Personal finance expert Dave Ramsey has given some advice on what to do with bitcoin investments. While acknowledging that the cryptocurrency has had a â€œfabulousâ€ run, Ramsey still prefers putting his money in more â€œprovenâ€ investments.
Dave Ramsey Still Not a Fan of Bitcoin
Famous radio show host and best-selling author Dave Ramsey gave some advice about bitcoin on The Dave Ramsey Show last week.
The self-proclaimed personal money management expert, Ramsey calls himself â€œAmericaâ€™s trusted voice on money.â€ He is the author of seven best-selling books: Financial Peace, More Than Enough, The Total Money Makeover, EntreLeadership, Dave Ramseyâ€™s Complete Guide to Money, The Legacy Journey, and Smart Money Smart Kids. Altogether, they have sold more than 11 million copies.
Ray from Louisville, Kentucky, called into The Dave Ramsey Show to ask for advice about his bitcoin investment. â€œIn late 2019, my income roughly tripled,â€ he began telling his story. â€œAnd in 2020, I got real aggressive with paying off debt and I was able to clear off a motorcycle debt, all credit cards, and the last two items are now a house and a car.â€ He also bought BTC last year. â€œI bought bitcoin, and itâ€™s ballooned into this huge account now, worth roughly a hundred thousand dollars.â€
He added: â€œOne of the things I want to do with it is obviously pay off the car but itâ€™s not quite enough to pay off the house, so I guess my question is do I wait with this volatile asset or do I sell it and move into something more traditional?â€ While noting that over the course of 2020, his BTC investment rose 649% and â€œthe expectations are that it could go even higher,â€ he said bitcoin â€œis a volatile assetâ€ that â€œswings now every day.â€ He admitted: â€œIâ€™m just nervous about keeping this large amount of cash in this volatile asset but still having to worry about a house that Iâ€™d like to pay off in the meantime.â€
Ramsey commented: â€œYouâ€™ve got Vegas problems, man. I mean you walked up to the slot machine, put a quarter in and it dumped a bunch of quarters out and now you have this temptation to think thatâ€™s a plan.â€ The financial guru added that this is â€œthe problem with anything that is extremely volatile,â€ emphasizing that the investment is â€œunpredictable.â€
The personal finance expert proceeded to tell Ray what he would do if he were in the same situation with a bitcoin account that had appreciated to $100K:
Ray tried to justify his bitcoin investment decision. â€œIâ€™m single. I felt I could afford to take the risk. I had a snowball plan for all the other items,â€ he said.
Ramsey responded: â€œYou can do whatever you want to do. But, youâ€™re asking me what I would do. I wouldnâ€™t have been in it the first place and I wouldnâ€™t stay in it. I would cash it out tomorrow, and I would put the money in some commonsense things.â€
He also pointed out: â€œYouâ€™re sitting here explaining to me all the problems with the investment. You already know what you need to do. You just want somebody else to say it out loud.â€ The finance guru concluded:
â€œBuying gold, or buying commodities, or buying bitcoin, or buying currencies, I mean, thereâ€™re a lot of volatile [assets]. You can do options. You can be selling short on the market. You can be day trading. Thereâ€™re all kinds of things you can do and occasionally make money at it, and most of the time end up losing it â€¦ bitcoin is in that category. Itâ€™s a high-risk play,â€ Ramsey described.
He further explained, â€œBitcoinâ€™s had a fabulous run in the last year but that doesnâ€™t mean itâ€™s an investment you need to do.â€ Similarly, â€œGold had a fabulous run for a while there but that doesnâ€™t mean itâ€™s an investment you need to do. These commodity plays and currency plays are just dangerous,â€ he opined.
In conclusion, while emphasizing to Ray, â€œYou do what you want to do,â€ Ramsey noted:
Ramsey has long been a bitcoin skeptic. In December last year, he gave similar advice to another BTC investor who turned his $1,500 bitcoin investment into $120K. At the time, Ramsey doubted that the bitcoins could be cashed out, calling the cryptocurrency â€œfunny money.â€
What do you think about Dave Ramseyâ€™s bitcoin advice? Let us know in the comments section below.
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