How Do I Start Investing From Scratch?

Summary

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Podcast Summary: How Do I Start Investing From Scratch?

Podcast: Ramsey Everyday Millionaires
Date: July 27, 2026
Hosts: Dave Ramsey, Ramsey Network Team

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Episode Overview

This episode of Ramsey Everyday Millionaires focuses on the essential steps for starting to invest when you have minimal experience. The hosts, led by Dave Ramsey, respond to a listener's question about managing newfound savings and the best kind of investments for beginners. The discussion centers on practical wealth-building principles, the importance of foundational financial steps, and dispelling the myth of “get rich quick” schemes.

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Key Discussion Points & Insights

1. Listener Question: Investing With No Experience

• [00:38–02:05]
  Shane from Philadelphia asks for guidance after recently increasing his income in sales and accumulating significant savings, unsure about how to start investing beyond his company's 401k.

2. Three Principles of Wise Investing

• [02:19–05:02]
  Dave outlines the foundational rules everyone should follow when starting to invest:
  • Don’t invest in things you don’t understand:

    "Don't ever put money in something you don't understand, okay? You have not violated that. Congratulations, You've done very well." (Dave Ramsey, 02:19)

  • Go slow, avoid 'get rich quick' schemes:

    "The fastest way to get rich quick is don't get rich quick. The tortoise wins the race over the hare every time." (Dave Ramsey, 03:09)

  • Find financial pros who teach clearly:

    "If they can't speak to you in such a way that they can teach you, they don't have the heart of a teacher." (Dave Ramsey, 04:04)
    If an advisor leaves you confused or your spouse gets a "bad feeling," move on.

3. The "Baby Steps" Wealth-Building Plan

• [05:05–06:13]
  Dave reiterates the Ramsey philosophy:
  • Pay off all debts except your home before investing.
  • Build a robust emergency fund (three to six months of expenses) to ensure investments stay untouched.

    "Being out of debt and having the rainy day fund is foundational to keep your investments safe." (Dave Ramsey, 05:35)

4. Practical Savings Advice

• [06:13–06:30]
  Jade Warshaw advises:
  • Use a high-yield savings account for your emergency fund to earn better interest (3–4% vs. less than 1%).

5. Starting to Invest—The Ramsey Approach

• [06:30–09:06]
  • Once debt-free (except mortgage) and with an emergency fund:
    • Start with 15% of household income into 401(k)s, Roth IRAs, or Roth 401(k)s.
    • Use mutual funds and index funds—avoid flashy or high-risk options like crypto, day trading, or speculative real estate.

    "Honestly, the 15% into retirement, 401ks, Roth IRAs, you know, the standard. And anything beyond that is just mutual funds. I mean, index funds, like it's, it's nothing. There's no day trading, no crypto." (Jade Warshaw, 08:17)

    • The process is consistent and proven by thousands of "baby steps millionaires."

    "The difference is it actually works." (Dave Ramsey, 09:05)

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Notable Quotes & Memorable Moments

• On learning before investing:

  "I don't care how flashy the TikTok thing is or what Dave Ramsey says or what Rachel Cruz says, you understand it before you put money in."
  (Dave Ramsey, 03:00)

• On avoiding complicated financial advisors:

  "If you leave more confused than when you went in. Don't go with them, okay? They might be okay, but they're not okay for you."
  (Dave Ramsey, 04:22)

• On the patience required for investing:

  "In investing you always win if you're slow and steady...the most stable way to build wealth versus all the flashiness."
  (Jade Warshaw, 08:28)

• On the Ramsey approach to investment pros:

  "They don't get the Ramsey name put on them on our website unless they have the heart of a teacher. We won't put our name beside somebody."
  (Dave Ramsey, 06:48)

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Timestamps for Important Segments

• [00:34–02:05] — Shane describes his situation and asks for help
• [02:19–05:02] — Dave's three core investing principles
• [05:05–06:13] — Explanation of the Ramsey "Baby Steps"
• [06:13–06:30] — Jade recommends high-yield savings accounts
• [06:30–09:06] — Discussion on starting to invest and the importance of simplicity and consistency

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Tone & Takeaways

The conversation is practical, supportive, and motivational, centered around avoiding confusion, staying patient, and committing to proven steps. The episode dispels the myth that investing must be complicated or high-risk and highlights the slow, steady path to financial freedom embraced by everyday millionaires.

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For Beginners:

• Focus on debt elimination and emergency savings before investing.
• Use straightforward investing vehicles (mutual funds, index funds) after building your financial foundation.
• Stick with what you understand and partner only with financial professionals who teach clearly.

Bottom Line:
Investing doesn’t have to be complicated—follow a slow, steady plan and seek to truly understand your choices to become an everyday millionaire.

Transcript

[A]

If you want to be an everyday millionaire, you got to learn to invest like one. And at Investing Essentials, Dave and I are handing you his complete playbook fund selection, 401ks and wealth planning strategies he's never shared publicly. And it's virtual, so you can join from anywhere. Click the link in the show notes to get your tickets. This episode is brought to you by SmartVestor. Connect with an investing pro near you

[B]

at RamseySolutions.com SmartVestor Shane's in Philadelphia. Hi, Shane. How are you?

[C]

Good. How are you, Dave?

[B]

Better than I deserve. What's up?

[C]

So I've changed positions in the company that I've been working for for the last couple of years, and I'm making a significant amount of money over what I was making initially. And it's kind of just piling up in the bank. I haven't invested any of it aside from just the company 401k, which comes out automatically. And I'm pretty illiterate when it comes to these things. So I've been back and forth reading different things online about what I should be doing with my money. Never really done anything with it thus far because I haven't had any professional advice, just what I've read online. So I'm hoping that you can maybe guide me in a direction of where I should be putting my money to work for me, as opposed to earning less than 1% interest in a bank.

[B]

Good for you. Good for you. Well, the good news is it's not rocket science. It's not that hard. This is not like learning a foreign language. It's much easier. Okay. And so it is a bit of a foreign language, but you just have to learn the vernacular and then you'll know what to do. What do you do for a living?

[C]

So I'm in sales.

[D]

Good.

[B]

What do you make?

[C]

By myself or my wife?

[B]

Your household income. Why is this money piling up?

[C]

Probably just north of 200k gross between my wife and I.

[B]

Good for you. Well done, sir.

[D]

How much money do you have saved, Shane? You said it's just sitting in the bank and piling up.

[C]

Yeah. So right now I have about 50,000 in the bank. I've only been in sales for the last 6 months and I probably had 10,000 when I started, so I probably have saved 40k in the last month.

[D]

That's amazing.

[B]

Good for you. Okay. Well, as far as investing goes, there's two principles that if you'll follow these two principles, you'll find your way through and do just fine. Okay. Actually, there's three, but I'll give you two. I'll give you all three of them. Principle number one, don't ever put money in something you don't understand, okay? You have not violated that. Congratulations, You've done very well. I met with an NFL player one time and I sat down with him and his wife and he said, dave, you're going to kill me. And I'm like, what'd you do? Did you blow all your money? And he said, no, I got $10 million. I'm like, what is it? Why am I going to kill you? You got $10 million? He said, it's all in CDs. It's horrible. And I went, that's not horrible. That's so much smarter than all the other people you play football with because they've all blown theirs or put it in their brother in law's pizza company that went broke, you know, so, you know, very smart. Don't put money and stuff until you understand it. So I don't care how flashy the TikTok thing is or what Dave Ramsey says or what Rachel Cruz says, you understand it before you put money in. Principle number one. Principle number two, plan to go slow. The fastest way to get rich quick is don't get rich quick. The tortoise wins the race over the hare every time. I read the book, okay? And I've read it a bunch over and over. He always wins. And investing you always win if you're slow and steady wins the race. That's the Aesop's fable, okay? And then the third thing is, don't get financial people in your life of any kind. Real estate, insurance, investing, tax, tax, whatever. That sound like Charlie Brown's teacher. Wah, wah, wah, wah, wah, wah, wah, wah. I have no idea what you're saying. You might as well speak in German to me, okay? And if they can't speak to you in such a way that they can teach you, they don't have the heart of a teacher, then they're just a salesman. They're not a financial person. And financial people are the world's worst. Because a lot of us are nerds and we like being impressive with our nerd knowledge more than we are concerned that you learn. And that goes back to the first one. Don't put money in stuff you don't understand. So if you sit down with a financial advisor and you and your wife, and your wife says, I got a bad feeling about him or her, don't go with them. Or if you sit down with them and you leave more confused than when you went in. Don't go with them, okay? They might be okay, but they're not okay for you. Now that we've established that, we can start talking about some of the cool stuff you could do for investing. Now we teach a process for building wealth that we've taught for 30 years plus called the baby steps. You probably heard of that, right?

[C]

I do. I have. I actually have your total money makeover book.

[B]

Okay, so you know then that we're going to have you have an emergency fund and have all your debts paid off except your home before we start investing. Do you have any debt other than your home?

[C]

Yes, just my car or my truck and my wife's car.

[B]

And how much is all that total?

[C]

Probably 70,000.

[B]

Okay, we're going to pay all that off before we do any investing then.

[C]

Okay.

[B]

That's what we call baby step two, if you remember the book. And then once that's done, I want you to set aside three to six months of expenses in for an emergency fund. Being out of debt and having the rainy day fund is foundational to keep your investments safe. Your investments otherwise will turn. You'll pull money. I stop your 401k temporarily and knock those car debts out. Take all that 40k and throw it at the smallest car debt. Let's get it all cleaned up. So if you got no payments but a house payment and you got, I don't know, in your case, 30,000 bucks sitting there in a money market account only to be touched for emergencies, it's not a I want to go on a trip fund.

[D]

Yeah, that's one change. I was going to say open up a high yield savings account. Fairwinds Credit Union's amazing, but they have a great smart bundle. So put it not in a traditional savings account, but in a high yield savings account. Because it goes from negative, I mean basically not even 1% to at least you're getting 3 to 4% sitting there for your emergency fund.

[B]

For your emergency fund. Right. And then with no payments now, you start really stacking money. You start putting 15% away in your 401k and Roth IRAs and Roth 401ks. And you can talk to one of the smartvestor [e-mail] and they can help you. They will have the heart of a teacher. They don't get the Ramsey name put on them on our website unless they have the heart of a teacher. We won't put our name beside somebody. And if we find out some of them Doing the Charlie Brown's teacher thing. We fire them and get them out of the system because we are hardcore about this. So if you do all of that, you're going to have so much stinking money. Because I got to tell you, one of the highest paid professions in the United States today is a good salesman.

[C]

Yeah, it was pretty night and day. It's about three times what I was making with this same current company prior to this position. And it's just had a lot of nights where I didn't really know what we were going to do for certain things. Read through your book. Laid off some debts, credit cards, medical bills.

[B]

Good. Well, you're only way.

[C]

Now it's. And now we're just at a point where I have too much money. I don't know what to do with it based off of, you know, my own. My own ignorance. With. Yeah, With. With finances.

[B]

With investing. With investing. You start investing in good mutual funds and they're real easy to understand. It's 90 to 200 stocks. You look at the track record of the fund that was mutually funded by you, me and a bunch of other people together, and you go, okay, that group of that pile of money has been growing at an average rate of 11% or 10% or 22% or whatever it is. And you look at, oh, it's done that for 32 years. Oh, okay. I feel pretty good about that. That's like buying a house in a good neighborhood.

[D]

Yeah. And Shane, when you get to that 15%, honestly, the investment advice as you. If you dig into more of what we talk about, it's not going to be a lot of flashy stuff. I mean, honestly, the 15% into retirement, 401ks, Roth IRAs, you know, the standard. And anything beyond that is just mutual funds. I mean, index funds, like it's, it's nothing. There's no day trading, no crypto. Like there's nothing big and flashy real estate, Airbnb, you know, Airbnb investing. Like there's. You'll find none of that because again, it's. It's quote unquote, not exciting investing advice. But the amount of baby steps. Millionaires that are at it have done this and have built wealth slowly over time because it is the most stable way to build wealth versus all the flashiness. So again, it's not super exciting, but it is consistent.

[B]

The difference is it actually works.

[D]

It works. Yep.