"It Takes Money To Make Money Is An Excuse Broke People Make": Dave Ramsey's Response To Caller Seeking Advice About $200K Inheritance
Tuesday, Mar 4, 2025 10:28 pm ET
4min read 
In a recent episode of "The dave Ramsey Show," a 25-year-old caller named Nathan sought advice on how to manage a $200,000 inheritance he received from his late father. Dave Ramsey, a renowned financial expert, shared his perspective on wealth accumulation and offered guidance tailored to Nathan's unique situation. Ramsey's response highlighted the importance of financial discipline, patient investing, and avoiding risky opportunities.
Ramsey began by addressing the common adage "it takes money to make money," stating that it is an excuse often used by broke people. He emphasized that wealth is built through smart habits, hard work, and persistence, not by relying on large sums of money. In Nathan's case, Ramsey advised him to treat the inheritance as if it were someone else's money, focusing on not losing it first, and then figuring out how to grow it slowly through simple, long-term investments like growth stock mutual funds.
price to book ratio(5537)p/e(3567)dividend yield(6137)price to book ratio ; p/e ; dividend yield(3370)
Price to Book Ratio2025.03.04  | P/E(TTM)2025.03.04  | Dividend Yield (TTM)%2025.03.03 |
|---|---|---|
| 263.52K | 0.00 | 1.28 |
| 26.30K | 0.00 | -- |
| 3.12K | 12.01 | -- |
| 2.50K | 12.78 | 5.07 |
| 1.08K | 8.35K | 8.60 |
| 419.76 | 43.85 | 0.53 |
| 348.58 | 25.58 | 2.17 |
| 251.43 | 35.96 | -- |
| 237.32 | 0.00 | -- |
| 234.14 | 335.32 | -- |
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| PBTPermian Basin Royalty Trust |
| PGPPimco Global Stocksplus & Income Fund |
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Ramsey's advice for Nathan can be adapted for other individuals with similar financial backgrounds. Here are some key takeaways:
1. Develop Financial Discipline: Ramsey emphasizes the importance of developing healthy financial habits. He suggests that wealth will come from making informed decisions and creating a solid financial foundation, not just from an inheritance.
2. Slow Down and Play It Safe: Ramsey advises Nathan to take a patient, careful approach to investing. He suggests treating the inheritance as if it were someone else's money and focusing on not losing it first. This approach allows Nathan to build wealth steadily over time.
3. Avoid Risky Investments: Ramsey warns Nathan against making hasty investments in unfamiliar or complex opportunities. He recommends investing in things Nathan understands and is comfortable with, avoiding high-risk options.
4. Long-Term Growth with Simple Investments: Ramsey suggests investing in simple, long-term investments like growth stock mutual funds. He believes that if Nathan invests his inheritance and leaves it untouched, it could double roughly every seven years.
5. Use the Inheritance to Pay Off Debt: Ramsey doesn't explicitly mention this in the conversation, but given Nathan's income and the fact that he's on Baby Step 2 or 3, it would be wise to use the inheritance to pay off debt, especially if he has high-interest debt like credit cards. This would free up more money for Nathan to invest and build wealth.
6. Build an Emergency Fund: After paying off debt, Nathan should focus on building an emergency fund of 3-6 months' worth of expenses. This will help protect him from unexpected financial setbacks and provide peace of mind.
By following these financial habits and strategies, Nathan can build wealth over time, even with his current income. The inheritance provides a great opportunity to get a head start, but it's the consistent, disciplined approach to money management that will ultimately lead to long-term financial success.
Ramsey's advice serves as a reminder that wealth accumulation is not about having a large sum of money to start with, but rather about developing smart habits, making informed decisions, and being patient. This perspective can be applied to anyone seeking to build wealth, regardless of their financial background.
