We Owe $145,000 To The IRS Because of Day Trading

Summary

Episode Overview

Title: We Owe $145,000 To The IRS Because of Day Trading
Podcast: The Ramsey Show Highlights
Date: April 13, 2026
Main Theme:
This episode features Dave Ramsey advising a caller whose family faces $145,000 in IRS debt stemming from her husband's day trading losses. The conversation explores the emotional impact of debt, lessons about financial involvement, the risks of day trading, and practical steps for starting over. Dave delivers tough love—and statistical realities—to warn listeners about the perils of speculative investing.

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Key Discussion Points & Insights

1. Caller’s Debt Situation (00:06–01:30)

• Total Debt:

  • $145,000 to the IRS (from day trading)
  • $100,000 on a home equity line
  • $50,000 on medical expenses & car payments

• Assets & Options:

  • Mortgage: $470,000
  • Current offer on home: $755,000
  • Selling the house would let them “clear the decks” but they're hesitant due to their four children.

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2. The Story Behind the Debt (01:01–02:46)

• Day Trading & Denial:

  • The husband got heavily involved in day trading, winning and losing rapidly.
  • As losses mounted, he turned to credit cards and failed to pay taxes on earlier gains.
  • The caller admits ignoring their finances, saying, “I am guilty of burying my head in the sand and not getting involved in our finances.” (01:08)

• Breaking the News & Fallout:

  • After a major health crisis, the husband confessed everything—clearing out savings and a 401(k).
  • The couple has been dealing with the aftermath for about three years.

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3. Financial Literacy & Family Stress (02:15–03:02)

• The caller admits to financial illiteracy, but is trying to learn, especially about taxes.
• Husband's current income: $180,000 base in sales, though recent years have been “tumultuous and very dry.”

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4. Should They Sell the House? (03:20–04:39)

• Dave on Selling for the Kids:

  • “You said we would do this except for the kids. I think you have to do it for the kids. The definition of your kids having a good life is not where they live. It's who their parents are and how they act.” (03:26)
  • The stress of debt is more damaging than moving—echoed by Dave’s own and co-host Ken’s childhood experiences.

• Practical Advice:

  • “Sell it and clean up the dadgum mess.”
  • With no more day trading or deception, the husband can use his income to rebuild.

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5. The Emotional Reset & A Cautionary Tale (04:43–08:05)

• Stress & Health:

  • Dave: “Do your own research tonight on how stress affects your physical health... If I had the chance to fix this... this is a reset. A reset with the idea, though, that we never do this again.” (04:44)

• Owning Mistakes:

  • Dave shares his own long-ago bankruptcy: “I get to own that the rest of my life. But I never did the things again that put me there again, ever again.” (05:18)
  • Rebuilding as a family, with full financial transparency going forward, is essential.

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6. The Truth About Day Trading (05:55–08:05)

• Staggering Statistic:

  • “If you day trade for 36 months, continuous, 97% of you lose money. That's how stupid that is... You wouldn't be the one guy that says, 'frogger, I got this.'” (06:29)

• Gambling Mentality:

  • “There is something about the arrogance and pridefulness that says, I've got the stock market figured out. If you hear someone say that, laugh at them. They are funny people. They are statistically stupid human beings.” (07:09)
  • Day trading has the same addictive feedback loop as gambling—“It's the same thing as DraftKings. Same crap.” (07:45)

• Memorable Analogy:

  • Dave compares day trading odds to crossing a street with a 97% chance of being hit by a car—nobody rational would take that risk.

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Notable Quotes & Memorable Moments

On Prioritizing Children Over Material Comfort

• Dave Ramsey [03:26]: “The definition of your kids having a good life is not where they live. It's who their parents are and how they act.”

On Financial Recovery Being a Reset

• Dave Ramsey [04:44]: “This is a reset. A reset with the idea, though, that we never do this again.”

• Dave Ramsey [05:18]: “I get to own that the rest of my life. But I also never did the things again that put me there, ever again. Again. Again. Never again.”

On The Dangers and Delusions of Day Trading

• Dave Ramsey [06:29]: “If you day trade for 36 months, continuous, 97% of you lose money. That's how stupid that is.”

• Dave Ramsey [07:09]: “If you hear someone say, 'I've got the stock market figured out,' laugh at them. They are funny people. They are statistically stupid human beings.”

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Important Timestamps

• 00:06–01:30 – Details of the caller’s debts and housing situation
• 01:01–02:46 – Story behind the debt; day trading and financial denial
• 03:20–04:39 – Dave’s advice on selling the house; focus on kids' well-being
• 04:43–05:55 – Emotional reset; lessons from Dave’s own bankruptcy
• 05:55–08:05 – Day trading risks; 97% loss rate; gambling analogy

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Summary

In under ten minutes, this episode delivers a vivid, sobering lesson on the real costs of unchecked risk—and the importance of facing financial problems head-on. Dave Ramsey combines empathy, directness, and data to urge listeners: prioritize your family’s well-being, reject quick fixes and speculation, and rebuild your life with knowledge and discipline. The 97% failure rate in day trading serves as a lasting warning—sometimes the smartest and bravest move is to accept reality, clean up the mess, and vow, “never again.”

Transcript

[Dave Ramsey]

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[Caller]

I'm calling to see what your advice would be on selling our family home. We've got four kids. In order to pay off a large amount of debt.

[Dave Ramsey]

Okay, and so how much is a large amount of debt?

[Caller]

So we owe 145 to the IRS. 145,000. And then we have 100,000 on our home equity line of credit, and then about almost 50,000 on medical expenses and car payments.

[Dave Ramsey]

And what's your home worth?

[Caller]

Our mortgage is for 470. And we have an offer currently that we just got for 755. So it would allow us basically to clear the decks and we start. But our hesitation is with just our kids.

[Dave Ramsey]

Where did all this debt come from?

[Caller]

So my husband was a primary breadwinner. I was home with our kids. And he got into day trading. And I am guilty of burying my head in the sand and not getting involved in our finances. So he made quite a. Quite a bit, lost it just as quick, and then turned to credit cards and then didn't pay taxes on the capital gains he made with the trading before losing it all.

[Dave Ramsey]

There's not capital gains on day trading. There's ordinary income on day trading. And there's also a loss you can take if you've lost money against that. Okay, do you really think you have the whole story? You know those free samples at the store that are up for grabs for anyone? Well, that's basically what's happening with your personal information. Online data broker sites collect stuff like your address, phone number, email, even your family's information and just post it online for anyone to grab. And that's why I use delete me. They remove your personal info from hundreds of data broker websites and keep it gone. So stop letting random websites treat your data like it's free samples. Get 20% off your annual [e-mail] Ramsey.

[Caller]

I'm not entirely financially literate. This is something that I'm trying to get more involved in just in the last couple of years. Taxes in particular.

[Dave Ramsey]

I mean, when did all this happen?

[Caller]

This happened about. Well, I think it was happening for quite some time. But again, I kind of was burying my head in the sand. And he just came to me three years ago. We had a major health crisis. And he said, you know, I got to come clean. We owe quite a bit of money. I cleared out our 401k. I cleared out all of our savings.

[Dave Ramsey]

Okay, so he's been. You've been limping along with us together for three years. With you. You having knowledge of it?

[Caller]

Yes, sir. Yeah. We've been married for almost 20 years, but we. Three years I've had knowledge of it.

[Dave Ramsey]

And what. What does he. What does he make a year?

[Caller]

He makes 180 as a base. But he's in. He's in sales. But it's been a tumultuous and very dry couple.

[Dave Ramsey]

And he's not. He's not day trading anymore.

[Caller]

Correct. Okay.

[Dave Ramsey]

Okay. So your question was interesting. You said we would do this except for the kids. I think you have to do it for the kids. You have to get your life back for the kids. The definition of your kids having a good life is not where they live. It's who their parents are and how they act.

[Caller]

Yeah.

[Dave Ramsey]

You live in a house that's way nicer than you grew up in. So do I. So does Ken. And we didn't die from that. And it didn't malform our character from that.

[Caller]

Yeah.

[Dave Ramsey]

So sell it and clean up the dadgum mess. If the problem has gone away, no more day trading and no more deceiving. And you guys are working together on this, then he takes his 180,000 and hopefully more, 250,000, and you guys work to rebuild your lives and buy another house someday. But in the meantime, I'm going to be free, baby. Set me free. And I think that. I think the stress level in the air of your home will go down and the children will benefit from that far more than they were having that particular set of bricks and mortar.

[Caller]

Okay. That's a good word. Yeah.

[Dave Ramsey]

Yeah. I'm just going to add. Just do your own research tonight on how stress affects your physical health. It's not just the mental and emotional. We forget what it does to the body. So I would just add if I had the chance to fix this. And I love the fact that he came forward three years ago. If you guys are on the same page now, I absolutely agree with Dave. This is a reset. A reset with the idea, though, that we never do this again. Yeah. I mean, he has to say, I lost our house. That's right. This is a day trading. I lost our home. That's how big a deal this is. Okay. By the way, I lost everything and went bankrupt because of my choices, not my wife's. All right. When we went bankrupt 30 plus years ago. All right. So that's. You know, and I get to own that the rest of my life. But I also never did the things again that put me there again, ever again. Again. Again. Never again. You see, I mean, you say, I, you know, I lost everything. I lost my home. We did not lose our home, but we all. The only reason was there was no equity in it. And so, So I survived the bankruptcy, but. And it wasn't that nice a house anyway. But the. Anyway, yeah, we, we just said, you know, we lost everything. We get the opportunity to start again fresh and clean. And in your case, that's the sale of a house. In our case, it was a bankruptcy and we're never going back here again. And we never went back there. And we. From that point forward, we never. I never bought anything that Sharon and I don't both agree to, investments or otherwise. And so. Yeah, so I think it's fair to say, just to outline for everybody, just to let you guys know out there, this is not a unique situation. Here's the numbers. And this is the most bizarre number I have almost ever heard in the investing world. If you day trade for 36 months, continuous 97% of you lose money. That's how stupid that is. I mean, if you said 97% of the time you walk across the street, you get hit by a car, you would not walk across that street under any circumstances. You wouldn't be the one guy that says, frogger, I got this. You wouldn't be that guy. You'd be going, no, those are not odds. I want to play. And there is something about the arrogance and pridefulness that says, I've got the stock market figured out. If you hear someone say that, laugh at them. They are funny people. They are statistically stupid human beings. 97% of you that day trade 36 months consecutively lose money. Now, you need to hear that because some of you get a little fishing story where you hit a lick and you go, oh, I made some money. And it's just like gambling in Vegas. Now I'm going to go back to the table, and the only part I'm going to remember is the time I won. I'm going to Forget about the 16 times I lost. And when you add it all up, you lost. That's how they build those nice hotels in Vegas. So true. And the same thing is true at day trading. You lost. Poor guy, Poor gal. What a horrible thing they're going through. But some of you people, man, you're sitting out there with Dave Ramsey doesn't understand. Listen, I understand. What I understand is why. What I don't understand is why you don't understand. 97. What other number do you have? This 97% of anything ever. That's not statistically significant. That's like a fact. You're going to lose money. Oh, my God. And it has the same trap that gambling does. Oh, it's the exact, same exact trap. Because it's got a feedback loop. It's the same thing as DraftKings. Same crap. Same exact thing. That's why the sports betting's gone through the roof. It's a feedback loop, a scarcity feedback loop. And you know our friend Michael that wrote Comfort Crime, Michael Easter, his second book, Easter, his second book, talks about that a lot. And he went into great depth study on that about the, the dopamine hits and, and how you just keep cycling back into this thing. You cycle back into this thing and it's. But, yeah, it's just pushing the same button and it's. But it always has at its core, this ridiculous arrogance that I can beat the house. It's just, it's arrogant. Beyond pride comes right before you. You have to sell your house because you lost everything. Wow. Pride comes right before the fall. Create your free every dollar budget today. The simplest way to budget for your life.