Dear Dave,
I’m a sophomore in college studying agriculture business. I grew up on a farm, and recently I decided it’s time to sell a small cattle herd my dad helped me start growing when I was a kid. I don’t have any student loan debt, and I’m paying for school with lots of scholarships and some help from my parents. I can sell the herd for about $20,000, and I was wondering how you think I should invest that money for the future.
Colby
Dear Colby,
You know what? I think the best investment Colby can make right now is in Colby. By that, I mean I want you to finish your degree debt-free more than I want you to become a professional investor.
If I were in your shoes, I’d park the proceeds from your cattle sale in a high-yield savings account. Think of it as an insurance policy that will enable you to finish up school without taking out a bunch of student loans. I know that doesn’t sound as glamorous as investing, but think about this: Even though that $20,000 might not grow a ton in two or three years, it will grow. And if you don’t need it for school, it’ll be sitting there waiting for you when you’re ready to set up house and start your new life after graduation.
Colby, in your case, finishing school and getting a valuable degree — one you can actually use to make a future for yourself — is going to give you a better mathematical return than a mutual fund. Why? Because you are a better investment than a mutual fund. Literally. I’m not talking about just in a philosophical or spiritual sense, but financially. What you’ll be able to do with your life and the money you’ll make in the process is a great return on your hard work and tuition dollars.
I can tell you grew up on a farm, young man. You’re definitely no stranger to real work, planning ahead and thinking about the future. I’m proud of you, buddy!
— Dave
Dave Ramsey is an eight-time national bestselling author, personal finance expert, and host of “The Ramsey Show.” He has appeared on “Good Morning America,” “CBS This Morning,” “Today,” Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth, and enhance their lives. He also serves as CEO of Ramsey Solutions and is the author of numerous books including Baby Steps Millionaires: How Ordinary People Built Extraordinary Wealth–and How You Can Too.
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