News from the Tennessee Valley Columnists
MONDAY, JULY 2, 2007

Dave Ramsey

Student needs help investing inheritance

Dear Dave: Iím 21 and currently in college. Next month Iíll be receiving an inheritance of about $40,000. I donít know anything about stocks, mutual funds or CDs, but I donít want to lose all this money. I donít have any debt, so what should I do? — Jessie

Dear Jessie: Iím glad youíre asking questions. One of the fastest ways to lose money is to put it into something when you donít know how the investment works.

You donít need to change your major to finance to make this happen, but you do have a $40,000 responsibility that you didnít have before. For now, a simple savings account is fine. Iíd park $30,000 in there and just forget about it for a while. Then use $5,000 to set up an emergency fund, and blow $5,000 on some things just for you. After all, spending and having fun with money is one of the things itís good for!

But hereís something to think about once youíve educated yourself on investing, Jessie. If you put that remaining $30,000 in a good growth stock mutual fund, by the time youíre ready to retire youíll be looking at about $10 million.

Talk about being able to retire with dignity and change your family tree! — Dave

Real estate

Dear Dave: Weíll be completely out of debt in September and looking to buy a home in the next year or two. Weíre thinking of buying a repo home. Do you have any suggestions on where to find these? — Levi

Dear Levi: One way is to buy the home from the owners before the sale happens. Itís better for them because they realize some money and it stops the foreclosure. Itís better for you, too, because you wonít find yourself in a bidding war later on the courthouse steps! You can also find listings in your local newspaper under the legal notices section, and if you live in a metropolitan area itís not hard to find a legal newspaper that lists incorporations, real estate transactions and foreclosures. Good luck, Levi! — Dave

Bouncing checks

Dear Dave: Iíve started getting phone calls about checks that are bouncing. These are not my checks, theyíre not on my account and I didnít write them, but theyíve got my name and phone number on them. I called the police, and they contacted the banks and are investigating. Iíve also put passwords on my checking and savings accounts. Is there anything else I can do? — Joanne

Dear Joanne: This is one big mess! But youíre right on track in doing what you should to clear your name and protect yourself. Youíll want to put a fraud victim alert on your credit bureau, too. And make sure you get copies of the police report. Then, send a copy to TeleCheck as proof that youíre a victim of identity theft and not some kind of deadbeat! — Dave

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Dave Ramsey Dave Ramsey
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