I am told not to lend money to friends. But some might argue that the old adage doesn’t apply enough. management your money.
in episode of ramsay shaw, Co-hosts Dr John Deloney and Jade Warshaw came across a shocking example of this.
Jeannie, a 58-year-old nurse and single mother of three adult sons, described her situation by phone as a “very, very, very, big, big problem.”
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The White Plains, New York, resident revealed that she had a “trusted friend” who was “monitoring” her money, but that friend wasted $400,000 in fraudulent transactions through a brokerage firm. The debacle then forced Jeannie to tap an additional $200,000 from her retirement savings. Then her friend went and lost that money too, leaving her with a $600,000 deficit.
That was enough to leave the co-hosts speechless for a while. So what exactly happened? According to Jeannie, it ended up being day trading.
“Your friend is a criminal,” Deloney said. “He stole from you, he stole from you.”
“It’s a scam,” Warshaw added.
Here’s what the co-hosts suggested to Jeannie to start taking action immediately to recoup her losses.
It’s time to start investing
When large financial losses started piling up, Jeannie said her friend covered it up by making false statements saying otherwise. She had no idea what was really going on until she got a big shock on December 18th, just her week before Christmas.
But it’s not all bad news for Genie. As a nurse she earns a salary of $80,000, but her side job allows her to earn an additional $4,000 a month. She has no other outstanding debts and she managed to save $8,000. emergency fund.
In addition, she owns a home with $400,000 in equity and a mortgage of about $200,000. When Jeannie asked if she should consider selling her home to cover damages from the $600,000 loss, both co-hosts answered a resounding “no.”
Deloney and Warshaw argued that catching up would be difficult for Genie, but possible.
But after evaluating Genie’s profit margins after expenses (a healthy $5,000 per month), Warshaw said his top priorities were: investment. She suggested Jeannie invest her 15% of her monthly income for herself. 401k. “We’re taking old-fashioned baby steps here,” she said, crunching some numbers on a compound interest calculator.
“If you start with zero dollars and invest for 10 years… [adding] $5,000 a month, that means you can get $1 million [in a decade]” Warshaw said. “You can do it. You can do it.” [even] You are working like a wild woman now and should do more. ”
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Maintaining “clear eyes” while collecting money
However, Deloney quickly warns Jeannie, “Don’t let yourself go to the grave as punishment for something you think you did wrong.”
He added that Genie needs to keep “clear eyes” and put aside any remaining anger, anger or self-loathing. She added that this is essential for her to get her money back.
This is the same advice host Dave Ramsey would give if he were on this episode. Mr. Ramsay has made no secret of the spiritual principles underlying his financial planning.
Deloney also asked poignant questions: “Have you forgiven Genie yet?” You must. Because unless you do that, you’re not going anywhere. You’re going to sit in the middle of this. ”
To drive home the point, Deloney added: “Our culture has a way of dealing with when a friend stabs you in the back. We don’t have good psychology when a friend stabs you directly in the face. And that’s what happened to you.” ”
Jeannie said she has already filed a complaint against her friend with White Plains authorities, but there is no way to know how long the process will take or whether the man will even face prison time.
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