Author and personal finance personality Dave Ramsey believes in some basic principles when it comes to strategizing about being smart with money.
Among those is that it's important to understand it is possible you are already doing the right thing.
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One seeker of Ramsey's advice, who identified himself as Brett, wondered if he was on the correct track or if there was something more he should be doing with his money.
"Dear Dave," he wrote, according to KTAR News in Arizona. "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," Brett continued. "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?"
Ramsey viewed this as an example of a situation where the questioner was already in a good place. To his line of thinking, there was little reason to welcome the element of risk into the equation.
"Dear Brett," he wrote. "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."
Ramsey then got straight to the point about what the secret sauce may well be in the upcoming transaction.
"Here's the deal," he wrote. "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."
Ramsey then crunched the numbers, imagining a hypothetical situation where Brett would try an investment strategy to boost his cash amount.
"If you invested the money and made 10% rather than 4% over two months, let's say, that amounts to about a 3% difference," he wrote. "That’s nothing in your case."
"You're not within a couple thousand dollars of doing a deal at the moment," Ramsey added. "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?"
The radio host offered a last bit of advice.
"Just keep doing what you’ve been doing and park the money," Ramsey wrote. "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," he added. "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."
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