Dave Ramsey’s Investing Advice

investing dave ramsey

Dave Ramsey is a popular radio host, national best-selling author and personal finance guru who has helped millions of Americans get out of debt. He is also a founder of Ramsey Solutions, a service that helps people budget and reduce debt. Recognized by GOBankingRates as a Top Money Expert, he has developed a set of simple rules that can help anyone find financial success.

One of the most important parts of his financial advice is to start with a fully funded emergency fund and invest 15% of your income in tax-advantaged retirement accounts. He also emphasizes the importance of seeking a professional advisor and avoids speculative investments like Bitcoin and Dogecoin. However, some of his investing advice leaves room for improvement.

Ramsey’s investing strategy is based around mutual funds. These are funds that pool together the money of many investors and then hire professionals to select individual stocks. They are a great way to diversify your investment portfolio, which can lower your risk and increase your potential for long-term returns.

Specifically, Ramsey recommends growth stock mutual funds. These funds invest in a broad range of industries and companies and are designed to grow at a faster rate than the overall market. He also recommends buying international funds, which help diversify the risk of your portfolio by investing in foreign companies.

Additionally, he advises people to invest in their employer-sponsored 401(k) if possible. This is a great way to take advantage of matching contributions and save on taxes. He also urges people to invest in low-turnover mutual funds if they can’t afford to max out their 401(k) contributions.

Finally, he advocates saving an extra $100 per month into a separate savings account for investing purposes. This can be a great way to build your wealth over time, especially if you can continue to contribute to it even after you reach the maximum contribution amount.

There are a few investment options that Dave Ramsey doesn’t recommend, including single stocks, bond mutual funds, ETFs, fixed annuities and whole life insurance. These investments tend to have high fees and charges, which can make them less profitable than their more disciplined counterparts.