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Dave Says - Dave Ramsey

Heal, learn, then invest

Dear Dave,

I went through a divorce a couple of months ago, and I’m not sure what to do next. I received custody of our kids, ages 13 and 15, plus I have a good job and I got the house in the settlement. It’s a nice, simple home, but it’s paid for and worth about $200,000. I receive $1,400 a month in child support, and I got $125,000, which was half our savings. I also have no other debt. Most of my friends are telling me I should begin investing, but they all have different ideas about where I should put the money. Can you give me some guidance?

– Michelle

Dear Michelle,

I’m so sorry to hear you’re going through this. Divorce is hard enough when it’s just a couple, but it must be incredibly difficult with kids involved. Make sure you spend lots of time hugging on them, and telling them how much you love them. God bless you guys.

OK, I know your friends are just trying to help, but I wouldn’t follow their financial advice right now. The trauma from your divorce is still fresh, and you should never make important, long-range decisions when your emotions are messed up. If there’s anything positive in all this, it’s that you’re in a really nice place where your finances are concerned. You’ve got a good job, you have no debt, and you’ve got six figures sitting in the bank.

My advice is to park that money in a CD until you feel you’re getting over the shock of what has happened. You won’t make much money doing this, but you won’t lose any, either. Then, after some time has passed, I want you to find a good financial adviser – one with the heart of a teacher – and look into investing $25,000 in good growth stock mutual funds. I’m talking about ones with at least a 10-year track record of success.

Time and knowledge can help erase fear, Michelle. Plus, you’ve got a responsibility to yourself and your kids to invest wisely.

– Dave

Follow Dave on Twitter (@DaveRamsey), or go to daveramsey.com.

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