My Investments Keep Losing Money

Summary

Ramsey Everyday Millionaires: "My Investments Keep Losing Money" – Episode Summary

Release Date: April 25, 2025

Introduction

In the episode titled "My Investments Keep Losing Money," the Ramsey Network explores the challenges faced by everyday individuals in managing their investments. Hosted by the Ramsey Network team, including Dave Ramsey, Ken Coleman, Rachel Cruze, George Kamel, Jade Warshaw, and Dr. John Delony, this episode delves into the common pitfalls of novice investors and offers actionable strategies to achieve financial success.

Caller’s Dilemma

The episode centers around a call from Mrs. Parker, who, along with her husband, has been investing in the stock market since September 2021. Their investments have consistently declined, leaving them with no returns and failing to cover the associated fees.

• Mrs. Parker’s Concern (00:20-00:55):

  "My wife and I have been investing in the stock market since the fall of 2021. September, to be exact. And since the investment, we have done nothing but go south to the point where we've had no returns. We're not even recouping fees."
  – Mrs. Parker

Expert Analysis and Advice

Parker, the investing pro from SmartVestor, responds by highlighting the fundamental mistake the Parkers have made: investing in assets they do not understand.

• Understanding Investments (00:56-02:09):

  "Rule number one of investing is don't put money in things you don't understand. This is how you end up not making any money. Right? And so... the investments need to be moved to an investment broker that has the heart of a teacher, not the heart of a salesman."
  – Parker

Parker emphasizes the importance of comprehending where one’s money is invested and choosing a broker who prioritizes education over salesmanship. He underscores that relying on others without understanding the investment can lead to losses.

Assessing Investment Performance

Dave Ramsey interjects to provide context on the stock market's performance during the Parkers' investment period.

• Stock Market Performance (02:09-02:34):

  "I just checked, Dave. From the fall of 21 to now, the stock market's up 28%. The S&P 500."
  – Dave Ramsey

This statement raises concerns about why the Parkers' investments are underperforming compared to the overall market, suggesting possible mismanagement or excessive fees.

Identifying the Problem

Parker further dissects the issue, questioning the specifics of the Parkers' investments and pointing out inconsistencies with market averages.

• Performance Discrepancy (02:35-04:15):

  "Because you don't. But you getting knowledge about this is what fixes it... the stock market is up 20%, my stuff is down 10%. What? Yeah, there you have it. I don't want to wait for, I don't want to wait four years to have that... It needs to be keeping up with at least what the market is doing, and that'll keep you outpacing fees."
  – Parker

Parker indicates that despite the S&P 500's significant gains, the Parkers' investments are not aligned, possibly due to high fees or poor investment choices. He advocates for regular assessments and ensuring that investments at least match market performance to avoid erosion from fees.

Staying in Control and Educated

Dave Ramsey reinforces the necessity of maintaining control over investment decisions and staying informed.

• Control and Education (04:15-04:48):

  "So the key is stay in control. You stay in control of the decisions, stay knowledgeable. And you don't just go, here's a bunch of money, do what you want with it. You decide, after they teach you again."
  – Dave Ramsey

Ramsey emphasizes that investors must take an active role in understanding and managing their investments rather than delegating entirely to financial advisors.

Caution Against High Fees and Complex Products

Parker warns against engaging with financial advisors who push products that are not transparent or understandable, highlighting the dangers of excessive fees and complicated investment vehicles.

• Avoiding Financial Pitfalls (04:48-05:13):

  "Never do business with financial people of any kind... The only thing you want is to learn from them and then you will buy. You don't have to be sold."
  – Parker

He speculates that the Parkers may have been misled into high-fee investments, such as whole life insurance policies masquerading as investment vehicles, which could explain their lackluster returns.

Key Takeaways

1. Understand Your Investments: Before committing money, ensure you fully comprehend the investment vehicle to avoid unexpected losses.
2. Choose the Right Advisor: Seek out financial advisors who prioritize education and transparency over sales, helping you make informed decisions.
3. Monitor Performance Regularly: Compare your investment performance against market benchmarks like the S&P 500 to ensure you are not underperforming.
4. Be Wary of High Fees: Excessive fees can erode investment returns. Always inquire about and evaluate the fee structure of any investment.
5. Maintain Control: Stay engaged with your investment choices to ensure they align with your financial goals and risk tolerance.

Notable Quotes

• Parker (00:56):

  "Rule number one of investing is don't put money in things you don't understand."

• Dave Ramsey (04:15):

  "So the key is stay in control. You stay in control of the decisions, stay knowledgeable."

• Parker (04:48):

  "Never do business with financial people of any kind... You don't have to be sold."

Conclusion

The "My Investments Keep Losing Money" episode serves as a crucial guide for novice investors navigating the complexities of the stock market. By emphasizing the importance of understanding investments, choosing the right financial partners, and maintaining active control over one's financial decisions, the Ramsey Network provides listeners with the tools needed to build and sustain wealth effectively. This episode underscores that with the right knowledge and strategies, ordinary individuals can overcome investment challenges and achieve extraordinary financial success.

Further Assistance

For listeners seeking personalized guidance, Ramsey Network recommends connecting with a SmartVestor professional. Visit RamseySolutions.com SmartVestor or click the link in the show notes to find an investing pro near you.

Transcript

[Dave Ramsey]

This episode is brought to you by SmartVestor. Connect with an investing pro near you at RamseySolutions.com SmartVestor Parker's in Houston.

[Parker]

Hey, Parker. How are you?

[Mrs. Parker]

Oh, I'm doing fine. Thank you, Dave, for taking the call.

[Parker]

Sure.

[Mrs. Parker]

What's up? I've got a question. My wife and I have been investing in the stock market since the fall of 2021. September, to be exact. And since the investment, we have done nothing but go south to the point where we've had no returns. We're not even recouping fees.

[Parker]

So what in the world are you investing in?

[Mrs. Parker]

Well, that's. I'm not sure. And that's the reason for the phone call. I don't. We don't even know where to begin. We're new to the investment system. We don't. We're. We're clueless.

[Parker]

Okay, okay, let me stop you a minute. Rule number one of investing is don't put money in things you don't understand.

[Mrs. Parker]

Okay? Okay, sir.

[Parker]

This is how you end up not making any money. Right? And so. And you have a lot of fear that goes with it when you put money in things you don't understand because you're dependent on someone else to make all the decisions. And that's bad. It's how you lose money. So I think the investments need to be moved to an investment broker that has the heart of a teacher, not the heart of a salesman. Meaning that when they sit down with you, they're going to say, all Right, Parker and Mrs. Parker. Right. This is what you have. This is what. Here's how this works, and here's how the other things work. Which ones do you want to do? Once you understand them, you can give direction on where you want your money to be put. And that's when you'll keep from losing your tail end. Because, honestly, in the period last year, the stock market in the S and p was up 25%. The year before, it was up 21%. Those are two unusually good years in the stock market.

[Dave Ramsey]

I just checked, Dave. From the fall of 21 to now, the stock market's up 28%. The S&P 500. So when you say stock market, Parker, are you talking about the overall stock market?

[Parker]

No, he's not. He doesn't know.

[Dave Ramsey]

You're not even sure what you're invested in?

[Mrs. Parker]

No, no, no. Okay, we're in. Okay. I'm with a firm that we did the risk assessments and all that, and so I'm guessing. I don't know for sure. I'm guessing I'm an S and P and in the Dow.

[Parker]

No, you're not.

[Mrs. Parker]

Oh, okay, okay.

[Parker]

Because you would have made 30% on your money.

[Mrs. Parker]

Okay, sir. Okay.

[Parker]

If you were in that, that's what George was just telling you.

[Mrs. Parker]

Okay. Okay.

[Parker]

Yes. And the S And P made 30% during that period of time. And in the last two years, it's made 21 and 25 consecutively. But it was down in one of the other years, which brings that average down to where it ought to be, which is, you know, over a four year period of time, you ought to be making 10, 12%, something like that, on your money, which should be well in excess of fees, unless their fees are excessive. So I don't know what's going on here, but. Because you don't. But you getting knowledge about this is what fixes it. So in my case, I don't have to, you know, or someone going to one of the smartvestor pros that we recommend on our website, they sit down with someone. What we would teach you to do is to say, all right, if I look at a simple website and I say the S and p is up 20%, my stuff is down 10%. What? Yeah, there you have it. I don't want to wait for, I don't want to wait four years to have that. What? I want to have that. I want to have that what? Question at least once every four or five months. It needs to be keeping up with at least what the market is doing, and that'll keep you outpacing fees. So I don't know what you've chosen or accidentally chosen, but it's done poorly, obviously, and it's not even as good as the S and P. And S and P is kind of the baseline. You need to at least do that. Good. Because you can do that good closing your eyes and pointing at S and.

[Dave Ramsey]

P. So the key is stay in control. You stay in control of the decisions, stay knowledgeable. And you don't just go, here's a bunch of money, do what you want with it. You decide, after they teach you again.

[Parker]

Never do business with financial people of any kind. That whether it's estate planning, insurance people, real estate people, investment brokers helping you with your investments that are trying to sell you something and you don't understand. The only thing you want is to learn from them and then you will buy. You don't have to be sold.

[Dave Ramsey]

I'm scared. There's a whole life policy in here. They're investing through quote unquote and that's why he's not making any money.

[Parker]

I got a feeling we did a risk assessment with an insurance guy. Yeah, there's a possibility you're neck deep with some insurance company.

[Dave Ramsey]

And that's where you're saying we're not making our fees back. Which tells me he's sinking a lot of money into this.

[Parker]

A lot of fees.

[Dave Ramsey]

Yep.

[Parker]

Yeah, that does. That does sound suspicious. You're right.

[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.