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8 minutes ago
- Yahoo
Dave Ramsey Tells 22-Year-Old With $43K In Stocks Worried About Retirement to Slow Down — 'You're Early in the Process, Focus on Moving Out First'
Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. At 22, Nick called "The Ramsey Show" looking to get a head start on retirement. No 401(k), no massive income, but one big question: should he open a Roth IRA or go traditional? Turns out, Dave Ramsey had a different priority in mind. "You're a little bit early in your process. Not in your age — but in your process," Ramsey told him. "You're in the middle of transitional things that need to happen before you start investing." Nick lives with his parents in New York City and makes about $15,000 a year through a work-study program. He has $3,000 in savings, but thanks to a settlement from getting hit by a truck as a teen, he also has $43,000 invested — mostly in single stocks on E*Trade. Don't Miss: 'Scrolling To UBI' — Deloitte's #1 fastest-growing software company allows users to earn money on their phones. You can invest today for just $0.30/share. Warren Buffett once said, "If you don't find a way to make money while you sleep, you will work until you die." Here's how you can earn passive income with just $100. Ramsey didn't love that. "I don't do single stocks... I know a lot about them. I buy investments, I've got hundreds of millions of dollars of investments. But I don't buy single stocks because I don't like the risk associated with that," he said. "The game you're playing, there's a lot of risk." If Nick insists on holding stocks, Ramsey said to keep it to no more than 10% of his net worth, or about $2,000 in his case. The rest? Move it into mutual funds. Ramsey added that retirement saving isn't even Nick's next move. "You do not need to start your Roth IRAs yet. You need to pile up money to make the transition out of your household... get your career going. Then you need to start." Ramsey stressed that once Nick is out on his own and making real income, he can start investing 15% of it — ideally in a Roth IRA with growth stock mutual funds. "Get your own place, Nick," he said. "I don't want you 28 years old in your mother's basement, dude." The call flipped the usual narrative. Most young adults rush to leave home and buy more car than they can afford. Nick's playing the long game, but Ramsey reminded him: financial strategy should match life stage. If you're not quite sure which investment vehicles suit your own income or timeline — and you can't call up Ramsey for answers — that's where a professional financial advisor can help. Instead of taking advice from strangers online, you can match with a vetted financial advisor using SmartAsset's free tool. It connects you with local advisors who can walk you through the options based on your actual goals and risk tolerance. While Nick might've been told to pause his retirement investing, he's still ahead of where many people start. Having $43,000 in your early twenties — even in single stocks — isn't nothing. Yet in today's online world, someone will always tell you it's not enough. Ramsey's message wasn't that Nick was failing — it was that the timing just isn't right yet. For a lot of people, knowing what step comes next is half the battle. Retirement planning is smart. But it's even smarter when it starts at the right time, with the right help. See Next: Maximize saving for your retirement and cut down on taxes: Schedule your free call with a financial advisor to start your financial journey – no cost, no obligation. It's no wonder Jeff Bezos holds over $250 million in art — this beloved alternative asset has outpaced the S&P 500 since 1995, delivering an average annual return of 11.4%. This article Dave Ramsey Tells 22-Year-Old With $43K In Stocks Worried About Retirement to Slow Down — 'You're Early in the Process, Focus on Moving Out First' originally appeared on
Yahoo
8 minutes ago
- Yahoo
How life insurance can help build generational wealth and pay for milestone events
Listen and subscribe to Financial Freestyle on Apple Podcasts, Spotify, or wherever you find your favorite podcasts. It's estimated that only 51% of Americans have invested in life insurance policies, but not doing so can be a missed opportunity for more reasons than just providing for loved ones after your death. Ryan Smith, vice president of Atlanta Life Insurance, explained on Yahoo Finance's Financial Freestyle podcast that life insurance is worth the investment, especially when it comes to building generational wealth and paying for lifetime milestones. (Watch the full episode above; listen-only below.) People often overestimate the cost of life insurance. Approximately 72% of people think a life insurance policy costs more than it actually does. While premiums vary depending on the policy's conditions and the policyholder's health and life expectancy, Smith explained that, in some cases, it's only "the cost of one date night per month ... or one pair of shoes." This embedded content is not available in your region. And those relatively small premiums add up. "Every time you're paying a premium, you're creating value that can earn an interest rate," Smith explained. "And there are a number of ways this interest rate can be calculated. If it's whole life, it's typically one rate. If it's indexed, it can often be market-driven," Smith explained. Regardless of the interest rate your life insurance policy earns, it can ultimately become a valuable asset that can be used for other purposes, depending on the terms. "As you accumulate that cash value over time, that is now your asset to do things with," Smith said. "You can pull from that and repurpose those dollars for other things ... everything from your death benefit to what I'll call a savings vehicle that's earning a meaningful rate of return and also has safety and grows in a tax-advantaged manner." Read more: What is life insurance and how does it work? Smith explained that, when used properly, a life insurance policy can be leveraged to help pay for milestone moments, like education or a wedding. It could even help in starting a business. Life insurance can also build generational wealth. Starting a life insurance policy for your child while they're young can set them up for a head start on their wealth by the time they turn 18. "If you think about this illustratively, for $100 a month, when your child turns 18, they could have a cash value of $300,000," Smith said. "That $300,000 can be used to fund education, it could fund their business idea, it can do a variety of things, and all while still having that death benefit in place. So you're ensuring generational wealth transfer and the continuity of wealth through the future generations to come." "If you have the opportunity to give your family tax-free seven-figure sums," he said, "that would be life-changing across generations." Every Monday, Financial Freestyle host Ross Mac talks with key guests to discuss their wealth-building journeys and what it takes to build a lasting financial footprint. You can find more episodes on our video hub or watch on your preferred streaming service.
Yahoo
8 minutes ago
- Yahoo
After a blown deadline, what next for US-Canada trade?
A self-imposed deadline for a new US-Canada trade deal came and went on Friday. So what happens next for these two deeply entwined neighbours? Canada and the US have been locked in a tariff war for six months and, despite talk of "intense" negotiations in recent weeks, a trade agreement remains elusive. Both President Donald Trump and Prime Minister Mark Carney have poured cold water on the idea they will reach a quick, and tariff-free, deal. And Trump's open criticism of Canada's move to recognise a Palestinian state dashed hopes for a last-minute agreement earlier this week. The pessimism marks a shift in tone from as recently as June's G7 meeting, when the two leaders set themselves the summer deadline. Canadian negotiators have come to the conclusion that "it's not the end of the world" if a quick deal isn't reached and "that quality over speed and a rushed agreement matters a lot", said Fen Hampson, a professor of international affairs at Carleton University in Ottawa. Carney - who has been tight-lipped about the negotiation details - has said as much himself, repeating that just "any deal" won't do. Still, there are pressures on both sides to give businesses a reprieve. Conservative leader Pierre Poilievre said on Friday he shares "Canadians' disappointment" that a deal was not reached by the deadline. He urged Carney's Liberals to do more to "take back control of our economic future". Canada is now facing a 35% tariff rate, though there is a carve out for goods compliant under a current free trade deal. American global tariffs on steel, aluminium, autos and auto parts are hurting, as the US is a top market for those sectors. On Sunday, Canada's minister for US-Canada trade Dominic LeBlanc told the BBC's US partner CBS News that trade talks will continue, and that negotiations so far have been "informative, constructive and cordial." LeBlanc added he expects Carney and Trump to speak again in the coming days. "We think there is an option of striking a deal that will bring down some of these tariffs, and provide greater certainty to investment," he said. The Trump administration has justified those tariffs by claiming a lack of co-operation on stemming the flow of illicit drugs like fentanyl. Canada denies that, noting about 1% of US fentanyl imports originate in Canada. It has also brought in new border protections and a "fentanyl czar" in recent months in an effort to address Trump's concerns. Threatened tariffs on copper and the expected end of a global tariff exemption used by shoppers of goods under $800 could also pinch. Canada has responded with C$60bn ($43.3bn; £32.3bn) in counter tariffs on various American goods - the only country along with China to directly retaliate against Trump. "It comes as no surprise that businesses are craving certainty after months and months of tumultuous announcements," said Catherine Fortin-Lefaivre, vice-president of international policy and global partnership at the Canadian Chamber of Commerce. "But at the same time, they're not craving certainty at the expense of a really bad deal." A few factors give Canada some breathing room. On paper, it looks like the country is facing a severe tariff rate from the US, but trade is currently more free than the levies suggest at first glance. In March, Trump announced a tariffs reprieve on goods compliant with the Canada–United States–Mexico Agreement, known in Canada as CUSMA and the US as the USMCA. That deal - negotiated during Trump's first term in office - came into force five years ago. Almost 90% of Canadian exports to the US are ultimately able to cross the border duty free, if firms file out necessary paperwork, under that agreement. "That has given us a buffer, no question about it, that other countries don't have right now," said Prof Hampson. It means Canada is overall paying a much lower tariff rate than many of the deals already inked with the US, like the EU, South Korea and Japan at 15%, or Indonesia and the Philippines at 19%. Ottawa has also brought in some relief programmes for affected industries and has also collected about C$1.5bn more in import duties than in the same period last year, due to the counter tariffs. Why Trump's global tariffs 'victory' may well come at a high price See the Trump tariffs list by country Five things now pricier in Canada due to tariffs 'In business, indecision is killer' - Canadian firms seek certainty And while in the US consumer confidence is up and prices there have remained contained, it helps Canada's negotiating position if they can wait for Americans to start feeling the pain of tariffs. "It's Americans who are going to squawk," said Prof Hampson. Ms Fortin-Lefaivre predicts US businesses, especially smaller firms that don't have the same resources to withstand them, will be pressuring political leaders. "So that pressure could play to our advantage," she said. Canadians also appear willing to give the new prime minister some leeway. Opinion polls suggest they are generally satisfied with his handling of trade. Carney "understands that doing what's best for the economy right now is actually what's best for him politically", Martha Hall Findlay, director of the University of Calgary's School of Public Policy and a former Liberal MP, told the BBC. Trump has said he is imposing tariffs to boost domestic manufacturing, open overseas markets and raise money for the government. He is also using them to push countries like Canada on a range of non-trade issues, including military spending. In the last few weeks, Ottawa has significantly ramped up its defence spending, boosted security at the shared border and killed a digital tax opposed by American tech firms. Those moves show Canada is "doing what the Americans wanted us to do", said Ms Fortin-Lefaivre. She hopes Canadian negotiators are pushing for tariffs to be as low as possible, as well as working to ensure the two deeply integrated supply chains are able to continue working together. Canada is pressing for relief on the 50% steel and aluminium tariffs, which are squeezing US automakers. And on Thursday, Treasury Secretary Scott Bessent signalled in an interview with CNBC that is an option on the table. Trump meanwhile, has raised a number of longstanding trade irritants besides fentanyl, including Canada's protections around its dairy industry. Ottawa has previously warned of more countermeasures to come if talks collapse, though political appetite for that may be waning. Retaliatory tariffs "haven't seemed to have had the kind of impact that we would hope for", British Columbia Premier David Eby recently told Bloomberg. On retaliation, Prof Hampson said: "The Americans have escalation dominance here. So you want to be smart about it." A spokesperson for Carney declined to say whether more countermeasures remained on the table. Meanwhile, Canadian negotiators have been in Washington most of this week and keep pushing talks forward, with the minister responsible for Canada-US trade saying on Friday an acceptable agreement "was not yet in sight". "We all crave the certainty of a deal," said Ms Fortin-Lefaivre. But research by her business group suggests firms are making contingency plans. Almost 40% of goods exporters have already diversified suppliers outside the US, and 28% have diversified buyers. They are also looking ahead to what may be more challenging talks with CUSMA, which has proven a critical backstop, as it is up for review next year. It is all part of a wider push by the country to diversify trade away from the US, pull down barriers that have hindered trade between provinces, and press forward more quickly on major projects. The economic links between the two countries will stay strong - Canada will still be one of the largest trading partners and economic and security allies of the US. But the irony is that Trump's threats may be "forcing Canada to understand we have to get our own economic house in order," said Ms Hall Findlay. "It's going to take some really tough decisions. And I do think our current government gets this." Error in retrieving data Sign in to access your portfolio Error in retrieving data
