Build Wealth in College?

(Gerd Altmann/Pixabay)

Dear Dave,

What advice do you have for college students who want to plan for the future and start building wealth? I’ll finish my master’s degree in marketing in less than two years, and I’ve been pretty lucky so far because my parents have paid for school. I bring in about $2,200 a month at my job, and I have $24,000 in savings.

Alex

Dear Alex,

If I were you, I’d get really good at the whole marketing thing. At this stage of the game, you are your best investment. You’re a go-getter, so just keep on going and getting it.

If you continue on this path, and by that I mean working, going to school, and piling up cash, you’re going to be able to put that marketing know-how to work in a big way. You’ll be able to use some of the cash you’ve got stored away to set yourself up in your new life. What you’re doing right now, in your situation, will give you a better return mathematically than a mutual fund.

Do you get what I’m saying? An education that is usable is more valuable to you at this stage of the game than investing. Now, when you finish school and start living life in your new career, good growth stock mutual funds are what I’d recommend for retirement. And at that point, if you’ve got an extra $30,000 or $40,000 sitting there, that’s even better.

Great start, Alex. Well done!

—Dave

Mandatory Withdrawal at 72?

Dear Dave,

I’ll be 72 in October, and I have a Roth IRA I haven’t done anything with in a while. I’ve got about $30,000 in it, and I believe I read where the government said there will be a mandatory withdrawal at age 72. If this is true, what should I do with that money?

Danny

Dear Danny,

I’m not positive there are mandatory withdrawals on a Roth IRA. I think that applies to traditional IRAs, but double-check with your investment advisor to make sure.

If it does apply to Roths, I’d take the required minimum distribution and move that amount to other investments. Or, since it’s only $30,000, if you’ve got another nest egg you plan to live on, you could just have some fun with the money.

In any case, talk to your investment professional before taking action. If he has the heart of a teacher and cares about your best interests, he’ll look at your overall financial situation and guide you in making the right decision.

—Dave

Dave Ramsey is CEO of Ramsey Solutions, host of The Dave Ramsey Show, and a best-selling author, including “The Total Money Makeover.” Follow Dave at DaveRamsey.com and on Twitter @DaveRamsey.