Dear Dave,

I plan to buy another investment property with cash in the next year or two. Currently, I have $83,000 sitting in a high-yield savings account at 4% interest. My goal is to save another $50,000 to $70,000 in the upcoming months. Right now, 4% is good, but I want to make sure I’m maximizing my returns. Should I be doing something else with the money?

Brett

Dear Brett,

I like the way you’re doing things. Right now, you’re simply parking the money short term for a purchase a few months down the road. If you invest it, you might make a little more, but you’re taking more risk too. If I’m you, I’m parking the cash.

Here’s the deal: The money you’ll have to purchase another property won’t come from a return on the investment. It’ll come from you putting money in the account. The investment isn’t the secret sauce in this scenario—you are. If you invested the money and made 10% rather than 4% over two months, let’s say, that amounts to about a 3% difference. That’s nothing in your case. You’re not within a couple thousand dollars of doing a deal at the moment. Your deal is a $150,000 deal. Your return on investment isn’t going to make this happen, or keep it from happening. See what I’m saying?

Just keep doing what you’ve been doing and park the money. That’s what I’d do. People who are math nerds, like us, always look for things to fix an investment. But sometimes the thing that fixes the investment is you. You are the one doing the investing. You are the one putting money in the account. So, in this case, don’t try to fix it. Just pile up money and go do it.

Great question, Brett!

— Dave

 * Dave Ramsey is an eight-time national bestselling author, personal finance expert and host of The Ramsey Show. He has appeared on Good Morning America, CBS This Morning, Today, Fox News, CNN, Fox Business and many more. Since 1992, Dave has helped people take control of their money, build wealth and enhance their lives. He also serves as CEO for the company Ramsey Solutions.

Dear Dave,

I was recently in a car accident that totaled my car. My old car was paid for, and the insurance company is writing it off and giving me $15,000. I’m a physical therapist who does home care treatment, so I need a reliable car for work. I’m debt-free, and I’m in the process of finishing up my emergency fund, but I can’t seem to find a car like my old 2014 Toyota Camry with all the accessories. My rental car is paid for by insurance until the end of the month, and I’ve looked at used cars at a few dealerships, but the dealers and salespeople are telling me used cars still cost the same as new ones, and that I should just finance a brand-new car. I’m not sure what to do.

Valerie

Dear Valerie,

Asking a new car dealer if you need a new car is like asking a dog if it’s hungry. The answer’s always going to be yes.

The smart answer, though, is this: If you’ve got a $15,000 insurance check in your hand, go buy a great, used $15,000 car. You may not be able to find the exact car you had before, right down to all the bells and whistles, but Toyota Camrys aren’t exactly rare, either. That money will get you virtually the same car—one that is very comparable in equipment, reliability, miles and overall quality to the one that was totaled.

I realize this whole thing is a big inconvenience. And you’re probably feeling a little pressure to make a decision. But the line you’re getting about used cars still costing the same as new cars is a load of crap. Used cars do not cost as much as new ones anymore. That was true for about five minutes on the back end of the pandemic, when the Mississippi River ran backwards and used cars went up in value. It was an absolute miracle!

There seems to be something in the human brain that tries to tell us we have to get an upgrade if we total a car. I want you to fight that idea, because you don’t need to wreck your emergency fund over something that’s not an emergency. Go online, and look around there without the pressure that always goes with being on a car lot.

And I’m just going to say this out loud: A $15,000 car today is a much better vehicle than anything I drove for the first 30 years of my life. The quality of used vehicles and the life left in them are so much greater than even a new car back in the day. You know that old saying, “They don’t make ’em like they used to”? Well, thank God for that!

But a $15,000 pre-owned car in today’s world? That’s a nice car!

— Dave

* Dave Ramsey is an eight-time national bestselling author, personal finance expert and host of The Ramsey Show. He has appeared on Good Morning America, CBS This Morning, Today, Fox News, CNN, Fox Business and many more. Since 1992, Dave has helped people take control of their money, build wealth and enhance their lives. He also serves as CEO for the company Ramsey Solutions.

Dear Dave,

I’m about to start paying off debt in Baby Step 2, but there’s a motorcycle loan my ex-girlfriend took out for me. I crashed the motorcycle and sustained some injuries. After two months of litigation, I received a settlement of about $15,000 that was just enough to cover the loan. Do I use the settlement money toward my debt snowball, or should I pay her back so I can get her out of my life for good?

Arnold

Dear Arnold,

Pay her back. Anything else would be unfair. And, on top of that, it’s just the right thing to do.

The whole move of her taking out a loan to buy you a motorcycle was kind of a dumb anyway. It was dumb on her part, and it was dumb on your part. And you can see why it was now, can’t you? It has left you in a lurch emotionally and relationally. We’re not talking about a random chunk of cash here. This money was for the motorcycle, from the motorcycle and about the motorcycle. So, you just pay her back, and that’ll clear things up.

I’m sorry the relationship didn’t work out, brother. But I’m glad you’re taking steps to be in control of your finances. And I hope making things right where the bike is concerned will bring you a little peace of mind.

— Dave

 * Dave Ramsey is an eight-time national bestselling author, personal finance expert and host of “The Ramsey Show.” He has appeared on “Good Morning America,” “CBS This Morning,” the “Today” show, Fox News, CNN, Fox Business and many more. Since 1992, Dave has helped people regain control of their money, build wealth, and enhance their lives. He also serves as CEO of Ramsey Solutions.