

• Once ready to invest beyond emergency and house cash, Dave suggests annual Roth IRA contributions.
• Recommends four types of mutual funds for diversification:
  • Growth funds
  • Growth and income
  • Aggressive growth
  • International funds
• Breakdown for clarity: Could also be labeled as “mega cap, large cap, small cap, and emerging markets.”
• Both Dave + John invest this way—modeling their approach for listeners.
• Quote:
  “Four different types of mutual funds is what I would suggest... it’s just a way to make sure that you’re very diverse... and that’s the way my money is invested.” — Dave Ramsey (05:40)

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4. Addressing Investment Fear: Risk, Patience, and Perspective

(06:22–07:08)

• Chris Hogan acknowledges natural fear: You can’t eliminate risk entirely. Even diversified portfolios are subject to market swings.
• Emphasizes staying the course and ignoring short-term volatility (“If the stock market drops, I’m still going to make my same contribution because I’m playing a long game with it.”).
• Mac is reassured that his 401k and suggested mutual funds are in the same underlying asset classes.
• Quote:
  “Part of investment is a risk, of course... The day it goes down, I’m still going to make my same contribution because I’m playing a long game with it.” — Chris Hogan (06:32)

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5. Big Picture: The Value of Opportunity & Avoiding Speculation

(07:08–08:38)

• Chris Hogan and Dave stress the power of opportunity in having lots of cash: flexibility for home purchases or other big moves.
• Warn against “itchiness” to chase speculative investments or crypto due to impatience or peer pressure.
• Real estate as a long-term part of an investment portfolio is encouraged—cash gives you rare buying power.
• Quotes:
  “If you have a quarter million dollars in a high yield savings account, you have something they don’t—$250,000 to do whatever you want, whenever you want.” — Chris Hogan (07:26)
  “What I don’t want you to do... is get into speculative stuff and crypto and... get yourself in trouble.” — Chris Hogan (08:11)
  “It’s the same [assets] that’s in your 401k... If you’re still unsure, you can check out a SmartVestor Pro...” — Dave Ramsey (08:38)

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Notable Quotes & Memorable Moments

• “I’m not sure what to do with my cash and my extra money.” — Mac (00:24)
• “Keep investing the 15%. But [...] keep [the extra] in a high-yield savings.” — Dave Ramsey (03:02)
• “Four different types of mutual funds... it’s just a way to make sure that you’re very diverse.” — Dave Ramsey (05:40)
• “If the stock market drops, I’m still going to make my same contribution because I’m playing a long game.” — Chris Hogan (06:32)
• “You have something they don’t—$250,000 to do whatever you want, whenever you want.” — Chris Hogan (07:26)
• “What I don’t want you to do... is get into speculative stuff and crypto.” — Chris Hogan (08:11)

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Timestamps for Important Segments

• 00:14 – Mac introduces his situation and asks about investing extra money
• 02:29 – Discussion of renting, possible relocation, and home-buying timeline
• 03:02 – Dave’s advice to keep cash liquid due to life uncertainty
• 05:12 – How to invest extra beyond house fund: Roth IRA, four kinds of mutual funds
• 06:22 – Talking through risk, volatility, and sticking to the plan
• 07:26 – The strategic value of liquidity and the temptation to speculate

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Tone and Closing Impressions

The episode is practical, encouraging, and laced with the classic Ramsey confidence and conversational directness. Listeners are reminded to invest for the long haul, embrace disciplined strategies, and avoid reactionary or speculative moves—even as wealth grows. The panel’s advice centers on living below your means, future-proofing your finances, and not being afraid to stay liquid if a major decision (like buying a home) is forthcoming.

This episode provides a roadmap for both first-time investors and those transitioning from disciplined saving to intentional investing—balancing wisdom, patient wealth-building, and courage to start.

Transcript

[Dave Ramsey]

Foreign.

[Chris Hogan]

This episode is brought to you by SmartVestor. Connect with an investing pro near you at RamseySolutions.com SmartVestor all right, let's go.

[Dave Ramsey]

To Mac, who's in Chicago, Illinois, Chitone. What's up, Mac?

[Caller (Mac)]

Hey, how you guys doing? I'm a big fan of the show. Thanks for having me on.

[Dave Ramsey]

Yeah, you bet. What's up?

[Caller (Mac)]

My question is about around investing. I'm not sure what to do with my cash and my extra money. At the end of the month, I am investing fully in my Roth 401K. I'm doing 15% there and kind of maxing it out, but I have a lot of extra cash left over just sitting in my savings account. And I feel like I should be investing. I don't know how to start. I don't know what to buy. And there's. There's definitely a little bit of fear behind it too, because I. I don't want to make the wrong choices and I don't want to lose it. So I'm calling for some financial guidance.

[Dave Ramsey]

Cool. I like this question.

[Chris Hogan]

You're awesome, man.

[Dave Ramsey]

Yeah.

[Chris Hogan]

Appreciate the call.

[Dave Ramsey]

Way to go. So you're already maxing out a Roth 401K. Now, are you just maxing it out or is it 15% of your income?

[Caller (Mac)]

Well, it actually comes out to 14 and a half percent of my income is maxing out the legal limit. So it kind of. Yes to both.

[Dave Ramsey]

Okay, good. And you're at the right stage of investing. Right. There's no debt. You have three to six months saved.

[Caller (Mac)]

That's correct. I've got about 25k emergency fund. I don't have any debt. I. It's so funny. I called the show about four years ago when I did have debt, and no, I'm totally debt free.

[Dave Ramsey]

I love it. So good. Okay, so you got 25,000 emergency fund. How much did you set? You said there's extra sitting in your checking. That's just above and beyond you need to invest. How much is that?

[Caller (Mac)]

Yes, it's currently $110,000. And though it feels good, I know that probably shouldn't be sitting in cash. And so that was really the genesis for my call. And then on top of that, I'm able to save $2500 a month. And I. I don't continue doing that, if that's correct. Yeah.

[Dave Ramsey]

So what's your. Before I tell you about the investing, I want to get a snapshot of your life. Tell me about your living situation. Are you renting? Do you own a House?

[Caller (Mac)]

Yes. I'm currently renting and though I would like to follow the baby steps and buy a house, I'm not in a position to do so right now. I am financially in a position to do so. But the way my life currently is, I don't know where I want to live long term. I don't know where my next job is going to be within the company I'm in. I'm open to relocating to advance my career. So I really don't. I'm not in a position to buy a house right now.

[Dave Ramsey]

What's the timeframe on all that? Is it in the next two to three years?

[Caller (Mac)]

Probably, yeah.

[Dave Ramsey]

Okay. Well, I will say so I'm gonna pair your living situation with your investing question. I will say you've got the 110,000. I think that's a great start for a down payment. But you know, like I know wherever you end up in the United States, real estate wise, it's going to cost you a pretty penny of a down payment to even get into the world. I'm looking over here at our, you know, on our Ramsey trusted site where you can see the housing market trends and I'm just seeing that the national median median price for a home is 424,000. Right. So even with something like that, if you want to get that to 25% of your take home, you're likely putting down around 60%. Right. Like you're putting down a lot if you, even if you make 100,000 a year. So that's a lot of money. So part of me says what I would do if I were in your shoes is I would keep investing the 15%. But as far as this 2500 in margin goes, and as far as 110, I might keep it in a high yield savings account and just keep plugging away. And until I know that when the time comes and I'm going to buy a house that's likely $400,000 that I can easily plop down a big enough down payment that that thing is not too big of a piece of my world. Does that make sense?

[Caller (Mac)]

It does make sense and that's what I'm currently doing. Like all the cash I have is in a high yield savings account. However, I think, is that the one.

[Dave Ramsey]

Ten times or you have something above that?

[Caller (Mac)]

Okay, that's the 110. About your previous question on timeline, I thought you meant like, like when do you think I would relocate? And that would be in two to three years. In terms of when I think I'm going to buy a house. I really don't know. That's. That's something I just haven't decided yet.

[Dave Ramsey]

Well, I still like the idea of when the time comes you having like $250,000 or $200,000, I don't know, but it sounds like the type of work you do might cause you to be in an area that has higher real estate prices. Am I wrong?

[Caller (Mac)]

That's correct.

[Dave Ramsey]

Okay. So for that reason, that's why I'm saying I like that plan. Because you're getting the boat. The best of both worlds. What's your income, by the way, right now?

[Caller (Mac)]

About 170 to 180 grand a year.

[Dave Ramsey]

Yeah, exactly. So you have a really great income. That would be my plan. Now let's say you stack that up to 250,000. You're like, Jade, I really feel good with this. I'm going to keep that in a high yield. I'm still not ready to buy then. Yeah, I would look over and I'd probably, in your case, it'd be easy for you to max out on a Roth IRA every year. You know, you throw 7,000 in there and let that grow. Now, as far as what to invest in. Cause I think I heard you ask that question.

[Caller (Mac)]

Correct.

[Dave Ramsey]

Yeah. Four types of mutual funds. And by the way, hopefully your 401k is spread out like this too. But four different types of mutual funds is what I would suggest. We're looking for growth funds. We're looking for growth and income. We, we're looking for aggressive growth and we're looking for international. You might hear that stated as, you know, mega cap, large cap, small cap, and, you know, mixed markets or emerging markets. So that's kind of how we do it. It's just an, it's just a way to make sure that you're very diverse. Everything's spread around. Some of them are higher risk profile than others, and it all balances each other out. And that's the way my money is invested and that's the way John's money is invested. So that's how I do it.

[Chris Hogan]

But you also asked a question at the beginning, and your question was, I want to make sure I don't lose this money.

[Caller (Mac)]

Yeah.

[Chris Hogan]

Part of investment is a risk, of course.

[Caller (Mac)]

Yeah.

[Chris Hogan]

So you could put all of that in there and the Q4 Nvidia number comes in lower. And since the stock market's been propped up by 10 stocks the last year or maybe even longer, like it could be volatile. Right. And so you. That might go down and the day it goes down, I'm still going to make my same contribution because I'm playing a long game with it.

[Dave Ramsey]

Right?

[Caller (Mac)]

That's correct. And I'm definitely going to continue to do my 401k. I just, that's something I don't think about. It's definitely a long term thing. Every check, you know, but in terms of, I like to think my current cash is where I'm concerned.

[Chris Hogan]

Yeah, I, I, I, I guess I want to double click on what Jade was saying. Part of investing or let me ask you this, what are you going to do with a big pile of money?

[Caller (Mac)]

I don't know. That's why I was calling.

[Chris Hogan]

I'm just saying like in 10 years or in 15 years you're going to buy a place to live.

[Caller (Mac)]

That's correct. Yeah.

[Chris Hogan]

Right. And so I just want to double click on what Jade said. I think it's so right. If you have a quarter million dollars in a high yield savings account, number one, some bros somewhere are going to come after you. Who cares? Because here's what you'll have that they don't. $250,000 to do whatever you want, whenever you want.

[Caller (Mac)]

Yeah.

[Chris Hogan]

And if you want to go put 25% down on a million dollar house, you can just write a check. You know who else can do in this country? Not very many people. And if you want to pay, put 50% down on a $500,000 house. Great. Like you'll be able to just chip away at it and chip away at it. I love the idea of you having cash for like, like real estate as part of your investment portfolio over time. You know what I'm saying?

[Caller (Mac)]

Yes, I understand. Yeah, that makes a lot of sense.

[Chris Hogan]

What I don't want you to do, you're going to get itchy is to get into like speculative stuff and crypto and oh, maybe if I like that's where I think you're going to get yourself in trouble.

[Caller (Mac)]

Yeah. And that's definitely something I don't plan on participating in. I think it's like I even have an initial fear of investing in the stock market with funds and I know I probably should be on top of my 401k.

[Dave Ramsey]

Just remember it's the same, it's the same. That's in your 401k. So if you're looking, if you log in and, and check out your 401k and you feel good about it, you feel good about the growth, you feel good about what you've seen, that it's the same. It's the same stocks. And if you're still unsure, you can check out a SmartVestor Pro to help you learn a little bit more. And we'll make sure you get that information.