How Do We Maximize the Returns on Our Investments?

Summary

Summary of "How Do We Maximize the Returns on Our Investments?"

Ramsey Everyday Millionaires
Host/Authors: Ramsey Network (Dave Ramsey, Ken Coleman, Rachel Cruze, George Kamel, Jade Warshaw, Dr. John Delony)
Release Date: July 16, 2025

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In the episode titled "How Do We Maximize the Returns on Our Investments?" from the Ramsey Everyday Millionaires podcast, hosts from the Ramsey Network delve into the intricacies of investment strategies, highlighting common pitfalls and offering actionable advice to listeners aiming to enhance their financial portfolios. The discussion primarily revolves around a caller's concerns about underperforming investments and explores broader themes of investment education, portfolio diversification, and the importance of understanding financial products.

Caller’s Investment Concerns

The episode begins with a caller reaching out to the hosts with pressing concerns about their investment returns. The caller, a 67-year-old individual whose husband is 70 and retired, shares their financial situation:

• Net Income: $6,800 per month
• Debt Status: No debt, no mortgage, no car payments
• Investment Accounts:
  • TSP Account: Former mailman’s government 401k
  • Ameriprise Account: $85,000

The caller expresses dissatisfaction with the performance of their Ameriprise account, stating:

Caller [00:44]: "Over the last two years, we made $10,000. However, we put $8,000 into it. So bottom line, we made $2,000 on $85,000. I'm not a financial person, but, like, that just doesn't sound like a lot to me."
(Timestamp: 00:44)

Rachel Cruze responds by highlighting the low return on investment:

Rachel Cruze [01:29]: "That's terrible. You could have made that sitting in a savings account."
(Timestamp: 01:29)

Analyzing Investment Returns

Rachel Cruze breaks down the caller’s investment performance, pointing out the minimal return rate:

Rachel Cruze [01:31]: "2% return."
(Timestamp: 01:31)

She emphasizes that such a return is underwhelming, especially when compared to potential gains from higher-yielding savings accounts:

Rachel Cruze [01:46]: "Any high yield savings account is upwards of, you know, you're 3 to 4% right now. The days of 5% are long gone as the rates have gone down, but still the idea remains in that a high yield savings account, which is liquid secure compared to an investment account, you want to be making more in your investments for the risk you're taking on."
(Timestamp: 01:46)

Identifying the Root Cause

Rachel delves deeper into the possible reasons behind the poor investment returns, suggesting that the caller may lack clarity on their investment allocations:

Rachel Cruze [02:31]: "Well, it sounds like you don't know what you're invested in. And that's the number one rule of investing, is understand what you're putting your money into. And it sounds like your financial planner did not educate you."
(Timestamp: 02:31)

She hypothesizes that the low returns might be due to an over-concentration in bonds, which typically offer lower yields compared to the stock market:

Rachel Cruze [03:14]: "My guess is that you are heavily in bonds which is why you're seeing a big drag on your returns compared to actually being in the stock market."
(Timestamp: 03:14)

Advice and Recommendations

Rachel Cruze offers a comprehensive action plan for the caller to address their investment woes:

1. Seek a Second Opinion:

   Rachel Cruze [03:25]: "I would get a second opinion from a SmartVestor Pro. So I would jump on a Ramsey Solutions dot com, click on Trusted Experts, click the SmartVestor button and have them dig into your investments and actually look at your portfolio."
   (Timestamp: 03:25)

2. Educate Yourself:

   Rachel Cruze [04:30]: "You've got to do your homework and you need to start learning because you've said, well I don't know anything about this. You're going to need to start learning about it if you want to grow it and manage it well."
   (Timestamp: 04:30)

3. Understand Investment Products and Fees:
   Rachel emphasizes the importance of knowing where your money is invested, the types of financial products used, and the fees associated with them. Lack of transparency from financial planners can lead to suboptimal investment choices.

George Kamel reinforces Rachel’s advice, underscoring the necessity of understanding one’s investments to make informed decisions:

George Kamel [04:43]: "It's so important to sit with a pro and be able to understand everything they're saying to you so you can call the shots and they're executing those shots. Very good point there."
(Timestamp: 04:43)

Conclusion and Final Thoughts

The episode wraps up with Dave Ramsey reiterating the availability of professional assistance for listeners facing similar investment challenges:

Dave Ramsey [04:43]: "Thanks for tuning in to Ramsey. Everyday millionaires need help with your investments? Connect with a SmartVestor [e-mail] SmartVestor or click the link in the show notes. Ramsey Solutions is a paid non-client promoter of participating pros. Learn [e-mail] SmartVestor."
(Timestamp: 04:43)

Key Takeaways:

1. Understand Your Investments:
   Knowing where your money is invested and the nature of those investments is crucial for maximizing returns.

2. Seek Professional Guidance:
   If unsure about your investment strategy, consult with qualified professionals who can provide personalized advice.

3. Diversify Your Portfolio:
   Over-reliance on low-yield investments like bonds can hinder growth; a balanced portfolio often includes a mix of asset classes to optimize returns.

4. Continuous Education:
   Financial literacy empowers individuals to make informed decisions and take control of their financial futures.

5. Evaluate Financial Advisors:
   Ensure your financial planner aligns with your investment goals and provides transparent, understandable advice.

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This episode serves as a valuable resource for listeners seeking to enhance their investment strategies. By addressing real-life concerns and providing practical solutions, Ramsey Everyday Millionaires equips its audience with the knowledge and tools necessary to achieve financial prosperity.

Transcript

[Dave Ramsey]

This episode is brought to you by SmartVestor. Connect with an investing pro near you at RamseySolutions.com SmartVestor Carol is joining us.

[George Kamel]

Now in the city of brotherly love. That's Philadelphia. George.

[Rachel Cruze]

Oh, thank you, Carol.

[George Kamel]

How can we help?

[Caller]

Thanks for taking my call.

[George Kamel]

Sure.

[Caller]

So I have an investment question. Background is I'm 67. My husband's 70. I'm working, he's retired. We have a net income of $6,800 with no debt, no mortgage, no car payment.

[Rachel Cruze]

Awesome.

[Caller]

Yeah. And with those numbers, to be honest, we're living our best life. We honestly are. So we have a TSP account that's. My husband was a mailman, and that's like a government 401k. Then we have another one. It's with ameriprise. It's for $85,000. Over the last 10. Over the last two years, we made $10,000. However, we put 8,000 into it. So bottom line, we made $2,000 on 85,000. I'm not a financial person, but, like, that just doesn't sound like a lot to me.

[Rachel Cruze]

Yeah. 2% return.

[Caller]

85,000.

[Rachel Cruze]

I'm sorry, you're saying that you met. You made a 2% return on your money in a year?

[Caller]

Two years.

[Rachel Cruze]

Two years.

[Caller]

We made $2,000? Yeah.

[Rachel Cruze]

That's terrible. You could have made that sitting in a savings account.

[Caller]

You know what? That's what I was thinking.

[Rachel Cruze]

Well, you thought correctly.

[Caller]

I don't know if you guys like Capital One, but they're not a fan. Like 5%.

[Rachel Cruze]

Yeah. I mean, any high yield savings account is upwards of, you know, you're 3 to 4% right now.

[Caller]

Yeah.

[Rachel Cruze]

The days of 5% are long gone as the rates have gone down, but still the idea remains in that a high yield savings account, which is liquid secure compared to an investment account, you want to be making more in your investments for the risk you're taking on.

[Caller]

Right.

[Rachel Cruze]

You're saying this is in the Ameriprise account. You got this terrible return.

[Caller]

No, we're just investing and we have a financial planner. And the thing is, we're putting $500 extra a month away, and it just seems like it's just kind of not going anywhere.

[Rachel Cruze]

Well, it sounds like you don't know what you're invested in. And that's the number one rule of investing, is understand what you're putting your money into. And it sounds like your financial planner did not educate you.

[Caller]

Right. And. And I am not good with investments. I kind of don't understand it. So I don't know if I should just go with another financial planner.

[Rachel Cruze]

Yeah, I don't know what they have you in. I can't tell you why you got that return. My guess is that you are heavily in bonds which is why you're seeing a big drag on your returns compared to actually being in the stock market. And so I can't tell you what you're invested in, what kind of product it is, what fees you're paying. Where did you find this financial planner?

[Caller]

A friend of mine who I feel is like kind of responsible with money and smart with money. And so I kind of assumed that, which is my bad.

[Rachel Cruze]

And I don't know if this financial planner is good or bad. I don't know what they put you into and if it's just they put you in very, you know, non risky investments because of your ages. I don't know. But I would get a second opinion from a SmartVestor Pro. So I would jump on a Ramsey Solutions dot com, click on Trusted Experts, click the SmartVestor button and have them dig into your investments and actually look at your portfolio. And because I this happened with a family member of mine, they said you guys always talk about 10 to 12% returns. I've gotten 2% over the last 10 years. And I went and looked at the portfolio, it was like 58 different bonds. And I'm going, well yeah, you're not even really investing here. And so that is my guess as to what's happening in your portfolio. But on a radio call I'm not going to be able to dig into that. But I would say you've got to do your homework and you need to start learning because you've said, well I don't know anything about this. You're going to need to start learning about it if you want to grow it and manage it well. So they're going to help you out with that. I would jump on ramseysolutions.com click on the SmartVestor button, Carol, and hopefully they can solve it. Luckily you're in a good place financially but we can definitely do better.

[George Kamel]

Yeah, great advice there. It's so important to sit with a pro and be able to understand everything they're saying to you so you can call the shots and they're executing those shots. Very good point there.

[Dave Ramsey]

Thanks for tuning in to Ramsey. Everyday millionaires need help with your investments? Connect with a SmartVestor [e-mail] SmartVestor or click the link in the show notes. Ramsey Solutions is a paid non client promoter of participating pros. Learn [e-mail] SmartVestor.