I Lost Everything In Penny Stocks And Had To Move Back In With My Mom

Summary

Podcast Summary

Podcast: The Ramsey Show Highlights
Episode: I Lost Everything In Penny Stocks And Had To Move Back In With My Mom
Date: March 24, 2026
Hosts: Dave Ramsey, Rachel Cruze
Caller: Kevin

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Main Theme

This episode centers on Kevin, a 30-year-old manager who lost his savings investing in penny stocks and now lives with his wife at his mother's house. The discussion explores the real causes behind his financial struggles—risky investments, poor debt management, and lifestyle choices that do not match his income level. Hosts Dave Ramsey and Rachel Cruze guide Kevin toward practical, responsible steps to financial recovery, emphasizing living below your means and the dangers of “get rich quick” mentalities.

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Key Discussion Points & Insights

1. The Penny Stock Loss & Background

• Kevin’s Situation:

  • Saved $34,000 over years through disciplined work and scholarships.
  • Lost all savings in penny stocks based on a friend's suggestion.
  • Moved back in with his mother. His wife, who does not work, is unhappy about the situation.
  • He is employed as a manager at In-N-Out.

• Notable Quotes:

  • Kevin: “I spent most of my life saving up and getting ahead...I ended up losing everything in penny stocks that someone I knew suggested me to.” (00:06)

2. The Real Problem: Debt and Overspending

• Host Intervention:

  • Dave and Rachel probe deeper, revealing Kevin’s issue isn’t just the stock loss, but significant car debt ($50,000 in total for two vehicles).
  • Dave reframes the crisis: while the savings are gone, the recurring car payments are causing ongoing financial stress.

• Notable Quotes:

  • Dave Ramsey: “You have a debt problem, not a I lost money in penny stocks problem.” (02:15)
  • “We don’t blame this on the penny stock. We blame this on the fact you bought a bunch of crap like cars that you can’t afford to pay on an In-N-Out manager’s salary.” (02:22)

3. Actionable Advice: Simplify, Sell, Hustle

• Sell The Cars:

  • Dave instructs Kevin to sell both cars—eliminate unnecessary debts before any attempt at financial recovery.
  • Suggests buying modest vehicles—“get you two $5,000 cars” instead of hanging onto two heavily financed ones.

• Both Spouses Should Work:

  • Both hosts challenge Kevin’s view that only he should have a job, particularly since they don’t have children.
  • Rachel: “If you’re two well-bodied adults, both of you should be working, especially if you don’t have kids.” (08:09)

• Notable Quotes:

  • Dave Ramsey: “You don’t live in your mother’s house if you’re a believer in the nuclear house.” (04:28)
  • Rachel Cruze: “That’s a luxury to keep one spouse at home.” (08:25)

4. The Power of Boring Investing

• Against Speculative Investing:

  • Dave rewrites Kevin’s sense of risk: “If you read about financial stuff on TikTok, unless it’s us, it sucks. So no, you didn’t need to take a lot of risk.” (02:15)
  • Warns about get-rich-quick mentalities and false promises found online.

• The Real Path to Wealth:

  • Focus on stable, long-term investments—particularly mutual funds and 401(k)s.
  • Let compound growth work over decades, not days.

• Notable Quotes:

  • Dave Ramsey: “The number one wealth-building tool you have is your income. You have given that away to the car companies.” (05:45)
  • Rachel Cruze: “To build true wealth is very simple. You live on less than you make. You don’t go borrow money, you pay yourself…” (07:03)

• Compelling Example:

  • Rachel calculates: If Kevin put $1200/month (his car payment) into mutual funds from age 30 to 67 at a 12% return, he’d have $9.8 million at retirement. (06:35)

5. Shifting the Mindset

• Accountability Placement:

  • Dave tells Kevin to shift his shame: “You’re feeling 90% of your shame over the penny stocks and 10% of it on the cars. I want you to flip that…that’s doing more damage.” (07:31)

• Educational Resource:

  • Dave offers Kevin a copy of The Total Money Makeover and recommends following its "baby steps" to get out of debt and start building wealth.

6. Closing Reflections & Hard Truths

• Lifestyle Check:
  • Dave reminds Kevin: “You’re living like you’re making $200,000 a year and you’re not. And so you’re going to have to adjust your expectations of how this whole thing works.” (08:31)

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Memorable Quotes & Moments

| Timestamp | Speaker | Quote | |-----------|---------------|-------| | 00:06 | Kevin | “I spent most of my life saving up and getting ahead...I ended up losing everything in penny stocks.” | | 02:15 | Dave Ramsey | “You have a debt problem, not a I lost money in penny stocks problem.” | | 02:22 | Dave Ramsey | “We don’t blame this on the penny stock. We blame this on the fact you bought a bunch of crap like cars that you can’t afford…” | | 05:45 | Dave Ramsey | “The number one wealth-building tool that you have is your income. You have given that away to the car companies.” | | 06:35 | Rachel Cruze | “Instead of paying the car companies, you pay yourself that 12...you would have $9.8 million at 67.” | | 07:03 | Rachel Cruze | “To build true wealth is very simple. You live on less than you make. You don’t go borrow money, you pay yourself…” | | 07:31 | Dave Ramsey | “You’re feeling 90% of your shame over the penny stocks and 10% of it on the cars. I want you to flip that…” | | 08:09 | Rachel Cruze | “If you’re two well-bodied adults, both of you should be working, especially if you don’t have kids.” | | 08:31 | Dave Ramsey | “You’re living like you’re making $200,000 a year and you’re not.” |

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Timestamps for Key Segments

• 00:06: Kevin recounts his financial downfall via penny stocks
• 01:09: Explaining savings history & fast food career
• 02:15: Ramsey pivots focus from penny stocks to car debt
• 03:56: Breaking out $50,000 in car loans
• 04:47: Realizing both spouses need to work
• 05:45: Dave explains the real weapon for wealth-building—steady investment
• 06:35: Rachel illustrates the power of consistent investing versus debt
• 07:31: Dave reframes the shame: penny stocks vs. car debt
• 08:09: Universal advice: both adults should work; living on less than you make
• 08:31: “You’re living like you’re making $200k/year and you’re not.”

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Summary Table: Actions for Kevin

| Problem | Recommended Solution | Reasoning | |----------------------------|------------------------------------------|------------------------------------------------| | Lost savings in risky stocks| Stop risky investments & speculative advice | Most online “get rich” advice is hype | | Over-leveraged on car debt | Sell expensive cars, buy $5k cars | Car payments eat income; lower debt frees cash | | Only one spouse working | Both get jobs (no kids) | Double income means faster recovery | | No emergency fund/savings | Build surplus before investing | Avoid relying on debt when emergencies strike | | Craving quick wealth | Invest steadily in mutual funds/401k | Slow, compound growth is proven and safe |

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Overall Takeaway

Despite feeling crushed by the penny stock loss, Kevin’s real issue is overextending on lifestyle (cars) and not maximizing household income. The path forward: sell off liabilities, both spouses work, live beneath your means, and invest for the long term in boring, proven vehicles. As Dave says, “You’re living like you’re making $200,000 a year and you’re not. Adjust your expectations.” The podcast provides a roadmap grounded in discipline and practical steps for anyone in a similar bind—not just a cautionary tale about risky investing, but a blueprint for genuine financial resilience.

Transcript

[Dave Ramsey]

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[Kevin]

I'm 30 years old and I have made a few questionable investments that, you know, I spent most of my life saving up and getting ahead. I saved $34,000 over college and my early adulthood and long story short, I ended up losing everything in penny stocks that someone I knew suggested me to. And now I'm back at my mom's house with my wife and she's not too happy about it and I'm just trying to.

[Rachel Cruze]

Do you lose your house and everything?

[Kevin]

I was renting an apartment.

[Rachel Cruze]

Okay, gotcha. How old are you?

[Dave Ramsey]

Do you not have a job?

[Kevin]

I do, I do. I'm actually a manager at an In N Out. I don't know if you've ever been

[Rachel Cruze]

before, but we just got one here.

[Dave Ramsey]

I just moved into the neighborh, but the Flying Dutchman's corporate office is across the street. But anyway, so the. Wait a minute, you were a manager in and out when all this was happening?

[Kevin]

No, so I actually worked at. I had a full red scholarship through college and I worked at Wendy's and other like fast food joints and I saved up a bunch of money.

[Dave Ramsey]

$34,000. Yes, but you were not living on the $34,000 when you were doing all of this, you were living on your income, were you not?

[Kevin]

No, that was just my savings.

[Dave Ramsey]

Okay, my point is this. There's no reason that you're at your mother's if you didn't lose your job. You just lost your savings.

[Kevin]

Yeah, well, the thing is I have a bit of debt. I have a few different cars and I don't have really enough money to afford any kind of like, you know, anything food related or going out to have fun. And I kind of just figured, you know, the ultimate goal is to escape the lower class. And what I've read online is that you need to take a little bit of risk. I think I went the wrong way about that, but my goal is.

[Dave Ramsey]

Yeah, I think you read about it in the wrong place. If you read about financial stuff on TikTok, unless it's us, it sucks. So no, you didn't need to take a lot of risk. So here's the thing, honey, you have a debt problem, not a I lost money in penny stocks problem. If you weren't using your savings to live on, you already had a life. And then plus or minus savings is the penny stock thing. So we don't blame this on the penny stock. We blame this on the fact you bought a bunch of Crap like cars that you can't afford to pay on an in and out manager's salary.

[Kevin]

Right.

[Dave Ramsey]

I sell the cars.

[Kevin]

I could definitely. I could definitely sell. I could sell the cars for sure.

[Dave Ramsey]

Yeah, you should have before you move in with your mother.

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[Dave Ramsey]

Ramsey before you move in with your mother.

[Kevin]

Okay. And then would I just be ubering or do I get like a cheaper.

[Dave Ramsey]

I thought you had a job.

[Kevin]

Yeah, yeah, I. But I have to get to work.

[Dave Ramsey]

Yeah, but you get a $2,000 car, you said.

[Rachel Cruze]

Yeah, you said plural cars. How many cars do you have, Kevin?

[Kevin]

I have two cars.

[Rachel Cruze]

Okay. And they're both on payments?

[Kevin]

Yes.

[Dave Ramsey]

Ok, how much do you, how much do you owe on them?

[Kevin]

One of them I owe about 30,000. The other one I owe about 20.

[Dave Ramsey]

Okay, so you have $50,000 in car debt. And what is your income, sir?

[Kevin]

About 60 after tax.

[Dave Ramsey]

Okay. Does your wife work outside the home?

[Kevin]

No. Why? It's complicated. I think that she. I kind of am a big believer of the whole nuclear house, you know, so she takes care of.

[Dave Ramsey]

You don't live in your mother's house if you're a believer in the nuclear house.

[Kevin]

I think my mentality was that she could just help out.

[Rachel Cruze]

Do you have kids, Kevin?

[Kevin]

Make that sacrifice, Kevin.

[Rachel Cruze]

You guys gotta work. How old are y'?

[Dave Ramsey]

All?

[Kevin]

30. I'm 30 years old.

[Dave Ramsey]

Do you have children?

[Rachel Cruze]

We gotta start working.

[Dave Ramsey]

You have children?

[Kevin]

I do not have children.

[Dave Ramsey]

Okay, look, both of you get a job and both of you sell these dumb butt crazy cars and go get you a one bedroom apartment, get you two $5,000 cars and then you have $10,000 in car debt instead of $50,000 in car debt. That is your problem.

[Rachel Cruze]

And you do nothing.

[Dave Ramsey]

Penny stock and then do that. That's what's causing you to be in the lower class living in your mother' penny stocks.

[Kevin]

Okay, that definitely makes sense.

[Dave Ramsey]

You lost $50,000 on these cars. You lost $30,000 on the penny stocks.

[Kevin]

Yes, absolutely. For reference, I had seen it work. I'm Definitely not going to mess with it anymore. But I did have a question as someone with all your experience. If I'm not investing in like the riskier the penny stocks or call options or anything like that, do you have a investment like recommendation for when I build up?

[Rachel Cruze]

Yes, he does.

[Dave Ramsey]

So the number one wealth building tool that you have is your income. You have given that away to the car companies. And so in order to be able to be a real investor and become wealthy, like the wealthy do it, you have to put your income into investments. And it's not speculative and it's not high risk. And I put mine in basic growth stock mutual funds. Okay, I'm gonna send you a copy of the book, the total money makeover. 20 million people have read this book and it's helped them work the baby steps to get out of debt. Because when you're out of debt, then you're freed up to start doing long term investing.

[Rachel Cruze]

How much do you guys pay in car payments each month?

[Kevin]

I think about 1200.

[Rachel Cruze]

1200. Okay, so here's what's crazy. Here's the mindset, okay? Instead of paying the car companies, you pay yourself that 12 from age 30. Ready for this? From age 30 to where you are now to 67 years old at a 12% rate of return. If you just put this in good gross stock mutual funds and did nothing, not risky, paid yourself these car payments instead of the cards, you would have $9.8 million at 67.

[Dave Ramsey]

And that's not speculative and it's not risky.

[Rachel Cruze]

So that's it.

[Dave Ramsey]

That's what basic people do in a 401k?

[Rachel Cruze]

Yes. And the lie, Kevin, that you have in the back of your head, that's why you do these penny stocks, is a get rich quick mentality. To build true wealth is actually very simple. You live on less than you make. You don't go borrow money, you pay yourself. So you are investing, you are saving. You have an emergency fund. So when something comes up, you're not running to debt, you have the money saved, you invest, you're generous. So there's a plan which, yeah, the book TMMO told Money Makeover will help with that.

[Dave Ramsey]

I'll send you that to try to help you. So the summation of the overall call is this. You're feeling 90% of your shame over the penny stocks and 10% of it on the cars. I want you to flip that. I want 90% of your guilt or shame to be on the cars so you never do that again because that's doing more damage to you than the penny stocks did. And then the lesson you learn from the penny stocks is, you know, Abraham Lincoln said everything on the Internet's not true. Okay, so just.

[Rachel Cruze]

Did you read that on the Internet?

[Dave Ramsey]

Yeah, I read that on the Internet. So, I mean, this is, you know, so just got to know that most of the stuff on Tik Tok is a lie. Most of this stuff.

[Rachel Cruze]

And if you're too. Can I just say this too? Sorry. If you're too well, well bodied adults,

[Dave Ramsey]

both of you should be working.

[Rachel Cruze]

You should be working, especially if you don't have kids, right? And to get yourselves out of this mess and to get yourself on a financial playing field that you actually then have stability and then you can make choices of, hey, I want someone home. I don't. But right now, you guys don't have that luxury. That's a luxury to keep one spouse at home.

[Dave Ramsey]

You're living like you're making $200,000 a year and you're not. And so you're going to have to adjust your expectations of how this whole thing works. Create your free every dollar budget today. The simplest way to budget for your life.