Cash Out Our Silver To Fund College?

If your private student loans are in default, you're not out of options. Go to whyrefi.com slash Ramsey. I have a situation. My daughter is getting ready to graduate from high school. She has an educational IRA that grandparents have been giving her money ever since she was a baby. So we have that. We have about $30,000 in that. She was also gifted some about $15,000 about four years ago. I'm not exactly sure when, but her dad encouraged her to take some of that money and invest it in silver. He is under the impression that it is going to go to $300 an ounce. What kind of insider knowledge does he have? I think only God himself knows that I keep asking those questions. It's maybe conspiracy theory type stuff. He is very confident in his assertions. Hence, my struggle with trying to get her to say, yeah, you probably have made some money recently in silver, but it's time to pull it out and put it into something less volatile. Take advantage of what you've earned and put it into something that you're not going to lose on. He wants her to hold onto it for the big win. It could also be the big lose. So I'm so sad. I would be sad for her to lose any gains that she's had. I'm not confident in going up against all his knowledge and trying to advise her. I wouldn't call it knowledge. I think that's a very generous word you used for his confidence. I may be hearing something and I may not. Are you two married? We're in the middle of divorce. Okay. The way you were talking about it. Okay. That makes sense. Number one. And so that makes this trickier because now it's a splintered situation. Who knows what she's feeling? I don't know if she's taking sides. So this is a little trickier, George. Yeah. There was a lot of emotion and baggage behind it because if she takes his side, it feels like, oh, you're choosing now one parent over the other. Because you have different advice and because you're not the quote unquote financial guru, you feel like you don't even have a voice in this conversation. Right? Yes. Which I'm going to go out on a limb here. Part of all of this is probably why this marriage is being dissolved. And so there's some really hard conversations you're going to have with your daughter where you're not going to make him look bad, but you're going to share a different perspective and do it in a calm way that isn't conspiratorial or fear-mongering, which is probably what she's hearing right now. Yes. So how old is she, you said? She's 18. Okay. She's 18 years old. And how much does she have total? Is it 15,000 total? And she purchased some silver out of that? Yes. Okay. So how much silver does she actually have? I asked her that and she's not exactly sure. Her dad told her that it may be up to 30,000 right now, but he's given her the impression that that's a static number. You've got that and it's only on paper kind of thing. So I'm not sure of her original investment. I'm not sure what her actual numbers are. And this is physical silver that was purchased? Yes. Okay. Well, I can tell you the less stressful way to go about this is to just park that money in a tax advantage retirement account or even non-retirement account. It really doesn't matter. But the idea here is if this was working for her in the stock market from the age of 18 to let's say 58, all right, let's give it a 40 year run. And let's say she did all 15,000 over there. Is that fair as well? Teen, but okay. Let's call it 10? Yeah. Okay. $10,000, 18 to 58. She never adds another dollar. Do you understand that she just parks 10K, lets it grow in the stock market? Yeah. At a 10% rate of return, which they're going to come at me. That's just the data. If you look back in fact, from 1950 to now, it's more like 11.8%. So if you just let it ride, she'd have over half a million dollars. Yeah. And that's without her worrying about it, without her losing her physical silver, without worrying about what the economy is doing. And the truth is silver and gold have gone up in value in times where the economy is shaky and they go back down in value as the stock market picks back up. But over time, if you actually look at the full picture, you will see the stock market has far outperformed any of these commodities and assets. So I'm on team Jackie. I don't know how to convince your husband in the middle of that or convince your daughter while going through all of this, but the truth is nothing is urgent. What did you- She does have school, like she's got college to pay for. So is that- So this is her college money that I- Will this pay for her school completely? Depends on what school she goes to. Well, so you've given us a lot of variables. How can we help you the most now that we got a full picture? Is there something we didn't address? No, what you're saying is if we do cash it out, which is what I want her to do. So I'm going to, you think that's a good idea, take the whatever gains. And so you're saying it should be put in like another IRA or because she's going to need to take it out in a year or so. Well, in that case, I would just cash it out and leave it in a high yield savings account so that it's liquid for her to pay for college. Because what's going to happen is she's going to go deeply into debt for college because I guarantee you, unless she goes to the community college down the road, 10K ain't getting you very far. That's right. Yeah, yeah. And there's no other money you're saying? No, she has 30,000 in an educational IRA. She has 30,000 educational and then this silver money is on top of it. Got it. So that's an education savings account, ESA, is that what you're talking about? Okay, so that might get her through one year potentially, depending where she goes, but we got to think about the next three. And so that's where, I mean, let's keep it liquid. I don't think you're going to see a lot of growth in the next one year, two year, three year. In fact, that money could go down. So you want to keep it more liquid because we need this for short-term goals. And I would just add this, Jackie, she's 18 years old. You already know there's very little control you have over a lot of the things she's doing now, what she will be doing when she goes to college. You've got an ex, soon to be ex-husband who is going to be telling her, hold it because I'm brilliant and I know this is going to pay off. And then you're given the exact opposite advice. So I'm just trying to encourage you as her mother. This is not about winning the argument. I think you just have to say, can I give you another school of thought and do what George did with you? Show her how that money should be used in your opinion and you got to let it ride because you're just in a tough situation where you got two parents. She's the one that's the victim in this deal. And so we don't know the dynamics of who she's choosing, what she's feeling, who does she listen to more on money? Does she listen to her dad or you? So there's so much there. I'm just trying to make what is already a very tough situation for you. Hopefully as stress-free as possible that you got to explain it and let it go. That's all you can do. You know what I'm saying, George? And hearing that she's needing to go to college and pay for it. I go, that's not an argument about where to invest this money. We need to invest in her right now, in her current education, not what could happen in the future. If she does this right and graduates debt-free, we're not going to have to worry about her investing for the future. She'll be just fine. That's exactly right. I want to stay where you were, where you just gave such a really nice little masterclass on what $10,000 one time turns into over a half a million dollars. I don't think the average family with parents are saying, you know what? I may be struggling with debt. I may be trying to get out of this, but I've got a 15-year-old or 14-year-old, and if I can start telling them this now and they go get just a summer job at 15, 16, 17. It's not as difficult as we might think for a young person to come up with 10 grand over the course of three or four summers, right? Well, investing in general has been democratized in the last even decade to where now it's easy to open a Roth IRA. Any child is actually excited about it because they saw TikTok about it. Financial literacy is all around you. The problem is there's so much noise that no one ends up doing any of it. They just go, that's a cool, I'm going to save that for later, and yet no one's investing. If you can convince your kid that it's the old, what is it? The marshmallow test. You give a kid, hey, you can have one marshmallow now or you can have two in an hour. Most of the kids are going to go, I'll take the marshmallow right now. And what this is, it's a lesson in delayed gratification. And at 15, your brain can't fully comprehend that. You want to go to the mall with your friends. You don't want to park it in a retirement account. But you use our investment calculator at ransysolutions.com, they're going to go, hold on, mom, I'm confused. 10,000 turned into 500,000? Explain that to me. Now you've got an end to talk about compound growth and the power of delayed gratification. Get in that calculator at ransysolutions.com and punch in different numbers. I did this the other day, George, you've been very happy with my son. So proud of you. My son, Chase, and one of his buddies, we were talking about it. I said, all right, let me get my laptop out. So I go downstairs, bring it back up. And I said, all right, guys, give me some numbers. I have to explain it. They were losing their mind. They thought you were a mathematical genius. No, no, no. They just saw that and they were like, that's real. Versus me telling them versus showing them. It's good stuff. Calculator can't lie. YREFI refinances defaulted private student loans for struggling borrowers. Learn more at Y-R-E-F-Y dot com slash Ramsey.