Where Should We Invest If We’re Scared of the Stock Market?

Summary

Podcast Summary: Ramsey Everyday Millionaires Episode: Where Should We Invest If We’re Scared of the Stock Market?
Release Date: July 14, 2025

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Introduction

In this episode of Ramsey Everyday Millionaires, hosts from the Ramsey Network—Dave Ramsey, Jade Warshaw, and guest Katie from Billings, Montana—delve into the concerns of individuals hesitant to invest in the stock market due to its perceived volatility. The episode provides insightful advice on navigating investment options for those wary of market fluctuations and seeking to grow their wealth securely.

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Caller Introduction and Financial Status

Katie, a 31-year-old public school teacher, reaches out with a solid financial foundation but uncertainty about her next investment steps.

• Financial Overview:

  • Debt-Free: "We're debt free, yes." (02:10)
  • Savings: Approximately $360,000 in the bank, including:
    • Certificates of Deposit (CDs): $232,000 at 4% interest.
    • Savings Account: $116,000.
    • Checking Account: $9,000 (intended to be moved to savings).
    • Health Savings Account (HSA): $1,200.
  • Income:
    • Katie: $55,000/year as a public school teacher.
    • Husband: Farmer and rancher with variable annual income.

• Current Investments:

  • Roth IRA: Recently established.
  • Term Life Insurance: Secured.

Katie shares her cautious approach, stating:
"It just seems like the stock market is kind of in a volatile state, and I'm nervous about what to do as to grow." (00:30)

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Concerns About Stock Market Volatility

Katie expresses apprehension about investing in the stock market, highlighting the uncertainty of returns and fear of market dips.

• Fear of Uncertainty:
  "You don't know for sure what the return is going to be on your investment... the stock market is scary." (03:08)

• Desire for Stability:
  She finds tangible investments like cattle more concrete compared to the intangible nature of stocks.

• Concern Over Financial Advisors:
  Katie is unsure about the necessity and cost of hiring a financial advisor, especially since she and her husband are debt-free.

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Hosts' Responses and Advice

Dave Ramsey and Jade Warshaw provide comprehensive guidance to address Katie's concerns and outline practical steps to diversify her investments.

Maximizing Tax-Advantaged Accounts

• Roth IRA:
  "Max out all of your tax-advantaged retirement accounts first... That's $7,000 each. That's $14,000 right there invested." (05:14)

• Roth 403B:
  Dave suggests maximizing contributions to employer-sponsored retirement accounts like the Roth 403B, which Katie likely has access to as a teacher.

Diversifying Investments

• Brokerage Accounts:
  Beyond retirement accounts, investing in taxable brokerage accounts provides liquidity without the penalties associated with retirement funds.

• Mutual Funds Over Single Stocks:
  "We don't recommend single stocks. We only recommend mut funds when it comes to investing in the market. And that just means a giant group of stocks." (08:40)

Understanding Risk and Long-Term Growth

• Market Trajectory:
  Dave reassures that despite short-term volatility, the stock market trends upward over the long term.
  "The trajectory of the stock market is very comforting to me. It's up and to the right." (06:32)

• Compounding Returns:
  Jade emphasizes the importance of patience and long-term investment for maximizing returns.
  "Set it and forget it. And you're going to look up in 20 or 30 years... that annualized rate of return thing really did pull through for me." (08:04)

Hiring a Financial Advisor

• Benefits:
  Dave clarifies the role of financial advisors, distinguishing them from financial coaches, and recommends them for wealth-building strategies.
  "A financial advisor is helping people build wealth. That is their A1 goal." (05:47)

• Ramsey Solutions Resource:
  He directs listeners to SmartVestor Pro via Ramsey Solutions for personalized financial guidance.

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Importance of Diversification and Long-Term Investing

The discussion underscores the necessity of not "putting all eggs in one basket" and the benefits of a diversified investment portfolio.

• Asset Allocation:
  "Here's when to invest, here's what to invest in... you don't want to put all of your eggs in one basket." (06:55)

• International Diversification:
  Investing internationally can hedge against domestic market downturns, as evidenced when the US market dipped and international markets rose.
  "We saw this recently, this year the US market took a huge dip in international climbed way up." (09:23)

• Millionaire Study Insights:
  Eight out of ten millionaires attribute their wealth to investing in retirement plans, particularly through employer-sponsored accounts.
  "Our millionaire study proved that out 8 out of 10 said hey, the key vehicle to me becoming a millionaire was just investing in my company retirement plan." (09:44)

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Recommendations for Financial Advisors and Resources

Dave Ramsey emphasizes the value of professional financial advice and provides resources to assist listeners in taking actionable steps.

• Book Recommendations:
  He offers to send Katie copies of:

  • "Baby Steps to Millionaires" – Provides a roadmap to wealth building.
  • "Breaking Free from Broke" – Contains chapters on patience in wealth accumulation and avoiding investment traps.
    "Here's when to invest, here's what to invest in... Here's how to become multimillionaires and build wealth." (06:55)

• Ramsey Solutions Resources:
  Listeners are encouraged to visit ramseysolutions.com for free investing guides and to connect with SmartVestor Pro for personalized investment advice.

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Conclusion and Key Takeaways

The episode wraps up with reinforcing the importance of overcoming fear to build wealth through informed and diversified investing strategies.

• Risk of Not Investing:
  "There is just as much risk in letting your money sit under the mattress at home as there is having it in the stock market, if not more." (07:56)

• Opportunity Cost:
  Keeping money idle leads to missed growth opportunities.
  "You're losing money in many ways because there's an opportunity cost there that people fail to consider." (08:04)

• Follow a Proven Plan:
  Emulating successful strategies, much like following a curriculum, leads to financial success.
  "As a teacher is spot on... I'll follow a proven plan." (09:54)

Listeners are encouraged to adopt a disciplined, long-term approach to investing, utilize available financial tools and resources, and seek professional advice to overcome fears and achieve financial growth.

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Notable Quotes:

• Katie:
  "It just seems like the stock market is kind of in a volatile state, and I'm nervous about what to do as to grow." (00:30)

• Dave Ramsey:
  "The trajectory of the stock market is very comforting to me. It's up and to the right." (06:32)

• Jade Warshaw:
  "Set it and forget it. And you're going to look up in 20 or 30 years... that annualized rate of return thing really did pull through for me." (08:04)

• Dave Ramsey:
  "A financial advisor is helping people build wealth. That is their A1 goal." (05:47)

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For further information and personalized investment assistance, visit ramseysolutions.com and explore their free investment guides or connect with a SmartVestor Pro today.

Transcript

[Dave Ramsey]

This episode is brought to you by SmartVestor. Connect with an investing pro near you at RamseySolutions.com SmartVestor Katie's up next in Billings, Montana. What's going on, Katie?

[Katie]

Oh, can you hear me?

[Jade]

Yes, sure can.

[Katie]

Yes. So I am 31 years old. I am not currently in debt, thank the Lord. I have just recently invested in a Roth ira. I have term life insurance. I max out my hsa, do all the things, and then my husband and I have about $360,000 sitting in the bank. So that is mostly. We do have CDs at 4%, and everything else isn't savings or checking. And I know nothing about investment opportunities. It just seems like the stock market is kind of in a volatile state, and I'm. I'm nervous about what to do as to grow. Does that make sense?

[Dave Ramsey]

It does. So you said you had money in CDs?

[Katie]

Yes.

[Dave Ramsey]

How much are we talking?

[Katie]

232,000.

[Jade]

Ooh.

[Dave Ramsey]

Is that on top of the 360 you have in the bank?

[Katie]

No, sir. Nope.

[Jade]

That's including.

[Katie]

Yeah. So those are CDs within our bank.

[Jade]

Got you, got you.

[Dave Ramsey]

Where's the other 130?

[Katie]

We have $116,000 in savings, 9000 in checking, and then about 1200 in HSA.

[Dave Ramsey]

Wow.

[Jade]

The 9000 in checking, is that like your month to month budgeting money or that's just extra money?

[Katie]

Oh, my goodness. I just need to move that over to savings. Certainly. I'm. We're very good. My family is very good at living frugally. But where we need grow is we just don't know what to do next.

[Dave Ramsey]

Are you enjoying your life?

[Katie]

Yes. Okay.

[Dave Ramsey]

You're not scared? You're not just saving every penny and living like a miser? You guys are enjoying, like. Are you debt free?

[Katie]

We're debt free, yes.

[Dave Ramsey]

Good house and everything or do you have a mortgage?

[Katie]

House and everything. No mortgage.

[Dave Ramsey]

31 years old.

[Katie]

Wow.

[Jade]

Great.

[Katie]

Yeah. Yes. It's wonderful.

[Jade]

What's the income situation?

[Katie]

I am a public school teacher, and so I make about $55,000 a year. And then my husband is a farmer, rancher, and so that income changes year to year. So we do have some liquid assets on top of that. And my husband is very much. Let's invest in cows, in things that we can talk.

[Dave Ramsey]

What's. What he understands or land. He's like stock market. Why would I do that?

[Katie]

And I'm kind of. I'm afraid of it too, because I. I'm completely comfortable working for the man and knowing What I'm going to get as far as month to month paycheck in the stock market is scary. It took me forever to get a Roth IRA just because I thought it was a scary.

[Jade]

Tell us what's scary about it. We want to know more about that. Because you, you're not the only one probably that feels that way.

[Katie]

Yeah. You don't know for sure what the return is going to be on your investment. Right. And I guess you don't. You don't know that either with cattle or sheep or whatever you have. But it's a little more concrete than you can see it, the world of the stock market. I don't understand.

[Dave Ramsey]

So does your husband want to understand? Is he also wanting to go, hey, we should probably do this?

[Katie]

He follows it. And he's. I feel like he's way more educated. I know that he's way more educated than I am. And he's brought up the idea of a financial advisor and maybe hiring one of those. And I thought, gosh, do we need to spend the money on hiring a financial advisor if we're not in debt? I don't know. I don't know much about that.

[Jade]

Katie, when you think about investing, the scary part that you were saying, you don't know what your return on investment is, when you think of that, do you think of it as something that you invest in and then, you know, a couple years later you, you get your money out, or do you look at it as something that's kind of just kind of like you've done with these CDs or these savings where you just put the money in and you let it stay there for a long, long, long time until. Until you. You need it?

[Katie]

Yeah, I mean, I would be completely comfortable with putting it in there and letting it stay for a long time. I just didn't know where to put it.

[Jade]

Well, the good news is that's what people are going to tell you.

[Katie]

Yay. Okay. Even with the Roth, I just let. I let my job say where that money was going to go.

[Dave Ramsey]

Do you have a Roth 403B?

[Katie]

I don't know yet.

[Dave Ramsey]

Okay. I'm guessing if you work for, you know, if you said you're a school teacher, you likely have access to a retirement account through your employer, and it's likely a 403B. I do.

[Katie]

Yep.

[Dave Ramsey]

Okay, so you guys are in baby step seven, which means the whole 15% in baby step four. That's out the window. Now you can increase your investing as much as you want, and I would encourage you guys, to max out all of your tax advantaged retirement accounts first. So things like a Roth ira, you both can open one of those and max it out. That's $7,000 each. That's $14,000 right there invested.

[Jade]

Okay.

[Dave Ramsey]

And then you can max out your, your Roth 403B. That's another great option to max out. And even beyond retirement, you guys could invest in a brokerage account and a taxable brokerage account, which just means it's not inside of a retirement account. It doesn't have the tax advantages, but you're just investing in the open market and it's just kind of liquid. You could cash it out at any time without penalties. Okay, so those are a few options.

[Katie]

What is your opinion on. Oh, I'm sorry, there's a little bit of a lag. What is your opinion on a. On hiring a financial advisor to help guide us through that?

[Dave Ramsey]

I think it's a great idea. I think your husband thinks, or you may have thought, well, financial advisors are people who are in deep debt who need to help getting out. That's more of a financial coach. A financial advisor is helping people build wealth. That is their A1 goal. And if you want help finding one, you can jump on ramseysolutions.com and click on Smartvestor Pro and they can walk you through the entire process of here's what you should be investing in here. You know, they can address your kind of risk tolerance that you're talking about. Hey, I'm worried about the market. They can walk you through. And the truth is that the trajectory of the stock market is very comforting to me. It's up and to the right. But if you zoom in on any given day, if you know the president burps and the stock market takes a dip, it is scary to look at.

[Katie]

Right, right.

[Dave Ramsey]

But then you see over a six month, one year, five year period of time, you can see that it's going to come back stronger than ever. Every few years we're going to see more record highs. And so if you want more on that, I'm going to send you a copy of two books that I think will help you understand all of this. One is Dave's book, Baby Steps, Millionaires. That will really give you.

[Katie]

I heard that in a commercial.

[Dave Ramsey]

Okay, perfect. Okay, I'll send that one to you. And I'll also send you my book, Breaking Free from Broke. I have a whole chapter called wealth is Patience and another chapter on investment traps. You and your husband read those chapters and it's going to give you a great primer on exactly what you need to know and nothing else. No jargon, no complicated financial information. Just here's the clear path, here's when to invest, here's what to invest in. Here's how to do it right. Here's how to become multimillionaires and build wealth. And the key principle for you and your husband is that you don't want to put all of your eggs in one basket. So I love that he's a very talented farmer and rancher. That's a great skill to have. He knows it well. He's going to continue to do well there. But it's also wise to have money elsewhere that's growing for you.

[Katie]

Yes. Okay. Okay. That's really helpful. Thank you so much.

[Dave Ramsey]

Absolutely. And one thing to think about, risk. This is interesting, Jade. There is just as much risk in letting your money sit under the mattress at home as there is having it in the stock market, if not more having it under a mattress.

[Jade]

And not to mention, I mean, you're just missing out. You're losing. You're losing money in many ways because there's an opportunity cost there that people fail to consider.

[Dave Ramsey]

Yeah.

[Jade]

You know, what she said is so true. You know, I do think a lot of people get weirded out by the stock market because they are looking at it short term, whether it's day to day or week by week. And I just always encourage people to think about the long term. Right. We always talk about you should be averaging 10 to 12%, and that really is an annualized rate of return. Instead of just looking at the year, it's looking at a picture of many years over time.

[Dave Ramsey]

I don't. Where are they getting 10%? I'm not seeing that in my account. Like, listen, it's an average over time, over time.

[Jade]

And that's why I asked her, I said, you know, are you looking at this as a. You know, I keep it in for a month and then I pull it out and see what happens.

[Dave Ramsey]

It goes down, I get spooked and rip it out.

[Jade]

Right. It's like, no, you set it and forget it. And you're going to look up in 20 or 30 years, depending how old you are, or 15 years, and you're going to say, wow, yeah, that annualized rate of return thing really did pull through for me. And that's how this works. It's not. It's not a slot machine. Right. It's not a. A gamble or a bet that you just put the money in and you're just hoping you hit big.

[Dave Ramsey]

And that's why we don't recommend single stocks.

[Jade]

That's right.

[Dave Ramsey]

We only recommend mut funds when it comes to investing in the market. And that just means a giant group of stocks. So 90 to 200 or more stocks sitting in this one basket. And even then we diversify across those. We want some that are focused on aggressive growth, some that are more stable. That's growth and income.

[Jade]

That's right.

[Dave Ramsey]

And then you get the middle ground which is growth. And so if you just do that and international as well because.

[Jade]

Right.

[Dave Ramsey]

We saw this recently, this year the US market took a huge dip in international climbed way up.

[Jade]

That's right. That's right.

[Dave Ramsey]

And so that's been Dave's whole thing is hey, I know it's been underperforming the US stock market but we do this to hedge our bets against something happening with the US stock market. So a lot of nerdery to say if you just invest over a long period of time you're going to be okay.

[Jade]

That's right.

[Dave Ramsey]

And our millionaire study proved that out 8 out of 10 said hey, the key vehicle to me becoming a millionaire was just investing in my company retirement plan.

[Jade]

Yeah.

[Dave Ramsey]

So as a teacher is spot on.

[Jade]

That's right.

[Dave Ramsey]

That was the number three. Number three profession. Millionaires out of 10,000. And it's because teachers go yeah, I'll follow a proven plan. Yeah, I follow my syllabus, the curriculums. I can follow Dave Ramsey stuff too. Katie, hang on the line. We'll send you those two book. For the rest of you check out our investing guide. Go to ramseysolutions.com guide completely free. They give you all the tools and info you need. 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.