How Do I Build Wealth In This Economy?

Summary

Podcast Summary: The Ramsey Show Highlights – "How Do I Build Wealth In This Economy?"

Host: Ramsey Network
Release Date: April 28, 2025
Duration: Approximately 9 minutes
Format: Host (A), Caller (B), Expert Contributor (C)

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1. Introduction

In this episode of The Ramsey Show Highlights, the Ramsey Network delves into strategies for building wealth amidst economic uncertainties and stock market fluctuations. The discussion centers around addressing listener concerns, demystifying market behavior, and providing actionable investment advice from financial experts.

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2. Listener's Concern with Market Volatility [00:42 - 01:37]

Caller B, a 26-year-old listener, initiates the conversation by expressing anxiety about the current state of the stock market. He references traumatic headlines and fears of an impending crash:

B [00:42]: "With everything going on within the market and everything like that, how is it that you're supposed to grow well throughout everything? With the stock market supposedly crash and everything like that."

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3. Host's Reassurance and Market Analysis [01:37 - 02:17]

Host A responds by contextualizing the current market dip, emphasizing that fluctuations are normal and not indicative of a catastrophic crash:

A [01:07]: "The stock market does not like an unpredictable environment... But it's not a crash, Preston. Would you understand that?"

He reassures listeners that despite daily volatility, the broader economic indicators remain stable, and past market downturns have been navigated successfully.

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4. Understanding Long-Term Growth [02:24 - 05:58]

a. Host Discusses S&P Performance [02:24 - 05:30]

Host A highlights the historical performance of the S&P 500, pointing out significant growth over the years despite short-term declines:

A [02:24]: "In 2023, the S&P went up 23%, in 2024, it went up another 23%. So the stock market has gone up 50 plus percent in two years."

He stresses the importance of ignoring daily news drama and focusing on long-term investment strategies. The key takeaway is to avoid making investment decisions based on sensationalist media coverage.

b. Addressing Market News and Psychological Impact [05:30 - 07:31]

The conversation transitions to the psychological effects of market news. Host A criticizes media outlets for perpetuating fear:

A [02:17]: "The news is full of drama queens... fear porn."

He shares his personal investment strategy of capitalizing on market dips by allocating extra funds, confident that the market will rebound:

A [05:29]: "I think the stock market's on sale. I think it's a great time to buy. How's that sound?"

Expert Contributor C reinforces this by advising listeners to maintain perspective:

C [04:23]: "When in doubt, zoom out. Look at the 5-year, 10-year all-time track record of the S&P 500... it's a bump in the road."

Both speakers emphasize that short-term losses are merely "paper losses" and should not deter long-term investment plans.

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5. Historical Resilience of the Market [07:40 - 08:28]

Host A reflects on past economic downturns, such as the Covid-19 pandemic-induced market crash, illustrating the market's resilience:

A [07:48]: "We were back to record highs."

He points out that despite significant drops, the market has always recovered, debunking doomsday predictions made during such times.

Expert Contributor C adds:

C [08:28]: "It's too strong. Can't hold us down."

This segment underscores the importance of patience and long-term commitment to investment strategies, reminding listeners that the market has historically bounced back stronger from downturns.

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6. Clarifying the Market vs. Economy [08:30 - 09:06]

The discussion concludes with a critical distinction between the stock market and the overall economy:

C [08:42]: "The stock market does not actually represent the economy one for one. It's a part of it."

Host A elaborates, noting that a significant portion of the GDP is driven by small businesses, which operate independently of stock market performance:

A [08:47]: "54% of the gross domestic product is small business. Has absolutely nothing to do with the stock market."

This clarification helps listeners understand that a bustling stock market does not necessarily mirror the health of the broader economy and vice versa.

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7. Notable Quotes

• Host A [02:17]: "Fear porn. That's why 73 apps go off when a tornado is 60 miles away."
• Expert C [04:23]: "When in doubt, zoom out."
• Host A [05:29]: "I think the stock market's on sale. I think it's a great time to buy."
• Host A [08:28]: "Too strong. Can't hold us down."
• Expert C [08:42]: "The stock market does not actually represent the economy one for one. It's a part of it."

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8. Conclusion & Key Takeaways

Throughout the episode, The Ramsey Show Highlights provides valuable insights into building wealth during uncertain economic times. The key takeaways include:

1. Long-Term Perspective: Focus on long-term investment growth rather than short-term market volatility.
2. Ignore Sensationalist News: Avoid making investment decisions based on fear-inducing media reports.
3. Historical Resilience: Recognize that the stock market has historically recovered from downturns.
4. Distinguish Market from Economy: Understand that the stock market is not a direct reflection of the overall economy.
5. Strategic Investing: Consider market dips as opportunities to invest more, capitalizing on lower stock prices.

By adhering to these principles, listeners are encouraged to maintain a steady investment course, leveraging historical market trends to build and sustain wealth over time.

Transcript

[A]

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[B]

I've grown up listening to you. My mom, every day when she'd pick me up from school, she pick me and my brother up and would be listening to you. So I wanted to give a quick shout out to her and a shout out to you.

[A]

How old are you?

[B]

26.

[A]

Okay, so you're like 10 years old or something. Listening. Okay. Wow.

[B]

I know, I know. I was a child. I grew up listening to you.

[A]

Wow. How can we help today, sir?

[B]

So my question was, was with everything going on within the market and everything like that, how is it that you're supposed to grow well throughout everything? With the stock market supposedly crash and everything like that Got my cat jumping on me. Sorry.

[A]

You remember that part where you were listening to me before?

[B]

Yeah.

[A]

And if you've. If you. You met, you might have been too young to hear it. Okay. But probably this is not the first time the stock market has gone down.

[B]

Yeah.

[A]

And there's nothing to indicate that this is a crash. Nothing. Okay? Nothing. The US Economy is not imploding and falling in. Not even close.

[B]

Got you.

[A]

Stock markets having a bit of a temper tantrum over tariffs. Because they're trying. The stock market does not like an unpredictable environment. And this is unpredictable as crud right now. Cause people don't know what's gonna happen. Exactly. Because I think Trump makes it up every morning, so who knows what he's gonna do next. Right. And so. And he kind of likes it that way. He's messing with the stock market and he's messing with these countries beyond belief. No question about it. It's almost entertaining to watch. But it's not a crash, Preston. Would you understand that? Right.

[B]

No, I got you.

[A]

Okay. So in 2023, you were 24 years old.

[B]

Yeah.

[A]

The S&P went up 23% or 26% in 2024. Last year, it went up 23%. So the stock market has gone up 50 plus percent in two years. In the last seven days, it's down 6 or 8%. Not exactly a crisis, dude. Mathematically, I got you. Mathematically, no. So what you can't do is you can't listen to the news to give you input for investing decisions, because the news is full of drama queens. Their job is to make your heart rate change, your eyes dilate and sweat to appear in your palms. That's their job. Then you get addicted to the fear porn that they pedal, and then they pedal more. Fear porn. That's why 73 apps go off when a tornado is 60 miles away. That's fear porn. A tornado that's 60 miles away is not going to hit you, but your app is going off and waking you up in the middle of the night and your heart rate spikes, adrenaline is released in your body and you're in freakout mode. And that's the exact same crap that's happening right now. The stock market, it's false evidence appearing real. It's not real. And so you're fine. And let me tell you what I'm doing. I'm scratching around for some extra money to throw it in right now because I think the stock market's on sale. I think it's a great time to buy. How's that sound?

[B]

No, I got you. I was just wondering.

[C]

Here's two quotes for you, Preston. Etch these in your brain. Number one, when in doubt, zoom out. When you zoom out, go look at the 5 year, 10 year all time track record of the s and P500. And you'll go, ooh, up and to the right with a few little dips in there. Oh, yeah, let's zoom in. Ah, it's a crash now. Just a little dip. We'll be all right. It's a bump in the road. And the other one is this time in the market beats timing the market. And so what you're saying is, is now the time to sell?

[A]

I don't know.

[C]

I don't want to lose money. You didn't lose money. You have the same exact amount of shares that you had before. The value is temporarily taken a dip. It will come back. And a month from now, six months from now, a year from now, we'll be back to all time highs. And the news will not be covering it because that doesn't get clicks and views.

[A]

So for you, those of you listening out there, I've got one particular account that I've got sitting up waiting to buy some real estate with, and I've got about $5 million in an S and P and it's actually about just right at $5 million. And so I clicked on it, Just see what this did to it. And I think it lost like it's down like 200 grand, something like that. Okay, so which is a lot of money, but you've lost $200,000. I haven't lost anything. I didn't sell. If you sell, you take the loss.

[C]

You lock it in.

[A]

I didn't lose anything. I'm just sitting here watching with great amusement the roller coaster ride. And I'm gonna try to throw some in while it's down. Cause it's gonna ride up as soon as some of this bizarre crap clears the air. And I don't know whether that's a month or six or six months. And I don't really care because I don't have to do anything with that money. I'm just going to let it sit there and ride it out. Ride it out.

[C]

You're not desperate.

[A]

Wave up, wave down, wave up. And you don't lose anything until you sell. It's just a paper loss. I mean, it's a chart is all it is right now. And that same account, by the way, has gone up freaking 23 and 26% in the last two years. Now that's not normal up either. It shouldn't be that much. Your average on the S and P since it began is 11.8. And so that's about what the stock market has averaged since it began. And so, you know, 1112, somewhere in there is the average annual rate of return. So 23 and 26 aren't normal. Those are unusually like double of normal. Like a twice as good as normal. But did you hear anyone when the you had two consecutive years twice as good as normal. Did you hear a single person on Fox News or CNN go, look how great the market is.

[C]

Wow.

[A]

Not one, not a one. But are they all screaming and like there's blood in the streets and there's a crisis and the entire US economy has collapsed and they're, you know, we're going to have an upheaval and a revolution or good Lord, you would think that these people. But nope. Nope. So I'll get to be on there again tonight. I'll be on one of them tonight. Tell them everybody calm down. Calm your butt down. Calm your butt down. When would you say that was? Zoom in, zoom out. I might try. I'll try to quote that.

[C]

I didn't come up with it, but when in doubt, zoom out.

[A]

When in doubt, zoom out.

[C]

So if you got all this fear, you just pan back and go, oh, it's actually up 80% over the last five years. When you look at it a different way.

[A]

Yeah.

[C]

Instead of zooming into the one little dip that's over a five day period, freaking out. So perspective definitely helps. And you have the benefit of that. Having invested for 30 plus years.

[A]

You were sitting here at the same desk you and I were when the Fauci pandemic hit and the market went down like 50% or something. 57 dove right. We had this two month chart that just dove off the cliff for two months. And everybody's like, oh, the pandemics ruined the economy. The economy will never do y'all. I mean, is the economy ruined? No. Hello.

[C]

We were back to record highs.

[A]

Does anybody remember predicting the end of the world during. I remember people predicting the end of the world. It's the US Will never recover from. Fauci will never make it. He killed it. No, not even Fauci could kill it. So there you go.

[C]

It's too strong. Can't hold us down.

[A]

Sorry, y'all. I mean, it's just. It was disappointing. For those of you that wanted the end of the world to come and didn't happen.

[C]

For you, it's important to note the stock market does not actually represent the economy. One for one. It's a part of.

[A]

That's true. 54% of the gross domestic product is small business. Has absolutely nothing to do with the stock market.

[C]

You're not going to find it on.

[A]

The S P. Thank God. Yeah.

[C]

So Dave likes it.

[A]

We're going to. We're going to invest and we're going to invest when it's up, we're going to invest when it's down. We're going to invest and we're going to invest. We're going to invest and then we're going to look up and we're going to be worth millions of dollars. Hello. This is how you do it, boys and girls.

[C]

Don't jump off the roller coaster, please.

[A]

Not in the middle of the ride. Oh, my goodness. Create your free every dollar budget today. The simplest way to budget for your life.