Friday, 01 August 2014 13:32

Short Term Savings and Extra Work to Building Wealth

Written by  Dave Ramsey
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Q. My wife and I just became debt-free, and we’re saving for our first house. We have about $75,000 in savings, and we’d like to buy a home with cash in the next few years. Where do you think we should place our money so it’s working for us while we save?


A. I don’t advise playing the market on the short term. If I were in your shoes, and looking at possibly a two- to four-year window, I’d just pile the cash in a money market account or possibly a balanced fund.


I’m a big fan of growth stock mutual funds when it comes to long-term investing. The problem with that in this scenario would be the volatility of the market. By the time you’ve saved up more money and spent time deciding on a house, the market may be down. All you’re looking for in this scenario is a wise, safe place to park it and pile it up while you prepare.


Congratulations! Debt-free is the way to be when you’re looking to buy a nice, new home!



Q. My husband has a great job, and I love my work and schedule as a substitute teacher. However, he wants me to take a full-time position so we can build more wealth. The only debt we have is our house, and we’ve already saved and invested a lot of money. What’s your suggestion for this situation?


A. First and foremost, you two have a responsibility to take care of each other and your own household. It sounds like you’re doing that pretty well. So, if he wants you to take a full-time job only to build more wealth, I think that’s a bad idea.


Wealth is for quality of life, and quality of life includes giving. It also includes a safe and stable future. But if you have to surrender the joy in life to do that — to build extra wealth or build at a different pace — well, to me that’s just wrong. Contentment has nothing to do with how many hours you work or how many zeroes are in your bank account. Contentment has to do with your state of being. It’s connected to your sense of gratitude, happiness and your priorities. The idea that contentment is on the same spectrum as ambition? No, it’s not.


I don’t think you should take on a job or a schedule you hate just to pay off your house a couple of years earlier. I wouldn’t do that, and I don’t recommend you do it either. People should do something with their lives they find enjoyable and they’re called to do. Now, if your kids are going hungry and your bills aren’t getting paid, then you do whatever it takes. But in this case, you’re happy and you guys are in a great place. I’m sure your husband is a great guy, but I think he’s wrong on this one.




Last modified on Sunday, 03 August 2014 13:33
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