Dave Says: When it Comes to Investing, Knowledge and Wisdom Dispel Fear

Dear Dave,
I’m 50 years old, and through a series of bad life decisions, I have nothing set aside for retirement. Now that I’m finally in a better place financially, I’m getting to the age where people say to invest conservatively. Because of this, I’m afraid to invest in anything aggressive, and that makes me feel like I’ll never be able to have a decent retirement. I’ve put aside $20,000 in a savings account so far. Any advice you have would be appreciated.
Jack

Dear Jack,
First of all, you’re not at the age where you need to be investing conservatively. I don’t know where you heard this or who told you it was a good idea, but they’re wrong. You’re only 50. I’m not investing conservatively, and I’m 63. I’m investing in good, growth stock mutual funds that are growing like weeds. And you should be too.

Listen, I’m not saying you need to shift into panic mode. But you do need to get moving on this retirement thing today. It’s great that you’ve started saving money, but I’d be pretty nervous if all I had to my name at age 50 was $20,000. At this point, you should have something like $250,000.

You mentioned being afraid to invest more aggressively. I’ve learned over the years there are two situations where fear can be a positive thing. The first is being afraid of things we don’t understand. One day when I was 12, my dad told me to move the car. I didn’t understand you weren’t supposed to stomp the gas pedal all the way to the floor. That little episode scared us both silly, and I spun almost all the gravel out of our driveway. Now, with years of practice and understanding, I’m a better driver. Being behind the wheel doesn’t scare me at all.

The other positive type of fear is being afraid of things that can legitimately hurt us — like standing in the middle of the highway. If you do this, you should be afraid an 18-wheeler will come flying down the road and turn you into a pancake.

But when you’re afraid of something just because you don’t know how to do it — like you are with investing — you can dispel that fear with knowledge and wisdom. That’s why I want you to find a good investment professional. I’m talking about someone with the heart of a teacher, who will help you learn the ins and outs of investing and take away the fear you feel. If you do this, your confidence, and your knowledge, will begin to grow. Once that happens, you’ll start to feel comfortable pouring into good retirement investments.

Get to it, Jack. You can make this happen!
— Dave

*Dave Ramsey is a nine-time national bestselling author, personal finance expert and host of “The Ramsey Show.” He has appeared on “Good Morning America,” “CBS Mornings,” “Today,” Fox News, CNN, Fox Business and many more. Since 1992, Dave has helped people take control of their money, build wealth and enhance their lives. He also serves as CEO of Ramsey Solutions.

Dave Ramsey

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.