you're listening to Ramsey every day millionaires where we talk retirement building wealth and outrageous generosity

as seen as with us in Los Angeles. Hey, I seen what's up?

Yes, hi. We have saved $200,000 for our children's education and we will be needing this money seven years from now.

So I'm a stay at home mom and my husband works. So we want to invest somewhere where to secure and it can maximize in seven years.

So when my children want to go to undergrad and grad schools, we can pay for the tuition and they remain debt free.

Wow, that's amazing. Well done. So what's it invested in now?

They're not invested. They're sitting in bank and they're saving account. So I want to invest and see because I've been listening to your show and I wanted to know like if I can maximize like double or a little more than that.

So when my kids go to college, they can just do up their studies and they don't worry about this debt and all that.

Yeah. Hey man, well done. How many kids do you have? I have three kids. One is already in college and a season scholarship and the two of them are younger.

So they will take some time like seven years and nine years to be in grad school. So that's what I was planning for them that at least they are covered.

He's he's lucky that he got all that but not everyone is lucky. Wow. Well, kids. Yeah, that's amazing.

Sounds like the oldest one's like his mom. So people who make their luck, those kind of people. So here's an interesting number. If you invest, if you invest 200,000 at 10% in seven years, it will about double.

So be worth four months. If you don't, if you don't anything to it, it'd be worth 400. If you invest that at seven percent, it'll take 10 years for it to double.

If you, yeah, and so this is the problem. Now, if I have that money to invest, I'm personally comfortable with and I recommend putting it in good growth stock mutual funds.

Now that does mean you're going to see some ups and some downs along the way. But the averages are well north of 10% on the stock markets history. That's the averages.

Now, some years it could be down 4% other years. It could be up 18% and so, you know, it depends on the ride on how you get there. But here's the thing. If it's average 10% if it does half of what it's averaged, we have one of the worst seven year periods in history.

And it does half for seven years because it went way up and then went way down, down, down, down, down, down, down, and then up again. And it averages only 5%. Still five times what you're making right now.

Okay. So if like there are certain mutual funds like you can go vanguard, a facility, but some of them have expense ratio of 0.7 something like that.

So what is a good expense ratio? We should be looking at.

You know, I spend 85% of my analysis on a mutual fund on its average rates of return and I only spend about 10% of my analysis on the expense ratios.

Because the here's the thing. If you have a fund that has a 0.2.002% higher expense ratio, but it averages 3% more, you just kicked its butt. Right. And so everybody gets caught up on what they what the expense ratios are and what the costs are and they're looking for wrong numbers.

You don't want to ignore that number and overpay for expenses. But you know, you can get you can really miss out on a really great fund with a really great rate of return.

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