Should We Invest in Precious Metals?

Summary

Ramsey Everyday Millionaires Episode: Should We Invest in Precious Metals? Release Date: August 8, 2025

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Introduction

In this episode of Ramsey Everyday Millionaires, hosted by the Ramsey Network, the discussion centers around the merits and drawbacks of investing in precious metals versus more traditional investment avenues like mutual funds and real estate. Featuring insights from hosts Dave Ramsey and Candace from SmartVestor, listeners gain valuable perspectives on making informed investment decisions to build and preserve wealth.

Caller’s Dilemma: Precious Metals vs. Real Estate Investments

The episode opens with a caller presenting a common investment dilemma faced by many new investors:

Caller [00:21]: "...my husband wants to invest in precious metals like gold, and I want to invest in a beachfront property or a lake property we can use as a rental. So my question is, what do you [think] is the better investment at your stage?"

Expert Advice: The Superiority of Mutual Funds

Candace addresses the caller's concerns by recommending mutual funds over both precious metals and real estate investments at their current financial stage.

Candace [00:56]: "Neither one. Right now you need to just be doing your 401ks and Roth IRAs and some good growth stock mutual funds."

She elaborates on the benefits of mutual funds:

Candace [01:02]: "A mutual fund is 90 to 200 different stocks of America's best and brightest companies... over the last hundred years or so, the stock market has averaged a little over 11% per year in the group of stocks going up in value."

Candace emphasizes the importance of starting with mutual funds, especially for those apprehensive about the stock market:

Candace [04:20]: "Investing in the stock market... it's not unstable, and it's not even that risky when you learn how to do it properly."

Debunking Precious Metals as a Viable Investment

A significant portion of the discussion focuses on why precious metals, particularly gold, are not advisable investments compared to mutual funds.

Candace [03:30]: "Gold absolutely sucks. You're going to really screw up putting your money in gold... gold has a horrible track record. Over the last 70 years, gold has an average annual return of 2%."

She bluntly advises against investing in gold, highlighting its poor historical performance:

Candace [04:10]: "No, it's not an investment. It's a good way to lose your butt."

Overcoming Fear in Investing

Dave Ramsey joins the conversation to address the emotional barriers that prevent individuals from investing, particularly the fear of the unknown.

Dave Ramsey [04:55]: "There's fear of something I don't know how to do, but it's false evidence appearing real. F E A R."

He uses relatable analogies to illustrate how managing fear can lead to financial growth:

Dave Ramsey [05:10]: "It's kind of boring... just putting money in your 401k baby. It's kind of boring."

Actionable Steps for New Investors

Candace provides clear, actionable advice for listeners ready to transition from saving to investing:

Candace [01:35]: "I'd start putting 15% of my income into 401k's and Roth IRAs and good growth stock mutual funds."

She encourages seeking professional guidance to navigate the investment landscape:

Candace [05:00]: "I sit down with a Smartvestor Pro... they'll finish teaching you the lesson that I just started teaching you."

Conclusion: The Path to Wealth Building

The episode concludes with a reinforced message that disciplined investing in mutual funds and retirement accounts is the most reliable path to building substantial net worth.

Candace [05:35]: "...just got out of debt. So no, you're gonna be putting 15% of your income aside in good growth stock mutual funds. And that is the shortest direction to your first million to $5 million in net worth."

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Key Takeaways

1. Prioritize Mutual Funds: For those who are debt-free with an emergency fund, investing in mutual funds through 401(k)s and Roth IRAs is recommended over precious metals and real estate at the initial stages.

2. Avoid Precious Metals: Historical data indicates that gold and other precious metals have significantly underperformed compared to the stock market, making them poor investment choices.

3. Manage Investment Fear: Understanding and educating oneself about the stock market can mitigate unfounded fears, making investing a less daunting and more profitable endeavor.

4. Seek Professional Guidance: Engaging with investment professionals like SmartVestor Pros can provide the necessary education and support to make informed investment decisions.

Notable Quotes

• Candace [03:30]: "Gold absolutely sucks. You're going to really screw up putting your money in gold."
• Dave Ramsey [04:55]: "There's fear of something I don't know how to do, but it's false evidence appearing real. F E A R."
• Candace [05:35]: "...putting 15% of your income aside in good growth stock mutual funds. And that is the shortest direction to your first million to $5 million in net worth."

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For listeners seeking personalized investment advice, connecting with a SmartVestor Pro is encouraged through Ramsey Solutions' platform.

Transcript

[Caller]

Foreign.

[Dave Ramsey]

This episode is brought to you by SmartVestor. Connect with an investing pro near you at RamseySolutions.com SmartVestor Candace is in Washington.

[Candace]

D.C. hey, Candace, how are you?

[Caller]

I'm good. How are you?

[Candace]

Better than I deserve. What's up?

[Caller]

Hi. Okay, so my husband and I are, we have done all your steps. We are debt free. We have money in our emergency account, and now we are in the thinking of investing stage. And investing in like the stock market scares us because it's not a world we know nothing of anything about. So my husband wants to invest in precious metals like gold, and I want to invest in a, like a beachfront property or a lake property we can use as a rental. So my question is, what do you.

[Candace]

Think is the better investment at your stage? Neither one.

[Caller]

Okay.

[Candace]

Right now you need to just be doing your 401ks and Roth IRAs and some good growth stock mutual funds. And I know you said the stock market scares you and it scares you not because it's scary, but because you just don't know anything. So it's time to get into, it's time to learn and start learning a little bit about how a mutual fund works. What a mutual fund is is multiple people put money in it. That way they mutually fund it. That's where the name comes from. And what the fund buys tells you what kind of mutual fund it is. If they buy growth stocks with the money that people have mutually funded, then it's a growth stock mutual fund. And you hear people say that phrase a lot, I'm sure. And that's what we teach people. And what I personally have put Ken's, personally, our families have put our retirement into mutual funds. And a mutual fund is 90 to 200 different stocks of America's best and brightest companies. And so when you open up your mutual fund information brochure, you're going to see companies like Exxon or Apple or Home Depot or Coca Cola or McDonald's or something like that. And you're going to go, oh, 20 years from now, this great group of stocks is going to be worth a lot more than it is today. Because for the last hundred years or so, the stock market has averaged a little over 11% per year in the group of stocks going up in value. And so that's what I would do. If you're out of debt, you got your emergency fund. I'd start putting 15% of my income into 401 s and Roth IRAs and good growth stock mutual funds. I sit down with, with a Smartvestor Pro. You can find one that we [e-mail] we're not in the investment business, but these are the people that will help you do that and have the heart of a teacher. And they'll finish teaching you the lesson that I just started teaching you. Gold absolutely sucks. You're going to really screw up putting your money in gold. Your husband doesn't know anything about that either or, or he wouldn't be suggesting it. Gold has a horrible track record. Over the last 70 years, gold has an average annual return of 2%. You'd be better off putting your money in a freaking fruit jar. So no, just cause you've been watching too much reading too much crap on the Internet if you think gold is a good investment. No, it's not an investment. It's a good way to lose your butt. And so no, you don't need to do that. And no, you don't need a big beachfront rental that you're gonna borrow money to go do. You just got out of debt. So no, you're gonna be putting 15% of your income aside in good growth stock mutual funds. And that is the shortest direction to your first million to $5 million in net worth. I think that vice is a little fuzzy, Dave. I think you should clarify that a little bit. Just as a casual observer. Could you be any more clear? I don't think that's possible. Yeah, you know, I think it's fun to remember that when you're investing, when you do anything that's new, there's two kinds of fear. There's fear that is good for you. Don't touch a hot stove. Don't stand in front of an 18 wheeler that's coming at you at 80 miles an hour. That's fear that keeps you from getting hurt. Right? You need good fear. The other fear is fear of something I don't know how to do, but it's false evidence appearing real. F E A R And that's you holding the seat of your 5 year old while they learn to balance a bicycle for the first time. In their minds, they're getting ready to die. In your mind, they're going to be balancing and giggling within the next hour. And they will probably scrape a knee in the interim. And they will not die from it. Instead, they will have a life of freedom because they can now pedal and balance and learn something that they didn't know before. That's a good fear that you work your way through with knowledge and with practice. And that's investing and that's investing in the stock market. The stock market is not scary at all. It's not unstable, and it's not even that risky when you learn how to do it properly. Like we're talking about not buying single stocks or not day trading, not doing some stupid butt thing you heard on TikTok, just putting money in your 401k baby. It's kind of boring.

[Dave Ramsey]

Thanks for tuning in to Ramsey Everyday millionaires. Need help with your investments? Connect with a smartvestor [e-mail] smartvestor or click the link in the show notes. Ramsey Solutions is a paid non client promoter of participating pros. Learn [e-mail] SmartVestor.