Should I Stop Day Trading?

Summary

Ramsey Everyday Millionaires: “Should I Stop Day Trading?”
Release Date: March 28, 2025

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Introduction

In the episode titled “Should I Stop Day Trading?” from the Ramsey Everyday Millionaires series, hosts from the Ramsey Network dive deep into the complexities of day trading, examining its viability as a wealth-building strategy. Featuring insights from Dave Ramsey, George Kamel, and callers, the discussion offers a candid exploration of the risks and rewards associated with day trading, especially for those seeking long-term financial stability.

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Caller’s Dilemma: The Allure and Risk of Day Trading

The episode begins with a caller reaching out for advice on day trading. At [00:19], George Kamel introduces the caller from Philadelphia, Pennsylvania, who shares his background:

Caller [00:19]: “I’m 26. I have a house that's paid off. Me and my fiancée have minimal to no debt... I started trading options about 5 years ago. Wasn't successful... recently, my account is sitting at $4,800 and $200. So I don't know if I should continue with the strategy that I'm using of trading options or do I move to a different strategy.”

The caller presents a scenario familiar to many aspiring investors: early enthusiasm in day trading followed by significant losses, prompting a reconsideration of their financial strategy.

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Dave Ramsey’s Candid Advice Against Day Trading

Dave Ramsey doesn’t mince words when addressing the caller’s predicament. At [01:15], he bluntly states:

Dave Ramsey [01:15]: “You’re not going to like what I tell you to do and you probably won't do it. I would tell you to stop day trading immediately and focus on long-term wealth building through your normal day job income.”

Ramsey emphasizes the importance of focusing on stable, long-term investment strategies over the high-risk nature of day trading. He probes further to understand the caller’s financial standing, revealing an annual income of approximately $85,000 to $90,000.

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The Stark Reality of Day Trading: Statistics and Personal Stories

At [02:06], Ramsey shares sobering statistics to underline the precarious nature of day trading:

Dave Ramsey [02:06]: “97% of day traders who persisted for more than 300 days lost money. And many people go borrow money to make trades, going into debt to leverage.”

He recounts heart-wrenching stories from the Ramsey Show, where individuals have lost substantial sums—ranging from $30,000 to $300,000—in their pursuit of day trading profits. This serves to illustrate the high failure rate and financial dangers associated with day trading.

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Emotional and Mental Toll of Day Trading

Ramsey touches upon the psychological strain that day trading can impose. At [03:33], he remarks:

Dave Ramsey [03:33]: “I just hate losing money. And so the easiest way to avoid that is to not gamble it.”

He highlights how day trading can lead to significant stress and anxiety, detracting from one’s overall financial peace. The constant monitoring of markets and the pressure to time trades can be mentally exhausting, making it harder to maintain a clear and focused investment strategy.

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Promoting Long-Term Investment Strategies

Conversely, Ramsey advocates for disciplined, long-term investment approaches. At [03:33], he advises:

Dave Ramsey [03:33]: “Instead of timing the market... have time in the market through compound growth and a long-term strategy. This is the tortoise beats the hare.”

He recommends investing in retirement plans, index funds, and taxable brokerage accounts as safer and more reliable methods for building wealth over time. Ramsey underscores the importance of patience and consistency, likening successful investing to the steady, winning tortoise in the classic fable.

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Side Conversation: Crypto Bar Anecdote

Mid-discussion, George Kamel brings up a lighter topic related to cryptocurrency. At [04:31], he mentions:

George Kamel [04:31]: “There is now a crypto bar in New York City.”

Dave Ramsey humorously responds:

Dave Ramsey [04:34]: “It's the worst place to meet a woman because you won't find one in there.”

This brief exchange serves as a side note, contrasting the high-stakes world of day trading with the emerging, often volatile realm of cryptocurrency, reinforcing Ramsey’s skepticism towards high-risk investment avenues.

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Conclusion: Steering Clear of High-Risk Trading

Wrapping up the discussion, Ramsey reiterates his stance against day trading. He emphasizes that the pursuit of quick financial gains often leads to greater losses and unnecessary stress. Instead, he champions a path of financial peace through steady, long-term investments and living within one’s means.

Key Takeaways:

• High Risk of Loss: Day trading has an overwhelmingly high failure rate, with 97% of traders losing money over time.
• Psychological Stress: The constant pressure and anxiety associated with day trading can detract from overall financial well-being.
• Long-Term Strategies: Investing in retirement plans and index funds offers a more reliable path to wealth accumulation.
• Financial Peace Over High Returns: Prioritizing stability and peace of mind is more beneficial than chasing volatile, short-term gains.

For listeners contemplating day trading, this episode serves as a crucial reminder to weigh the risks carefully and consider more sustainable investment strategies for long-term financial health.

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Notable Quotes with Timestamps

• Dave Ramsey [01:15]: “I would tell you to stop day trading immediately and focus on long-term wealth building through your normal day job income.”
• Dave Ramsey [02:06]: “97% of day traders who persisted for more than 300 days lost money.”
• Dave Ramsey [03:33]: “Instead of timing the market... have time in the market through compound growth and a long-term strategy. This is the tortoise beats the hare.”
• Dave Ramsey [04:34]: “It's the worst place to meet a woman because you won't find one in there.”

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This episode of Ramsey Everyday Millionaires effectively underscores the perils of day trading while providing actionable advice for building wealth through proven, long-term investment strategies. Whether you’re a novice investor or someone considering venturing into day trading, the insights shared offer valuable guidance toward achieving financial peace and stability.

Transcript

[Dave Ramsey]

This episode is brought to you by SmartVestor. Connect with an investing pro near you at RamseySolutions.com SmartVestor all right, Jordan's up.

[George Kamel]

Next in Philadelphia, Pennsylvania. Jordan, how can we help today?

[Caller]

So I'm 26. I have a house that's paid off. Me and my fiance have minimal to no debt, probably the maximum we have. I have around 1100. She has around like 14 to 1500 dollars in debt. I started trading options about 5 years ago. Wasn't successful. Sort of sat down for the past two years, three years researching, studying markets. You guys are king of investing. So I wanted to get your advice on it. I started about four or five weeks ago with $660 and my account is now sitting at $4,800 and $200. So I don't know if I should continue with the strategy that I'm using of trading options or do I move to a different strategy?

[Dave Ramsey]

Well, you've called the right show and the wrong show. You're not going to like what I tell you to do and you probably won't do it. I would tell you to stop day trading immediately and focus on long term wealth building through your normal day job income. Do you have a normal day job?

[Caller]

Yeah. So that's actually what got me back into trading because I started this current position I'm at, I work for 12 a week, so it gives me two to three days to day trade. I'm currently making 42, 35 an hour, I believe it is, or 3240.

[Dave Ramsey]

Okay, so you're making about 85 grand a year. If you're doing that 40 hours a week, you said you're doing 48 hours a week, so it's probably a little more than that.

[Caller]

Correct.

[Dave Ramsey]

Okay. And what makes you go, I need more? Clearly you're enjoying doing this and you haven't been burned by it yet, Correct? Okay, let me tell you that.

[Caller]

No, I, I have been burned the first two years. I want to say I've lost close to four to $5,000 within the first two years.

[Dave Ramsey]

Okay, so here's the stat, and you fell perfectly into it. 97% of day traders who persisted for more than 300 days lost money. And many people go borrow money to make trades, going into debt to leverage. Right. And we've taken some gut wrenching calls in the Ramsey show from people who have lost 30 grand, 150 grand, even $300,000 by day trading. And it breaks my heart. And here's the problem. It's easy to feel like you're the exception when you're winning.

[Caller]

Correct.

[Dave Ramsey]

And it's easy to go. Well, it's always going to be. I'm good at this. It's just gambling at the end of the day. And if you do your research, it's just researched gambling, which still has a lot of risk. And I'm, I'm with Dave Ramsey on this. I just hate losing money. And so the easiest way to avoid that is to not gamble it. And so what I do is I invest into retirement plans. If I want to invest outside of that, I would invest into an index fund and a taxable brokerage account and call it a day. And so I would focus on. Yeah, because I don't. Here's the problem. You're spending hours and hours of week staring at these screens trying to time the market. And instead the better thing to do is instead of timing the market is just have time in the market. Through compound growth and a long term strategy. This is the tortoise beats the hare. You've heard that.

[Caller]

I've heard that. I've also heard the whole gambling. It's short money gains. Don't get into it. You might win now, but you're gonna lose it all later.

[Dave Ramsey]

Yeah. And I don't think it's worth the mental calories. I don't think it's worth the stress, the anxiety, the risk. Our plan is all about peace. You've heard it. Financial peace. And so can I tell you how many times I've thought about my investments over the last six months? Zero. I go up, market's down. All right, I'm gonna go get a coffee. I just don't care because I'm investing for the long term. And if you're investing for a shorter term purchase, like real estate, just park it in an index fund, let it ride. That's what Dave does. And when he finds a good piece of property, he'll cash out enough to buy the property. But I would never encourage anyone to do single stocks or even a single crypto coin. And day trading falls squarely in that with even more because now it's a whole career you can make out of it of saying, I'm a day trader. And so, you know, I heard this. You're too smart to do this stuff.

[George Kamel]

You know, I heard on the news this morning, got to get your quick take on it.

[Dave Ramsey]

What's that?

[George Kamel]

There is now there is a crypto bar in New York City.

[Dave Ramsey]

Oh, I have heard about this.

[George Kamel]

Have you heard this?

[Dave Ramsey]

Yeah.

[George Kamel]

And I was thinking of you. I heard it. I was like, I wonder what George knows about this.

[Dave Ramsey]

So I guess I'll tell you. It's the worst place to meet a woman because you won't find one in there.

[George Kamel]

Yeah.

[Dave Ramsey]

And if you just want to hang out with other crypto.

[George Kamel]

Yeah. Stuart Varney was asking. This was on Fox Businesses too. Varney was asking the. The. His female co host who was talking about it. He's like, can you pay for your beer with crypto? And she's like, yeah. And she's like, you wouldn't know how to do it, you know? So I guess Stuart is not jumped on the crypto train, but. Very interesting.

[Dave Ramsey]

Yeah. A crypto bar. I've got a dark curiosity.

[George Kamel]

She said it's full of crypto enthusiasts.

[Dave Ramsey]

Oh, wow.

[George Kamel]

So there you go. So my point is, next time you're in New York doing media, I think you should buy that, do that for TikTok and Instagram. Just do a little drop in.

[Dave Ramsey]

Just see if anyone starts filming me saying, I saw George at a crypto bar.

[George Kamel]

Mm.

[Dave Ramsey]

Yeah.

[George Kamel]

Yeah, that could be fun.

[Dave Ramsey]

No, thank you.

[Caller]

All right.