Dave Says: Where Do I Put the Money?

Reader Question: I have a savings account for my two-year old that has $5,000 in it, and about half of that is in gold. I’m going to save for his college separately, and give this to him to help start his life after school. Is there a better place to put this other than a traditional savings account?

First of all, you should not invest in gold. Gold is a very volatile, very dangerous investment. I don’t have a dime invested in gold, and I would strongly suggest that you not invest in it, either. If you take a look at the life-long track record on gold it will scare you to death.

For the time being, you can leave it all in a traditional savings account. But if he’s not going to use it for many, many years you could move it into a conservative mutual fund. In fact, you started when he was at such young age, a nice, conservative mutual fund might be a really good idea.

When he gets a little older, he can start adding to it himself from the money he makes from odd jobs and chores and such. After 15 years or so, thanks to your foresight and his contributions, he’ll probably wind up with a pretty nice chunk of cash.

Dave Ramsey

Dave is the author of The New York Times best-selling book Financial Peace. He is also the host of the nationally syndicated The Dave Ramsey Show, and is a regular guest on television. All of his financial counseling is based on biblical truths. You can hear Dave from 9 a.m. to 11 a.m., weekdays online at www.daveramsey.com. Send your questions toaskdave@daveramsey.com. He resides with his wife Sharon and their three children, Denise, Rachel, and Daniel, in Nashville, Tennessee.

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