I Made $1.1M Trading Stocks

Summary

The Ramsey Show Highlights

Episode: I Made $1.1M Trading Stocks
Date: September 2, 2025
Host(s): Ramsey Network Team
Featured Caller: Michelle (45, widow, single mom of 2)

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Episode Overview

This episode features a striking real-life financial story: Michelle, a 45-year-old widow and single mother, describes her unexpected journey in stock trading, turning $270,000 into $1.1 million over five years. Seeking guidance on what to do next with her winnings, she asks the Ramsey Network experts whether to keep her high-concentration portfolio or shift strategy. The hosts offer their signature, conservative investing advice while highlighting the risks of concentrated stock positions through honest analysis and memorable personal anecdotes.

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Key Discussion Points & Insights

1. Michelle's Financial Background & Stock Market Journey

• Michelle shares she's "doing well" financially—her only debt is her mortgage, set to be paid off within 10 months, and she maximizes Health Savings and retirement accounts.
• She invested $270,000 (life insurance money) when the stock market dropped at the start of COVID with guidance from friends; the portfolio is now $1.1 million ([00:06]–[01:02]).
  • Michelle: "Over the last five years, I've done a little investing. Not a ton, but some. I am at $1.1 million, so I’ve done really well." ([01:02])

2. The Dilemma: What Now?

• Michelle expresses anxiety after hitting the million-dollar mark; with $500,000 in unrealized gains, she's unsure if she should sell or keep going ([01:04]–[01:27]).
  • Michelle: "I kind of got nervous about it... what I should do with it." ([01:04])

3. Dave Ramsey's Core Investing Philosophy

• Host (A, likely Dave Ramsey) praises Michelle’s accomplishment, then cautions that her strategy isn't sustainable per research ([01:27]–[02:12]).
  • Host: "What you’ve pulled off—congratulations—is not sustainable. The research tells us... people who are day trading... 97% of them lose money within a year." ([01:27])
• Instead, Dave advocates for good growth stock mutual funds with wide diversification.

4. Understanding Michelle's Gains & Lack of Diversification

• The majority of her gains come from just four of her twenty stocks—one particularly notable stock is Palantir ([02:55]–[03:31]).
  • Michelle: "Probably most of that is within, like, four stocks that I’ve done really well on…Palantir...is a good portion of it." ([02:55])
  • Host: "20 stocks is not a well diversified portfolio. And four sure is. The devil isn’t. Diversification equals lowered risk." ([03:32])

5. The Risk of Concentration & Advocating for Diversification

• Host (A): Uses metaphors and anecdotes to illustrate the risks:
  • "Your risk is you’re the karate kid. You’re standing on one foot, hoping you can kick, instead of firmly planted on two with a solid base." ([03:32])
  • Explains how mutual funds spread the risk over 450–1,000 stocks rather than only a handful.
  • Emphasizes not over-focusing on a few companies: "You wake up every morning thinking about these companies more than they do." ([05:22])
• Dave analogizes her accomplishment to hitting on the roulette wheel:
  • "It’s akin to I hit on the roulette wheel and I’m up $200 bucks. So I’m walking away from the table and I’m leaving the casino while I’m up." ([05:24])

6. Practical Next Steps & Tax Implication Discussion

• Recommends that Michelle sell, pay capital gains taxes (estimated at $70–80K), and move funds into a diversified mutual fund portfolio ([05:50]–[06:36]).
  • "If it’s making 10% average, it’ll double every seven years. So seven years from now you’ll have $2 million… Just as steady as a rock… instead of you’re at the fair and you’re on the roller coaster..." ([05:56])

7. Anecdotes on Failing to Diversify

• Dave shares about counseling a woman whose $900,000 in one company's 401k stock dropped 38%, slashing her retirement savings because she lacked diversification ([06:37]–[08:53]).
  • "So as that company goes, so goes her future... That’s the kind of thing you’re facing. And diversification is a big basic financial principle… The Bible says...spread your portions to 7, yes to 8, for disaster may come upon the land. Spread it out. Money is like manure—spread out it grows; left in one pile, it stinks." ([08:14])

8. Wisdom on the Pace of Wealth Building

• Host (C): Highlights a proverb to drive home the principle:
  • "Wealth gained hastily will dwindle. Whoever gathers little by little will increase it." ([08:53])

9. Lighthearted Moments & Commentary

• Jokes about insider trading and Nancy Pelosi, making the advice relatable and fun:
  • "Unless you got a crystal ball or you’re Nancy Pelosi, I would not be betting on any single stocks." ([09:09])
  • “If you got four out of twenty answers on a test right, you would get an F.” ([09:42])

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Notable Quotes & Memorable Moments

• Michelle: "Over the last five years, I’ve done a little investing... I am at $1.1 million." ([01:02])
• Host (likely Dave Ramsey):
  • "20 stocks is not a well diversified portfolio. And four sure is. The devil isn’t." ([03:32])
  • "Your risk is you’re the karate kid. You’re standing on one foot, hoping you can kick." ([03:32])
  • "Money is like manure—spread out it grows; left in one pile, it stinks." ([08:53])
  • "So unless you got a crystal ball or you’re Nancy Pelosi, I would not be betting on any single stocks." ([09:09])

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Timestamps for Key Segments

• Michelle’s story & recent gains: [00:06]–[01:27]
• Initial host reaction & philosophy: [01:27]–[02:12]
• Details on stock composition & risks: [02:55]–[03:32]
• Metaphors and risk explanation: [03:32]–[05:24]
• Recommendation on what to do next: [05:24]–[06:36]
• Anecdote about lack of diversification: [06:37]–[08:53]
• Final wisdom, proverbs & playful banter: [08:53]–[09:42]

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Summary

While Michelle’s impressive success story is celebrated, the episode is a masterclass in financial prudence, using her case to reinforce timeless principles: diversify, avoid concentrated stock risks, and build wealth slowly and predictably. The hosts balance admiration for Michelle’s luck with strong guidance to shift to mutual funds, vividly illustrating that luck in picking stocks is not a reliable wealth strategy for most people. The tone is supportive, direct, and at times, humorously blunt, making complex advice accessible and memorable.

Transcript

[A]

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[B]

I'm 45 years old. I am single, widowed, mom of two. My kids are 12 and 15. I do well financially. I get Social Security. I put all my money away that I can for HSA and retirement and everything. So I'm doing well. My only debt is my mortgage, and I should pay that off in the next 10 months. I have 15,000 left on it. I have a 3% interest rate on it, so doing well. So my question is. Back at the start of COVID some friends told me I should invest money in the stock market because it had dropped. And they kind of helped me through it. I opened an account. I had some of my husband's life insurance money. I put into was about $270,000. And over the last five years, I've done a little investing. Not a ton, but some. I am at 1.1 million, so I've done really well.

[A]

Yeah, way to go.

[B]

Yeah. So I don't. I don't know. This year when I hit the million mark, I kind of got nervous about it. And I don't know if I should just keep going, if I should start to sell because I have over 500,000 in unrealized gains that, you know, could go. So I just. I don't know, kind of what I should do with it.

[A]

Okay, so. Well, what we teach and what I have done personally is I invest in good growth stock mutual funds. I don't buy and sell single stocks. And the reason I don't is the data tells us that over time, what you've pulled off. Congratulations. Is not sustainable. The research tells us that that's, you know, for instance, people. You're not doing this. But people who are day trading, they're buying and selling all during the day. 97% of them lose money within a year. Okay, so that's an example. Okay, that's people that think they can beat the system. Now, you have not been day trading, but you have been trading a little bit.

[B]

And I. So.

[A]

So where did. Where did these gains come from? Explain it to me.

[C]

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[A]

So where did these gains come from? Explain it to me.

[B]

So I have 20 stocks, and probably most of that is within, like, four stocks that I've done really well on. Like, and one of them is Palantir that I bought more recently. And that's a good portion of it. So it's kind of in four stocks. The rest are, you know, between 3 and 10,000 gains, which I'm not too worried about. I'm sure they'll continue to go up.

[C]

The majority of the money you made was from the four stocks, not the 20.

[A]

Yeah, well, she invested in 20, and four of them hit. Yeah. And the other 20. The other 16 have done okay, but not. They're not the.

[B]

They've done good.

[A]

Yeah. They're not the hockey stick, though. Up into the right. The rest of us is. Yeah. Okay, that makes sense. So here's the thing. 20 stocks is not a well diversified portfolio. And four sure is. The devil isn't. Diversification equals lowered risk. Diversification means to spread around. And your risk is you're the karate kid. You're standing on one foot, hoping you can kick. You follow me? Instead of firmly planted on two with a solid base. And so, you know you've done well. I don't. I'm not besmirching that, but I'm not going to recommend that you keep doing that or that anybody do that. I'm glad for you. I'm happy that you've made it. But again, the data. The data tells me that most likely you're not going to continue this trend. And so it would scare me if I woke up and half of my fortune was in four stocks. Because as those four companies go, so goes my fortune. And I want to be spread out more than that. So a typical growth stock mutual fund has 90 to 200 stocks in it. And if you're in four different categories of growth stock mutual funds, Growth growth and income, aggressive growth and international. That puts you in somewhere between 450 and 1000 different companies. And so it's all spread out. And so one or two companies going up or down does not change your life. It's the movement of the whole market that changes your life. When you're invested with a well diversified portfolio instead, you know, you wake up every morning thinking about these companies more than they do.

[B]

Mm.

[A]

You have to. I mean, it would stress me. And so you know, you called to ask, so what would I do? I would say thank you God that this happened. I've got this money and I'm going to make it safe now so it doesn't slip away from me. And so it's akin, it's akin to I hit on the roulette wheel and I'm up 200 bucks. So I'm walking away from the table and I'm leaving the casino while I'm up.

[C]

And you'll likely have maybe, I don't know, 70 or 80 grand in taxes you'll pay which out of 1.1 big whoop.

[A]

Yeah. So I would sit down with a smartvestor Pro, go to ramseysolutions.com, pick some good mutual funds and move this to a well diversified portfolio. And if it's making 10% average, it'll double every seven years. So seven years from now you'll have 2 million. 14 years from now you'll have 4 million. 21 years from now you'll have 8 million. Just as steady as rock just is so predictable. It's sickening. And instead of you're at the fair and you're on the roller coaster and then you got off and ran straight onto the tilt, a whirl and you're going to throw up.

[C]

I would not recommend that.

[A]

This is, I mean this, I'm again, I, I'm happy that you made some money. I'm a wee bit surprised that you made some money, but I'm happy you did. And just like if somebody says I went to Vegas and I made a million dollars, I put 275 on the roulette wheel and I made a million dollars. I'm happy for you. But I don't recommend that as a methodology to become wealthy because you'll end up with nothing. And yeah, I was counseling a in the early days, I was coaching a lady that had $900,000 in her company for 1K and she was 60 or she was 69 years old and it was a big time name brand company that anybody would know if I mentioned it. Household name. Okay. And a big big company, major stock. And they made some mistakes in some of their product launches and their stock went down 38% in two quarters. Whoa. So she was investing in their stock. 100% of her 401ks in company stock. Oh man, she had one stock. So as that company goes, so goes her future. So her almost million dollars went down by almost 400,000 in two months or in two quarters. And she came to me what do I do? And I'm like, I don't know what you do. We're not going to write it down. And then write it down. Then write it down. Hope when it comes up, I'm going to cut my losses and get out of Dodge. And so instead of a million dollars to work with, you know, we had 600,000 to work with. And because she wasn't diversified, but it was a name brand, predictable, experienced, boring company. Shouldn't have done that. But it, you know, and it hadn't done that. It had gone up all these years. But then about the time she needs it, she hits retirement age. Boom, this thing goes down the dad gum hole. And so that's the kind of thing you're facing. And diversification is a big basic financial principle. The first thing they teach you in financial planning. Spread. The Bible says it spread your portions to 7. Yes to 8. For disaster may come upon the land. Spread it out. Money is like manure spread out. It grows gross things left in one pile. It stinks.

[C]

I like that. And the slower you grow it, the more likely you are to actually keep it and replicate that. You know, Proverbs says, wealth gain hastily will dwindle. Whoever gathers, little by little will increase it. So unless you got a crystal ball or you're Nancy Pelosi, I would not be betting on any single stocks.

[A]

Whoa.

[C]

Sorry, Nance. She's been doing very well for herself.

[A]

Dropped it in there. Well, you just.

[C]

I wonder if she's. If Sarah's maybe for Michelle is friends with Nancy. Maybe that's who told her to get on these stocks years ago.

[A]

Somebody. Somebody helped her pick.

[C]

Somebody knew something.

[A]

Yeah, that's interesting. Yeah, I wouldn't accuse Michelle of that. Michelle seems like she's sweet lady. Just leave her alone. George, don't leave. Don't be abusing the customer.

[C]

Leave Michelle alone.

[A]

Don't be abusing the customer.

[C]

Well, see, now everyone else goes, well, if I just pick the right stocks, I can be like Michelle. That's the scary true.

[A]

If you pick the right stocks, you'd be like Michelle.

[C]

You go back in time.

[A]

That means four times out of 20 you hit. That's a pretty heavy failure rate. Four times out of 20 you hit. Think about it. The statistic. I mean, if you got four out of 20 answers on a test, right, you would get an F. Create your free every dollar budget today. The simplest way to budget for your life.