Dave Ramsey says: Government unlikely to take away investments

By Dave Ramsey

Published: Tue, Aug. 26, 2014, 12:00 a.m. MDT

 I think there’s less than a 1 percent chance they’d seize the actual assets.

I think there’s less than a 1 percent chance they’d seize the actual assets.

(Mackon, Getty Images/iStockphoto)

Dear Dave,

I have a 5-year-old daughter, and I want to start a 529 for her. However, I’m concerned that the government might seize the 529 assets in order to pay off debt and give people treasury bonds instead. Do you think this might happen?

— Barry

Dear Barry,

I think there’s less than a 1 percent chance they’d seize the actual assets. Really, I don’t believe they’re any more likely to come take investments away than they are to come take your home. I mean, we’re really talking about private property here. If you have $100,000 in a retirement fund, and they say they’re going to take that away from you, it’s like taking a person’s home. I just don’t see that happening.

The big question, I think, is this: Are they likely to take away some of the tax benefits — like the 529 plan’s ability to grow tax-free? As in, they just come in and say they’re making it all taxable to pay the bills they’ve accumulated up in Washington, D.C., from all their stupid behavior. That kind of thing actually could happen.

— Dave

Dear Dave,

I’m retired, and my husband plans to work for several more years. We have $130,000 in savings accounts, plus a rental property. The rental property has a $150,000 mortgage, but we have no other debt. Should we sell the rental and reinvest in the stock market?

— Barbara

Dear Barbara,

If I were in your shoes, I’d be investing in mutual funds and paying off the rental property as fast as possible. That would be my game plan.

When it comes to mutual funds, you shouldn’t be jumping in and out. The key is to find good ones with long track records of success and stability. Then, leave the money alone for several years and let it do its thing.

— Dave

Dear Dave,

Is it possible to settle the debt on a student loan?

— James

Dear James,

Sallie Mae student loans, or federally insured student loans, are insured by the government. Translation: The bank is going to still get paid 100 percent by the taxpayers because the government is guaranteeing the loan. They have no reason to settle with you.

They’re not going to settle with you on the principal amount or the interest, James. You might be able to talk them down on the collection fees. They jack those way up. But the original amount you borrow, plus the actual interest that hasn’t been paid, is guaranteed by the government. They’ll get it from one of you.

— Dave

Follow Dave on Twitter at DaveRamsey and on the Web at daveramsey.com.

1. george of the jungle
goshen, UT,
Aug. 26, 2014

With the dollar's buying power becoming less and less as the Fed Res floating the stock, There ain't no escape. What if the lone want equal buying power when they lone you money plus interest. If inflation is at 10% and interest is 5% and wages stay at 2%, How could you ever escape.

2. JustGordon
Cottonwood Heights, UT,
Aug. 26, 2014

There's been little if any inflation in the last 14 years, assertions or statements to the contrary are contrary to the facts.

The story about the confiscation of one's 401k assets has been a reoccurring theme on conservative talk shows for months. It is part of a plan to spread and increase public distrust of their government that has no basis in fact. By repeating relentlessly the same lies speculation has now become reality sadly of too many.

3. RedShirt
USS Enterprise, UT,
Aug. 26, 2014

To "JustGordon" you are living the lie.

The fact is that there has been quite a bit of inflation over the past 14 years.

14 years ago gas was about $1/gallon, now it is over $3/gallon.

Mil used to be less than $2/gallon, now it is around $3

Housing prices are higher.

Clothing costs are higher.

Most everything costs more now that it did 14 years ago.

Since you don't believe facts, I guess there isn't much point is directing you to "Current US Inflation Rates: 2004-2014" at US Inflation Calculator that uses government data to give us the Government's take on inflation over the past 10 years. (Hint, it has ranged between 1% and 4.1%.)