Is It Too Late To Start Investing At 65?

Summary

Podcast Summary: The Ramsey Show Highlights
Episode: Is It Too Late To Start Investing At 65?
Release Date: February 5, 2025
Host/Authors: Ramsey Network (Featuring Dave Ramsey, Ken Coleman, George Kamel)

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Introduction

In this episode of The Ramsey Show Highlights, the hosts delve into the financial dilemmas faced by Judy, a 65-year-old woman with no savings, contemplating whether to begin investing in mutual funds or focus on building a savings account. The discussion centers around her financial stability, reliance on a boyfriend for support, and strategies for securing her financial future.

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Judy's Financial Situation

Judy initiates the conversation by expressing her concern over having zero savings at the age of 65. She questions whether she should start investing instead of solely building a savings account, highlighting her limited income and dependency on her boyfriend.

• Judy (00:06): "I am 65 years old. I have zero savings right now. And I wonder if I should start, instead of building up a savings account, build up an investment account like mutual funds, as you and Ramsey speak about all the time."

George emphasizes the importance of not relying solely on savings:

• George (00:24): "Yeah, we say, you know, you can't save your way to wealth."

Ken Coleman's pragmatic approach underscores the necessity of planning for long-term stability:

• Ken (00:43): "You can't use that line of thinking. You gotta plan for the best, know for the worst because this is for your long-term play."

Judy reveals her current financial sources:

• Judy (00:58): "I work part-time. Yeah, I work. I make about sixteen hundred dollars a month."

She further clarifies her living situation and financial dependency:

• Judy (01:06): "I live with my boyfriend. He covers most of the expenses. Most of my income is disposable."

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Relationship and Dependency Concerns

The conversation shifts to Judy's relationship with her boyfriend, who significantly contributes to her finances. Ken questions the sustainability and stability of this arrangement, especially considering Judy's previous attempts to end the relationship.

• Ken (01:17): "Well, what happens if you guys have a breakup? He's been your sugar daddy."

Judy shares the history of their relationship and recent challenges:

• Judy (01:31): "We had a big difference. Well, the last time his drinking was out of control, but he has stopped drinking and so we're back together the last two months."

George acknowledges the positive change:

• George (02:03): "He's been two months sober. That's good."

Ken expresses concern over Judy's financial reliance:

• Ken (02:09): "I'm really passionate now about making sure that you stop relying on him."

The lack of formal commitment exacerbates Judy's financial vulnerability:

• Judy (02:31): "He doesn't want to marry me. That's the Problem."

George highlights the precariousness of Judy's financial situation without legal protections:

• George (02:38): "But I'm saying it puts you in a precarious situation financially because you don't have any legal or financial protections."

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Housing and Assets

Judy discusses her home ownership, which was significantly affected by a natural disaster:

• Judy (03:07): "I do own a home that I am... the home just got flooded. So that put me back... it wiped out any savings I had."

She explains the financial dynamics of her property:

• Judy (03:16): "So we're gonna rent out the house."

The value and ownership structure of the home are scrutinized:

• George (03:22): "We bought it at 50 and it's probably anywhere between 200 and 300,000 now is what it's worth."

Judy clarifies the ownership and financial input:

• Judy (03:45): "We bought it together and we paid cash for it at $50,000 during the hosting."

Ken and George question the legal implications and ownership rights:

• Ken (04:12): "Wow, this is delightful... 65-year-old's been dating for 18 years."

Judy underscores the lack of legal marriage preventing enforceable financial agreements:

• Judy (04:27): "I can't force him to marry me."

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Advice from Hosts

The Ramsey team offers Judy practical advice to secure her financial independence:

1. Establish an Emergency Fund:

   • George (05:25): "You need to save money. You can't save and invest until you make more."
   • George (05:28): "There's a foundational savings you need before you ever put a dime into investments. And that's an emergency fund. So you need three to six months of expenses."

2. Increase Income:

   • Ken (07:00): "If Judy doesn't make some changes, Judy's gonna have to find another sugar daddy."
   • George (07:11): "Get your own savings in place, then you can begin investing."

3. Begin Investing Once Financial Stability is Achieved:

   • George (07:26): "I would say 10,000 minimum. And then you can begin investing."
   • George (07:40): "The right way to invest, what to invest in. You don't need to be risky."

4. Educational Resources:

   • Ken (08:02): "Join us March 4th and 5th. Judy, you can watch with your boyfriend."
   • George (08:12): "Join us March 4th and 5th... Best impression I've heard today."

The hosts emphasize the importance of financial independence and caution against relying on a partner for financial security.

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Conclusion

The episode underscores critical financial principles for individuals approaching retirement age without substantial savings. Judy's predicament serves as a cautionary tale about the risks of financial dependency and the necessity of proactive financial planning. The Ramsey team provides actionable steps—building an emergency fund, increasing income, and educating oneself on investment strategies—to empower individuals like Judy to secure their financial future independently.

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Notable Quotes:

• George (00:24): "You can't save your way to wealth."
• Ken (00:43): "You gotta plan for the best, know for the worst because this is for your long-term play."
• Ken (02:09): "I'm really passionate now about making sure that you stop relying on him."
• George (05:28): "There's a foundational savings you need before you ever put a dime into investments."
• George (07:26): "I would say 10,000 minimum. And then you can begin investing."

These quotes encapsulate the episode's emphasis on financial independence, prudent saving, and strategic investing.

Transcript

[Dave Ramsey]

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[Judy]

So I am 65 years old. I have zero savings right now. And I wonder if I should start, instead of building up a savings account, build up a investment account like mutual funds, as you and Ramsey speak about all the time.

[George]

Yeah, we say, you know, you can't save your way to Wells.

[Judy]

The thing is, I'm 65 and I. Nobody knows how long they're gonna live, so like 65. What if in five years, you know, it's. It's not gonna move a lot?

[George]

Sure.

[Ken]

If you're not here in five years, it won't matter.

[Judy]

That's true.

[Ken]

You see, you can't. You can't use that. You can't use that line of thinking. Right. You gotta. You gotta plan for the best, you know, and hope for the best. But you know, once the worst happens, it really doesn't matter because this is for your long term play. Do you work right now?

[Judy]

I work part time. Yeah, I work. I make about sixteen hundred dollars a month.

[Ken]

Are you single? Married?

[Judy]

I'm. I live with my boyfriend. He covers most of the expenses. Most of my income is disposable. As I said. I hate that term, but yeah.

[Ken]

Well, what happens if. And boy, I'm sure that's nothing but bliss with. Well, what happens if you guys have a breakup? He's been your sugar dad.

[Judy]

Yeah. Yeah.

[Ken]

How old is this? How old is this young fellow? Oh, wow.

[Judy]

He's my age.

[Ken]

He's your age. And you. Did you just slipped in there that you've tried to break up with him a couple times?

[Judy]

I. We had. Well, yeah, we. Yes, but.

[Ken]

Well, what happened?

[Judy]

There was a big difference. Well, the last time his drinking was out of control, but he has stopped drinking and so we're back together the last two months.

[Ken]

Okay.

[George]

He's been two months sober. That's good.

[Judy]

Yeah.

[George]

Okay.

[Judy]

Yeah. Really, really good.

[Ken]

I really appreciate you sharing all this and I'm glad we know this now because I think it really.

[Dave Ramsey]

It.

[Ken]

It's. It's really. I'm really, really passionate now about making sure that you stop relying on him. Now I'm happy you guys are back together. Hopefully that sustains. But you've tried to break up with this guy twice. This is a relationship that we could at least say has not been stable, so.

[Judy]

Well, it is 18 years.

[Ken]

Okay. But my point is, is you guys aren't married. There's no. There's no legal involvement.

[Judy]

He doesn't want to marry me. That's the Problem.

[Ken]

I get it. And you're broke.

[George]

But I'm saying it put. He's saying it puts you in a precarious situation financially because you don't have any legal or financial protections. So you need to treat your finances.

[Judy]

I do own a home that I am. I mean, as I said, as you know, I live near Tampa, so the home just got flooded. So we. So that put me back in. Not in a hole. I'm not in a hole. I'm not in debt. But it wiped out any savings I had.

[Ken]

Are you living in his home right now?

[Judy]

I'm living in his home, but I was in my home.

[George]

Okay. And what's going on with your home to rent out?

[Judy]

Is it being now we're gonna rent out my home.

[George]

Oh, boy. What's your home worth?

[Judy]

Well, there's good news and there's bad news. The good news is we bought it at 50 and it's probably anywhere between 2 and 300,000 now is what it's worth.

[George]

And is it paid for?

[Judy]

Yeah, yeah, yeah, yeah. We bought. We paid. We bought it kind of together. We bought it together and we paid cash for it at $50,000 during the hosting.

[George]

You and your boyfriend did?

[Judy]

Yeah.

[George]

So what happens if you guys split and you wanted to sell it?

[Judy]

It's my name. It's in my name only. Only.

[George]

But you said you guys bought it together.

[Judy]

Well, he gave me the money.

[George]

He said wouldn't he want to write to some of the money?

[Ken]

Hold on, I need to hear the voice. What did he say? Give us the whole voice treatment on that. What did he say?

[Judy]

I didn't do it very well.

[Ken]

Do it again.

[Judy]

Well, here we will get married. But you can have this house and now. And then if anything happens, you always have this house.

[Ken]

Wow, this is delightful. I feel like you guys are a reality show waiting to happen. You know, 65 year old's been dating 18 years. But this is interesting.

[George]

George, this is a Netflix series.

[Judy]

I can't force him to marry me.

[Ken]

No, Judy, no, no.

[Judy]

You want to. You want to. You want to hear something even worse?

[Ken]

Yes.

[Judy]

You do.

[Ken]

Yeah.

[Judy]

My work. I work for him.

[Ken]

Oh, boy.

[Judy]

He has a small business.

[Ken]

You're right, Judy. That was worse. See, George and I are on Team Judy, okay? We're wearing Team Judy T shirts right now. And. Good. And, and so you need to accept this, that you have got to get a different job, a full time job that's not paid by this guy. And you need. George, I want you to step in on what you think she should do with that.

[George]

I'm just wondering, what's it like when you ask for a raise from your boyfriend? That's gotta be awkward.

[Judy]

He said. He said.

[Ken]

I love this voice. I could talk to Judy forever. Yeah, this Judy, you're nominated for my favorite caller ever. Okay, George, let's. Let's help out.

[George]

Let's answer your original question.

[Ken]

You got to save money. You can't save and invest until you make more.

[George]

So here's the deal. There's a foundational savings you need before you ever put a dime into investments. And that's an emergency fund. So you need three to six months of expenses.

[Ken]

She doesn't have any.

[George]

Let's pretend like you do have expenses. So what would it be?

[Judy]

I do. I do. I do have to pay. Like now I'm on Medicare and I. So I have to pay that. And I have to pay for my phone and I have to pay for my car insurance.

[Ken]

Great.

[Judy]

Okay, that does. And I. And I get a Social Security check, so that kind of eats up my Social Security.

[Ken]

What's your Social Security check?

[Judy]

It's about. Well, it was a thousand, but now they take Medicare out of it, so it's little less than that.

[Ken]

Basically nothing.

[Judy]

875.

[George]

Okay. That's not enough for you to retire on. So our game plan is, hey, when and if Judy can't work anymore, how is she going to survive if sugar daddy's not in the picture?

[Judy]

Stream of income I have is that we're going to rent out the house for approximately 1300amonth.

[Ken]

That. But, yeah, but that's not enough to live off of.

[George]

Would all that money go to you? Yeah, he wouldn't take a dime of it.

[Judy]

Well, as soon as I pay back some money that I borrowed from him.

[George]

See, do you see how this gets messy and complicated? When you said, no, the house is in my name, and I went, what's.

[Judy]

Team Judy gonna do when she doesn't have the ball, you know?

[Ken]

Oh, I'll tell you right now, if Judy doesn't make some changes, Judy's gonna have to find another sugar daddy. And I don't know how many of those are left. Sweetheart, when you get to your age, you know what I mean? I mean, just keeping it real.

[Judy]

I don't want one. I don't want one.

[Ken]

Okay, great. So then how do we exist without a sugar daddy? The answer is more income. As George was taking you down the.

[George]

Line, get your own savings in place, then you can begin investing. And all of that is going to take more income. Because you don't have a ton to throw at any of this right now.

[Judy]

Okay? So like I said, If I have five to $10,000 saved, then I can start investing.

[George]

Yeah, I would say 10,000 minimum. And then you can begin investing. And I'll, you know, we'll send you our investing guide. Go to ramseysolutions.comguide and we have a whole guide showing you the right way to invest, what to invest in. You don't need to be risky.

[Judy]

I got that. The mid cap, the large cap and the small cap and the international mutual.

[George]

Index and mutual funds, probably.

[Ken]

You need to make some money and start taking care of Judy if this guy wants to.

[Judy]

I lost some money twice. I mean, I had some money, but.

[Ken]

I know, I know, Judy, but that doesn't matter.

[Judy]

You know, the hurricanes. The hurricane, I get it. That cost 20,000.

[Ken]

I know, but we're talking about the future. George, let's put her on hold. Christian, let's get her a free ticket to the live stream investing event with you.

[George]

Yeah, that'll be great.

[Ken]

I think that'll also help her.

[George]

Join us March 4th and 5th. Judy, you can watch with your boyfriend. I don't know if he's going to like it, but he can be there and hang out.

[Ken]

But he can make that voice the whole time. It'll be great.

[George]

Best impression I've heard today.

[Ken]

Yeah.

[George]

This is the Ramsey Show.

[Dave Ramsey]

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