Dave Ramsey says he only has 3 investments – and doesn’t need stock tips from his golf buddy. Here’s what they are

Dave Ramsey, the renowned financial advisor and radio show host, has built a reputation for advocating straightforward and simple investment strategies.

Its philosophy is rooted in the belief that investors do not need complicated maneuvers and sophisticated assets to perform well.

“I don’t play individual stocks, I don’t play with gold, I don’t mess with Bitcoin, and I don’t need your broke golf buddy’s stock tip with an opinion,” he said in an off-screen rant during a episode of The Ramsey Show.

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To those who insist he “missed out” on better opportunities, Ramsey had a clear message: “I didn’t miss out on anything! I’ll put my net worth next to yours as you speak!

Instead of pursuing “legal” asset classes, the financial guru says his net worth, estimated at $200 million, is concentrated in just three investments. Here’s a closer look at his simplified portfolio.

Your business

Like many ultra-wealthy individuals, Ramsey’s business ventures are a major contributor to his immense net worth. By 2024, he estimates the business will generate about $300 million in revenue. Because it is a private company, it is difficult to confirm its valuation and how much Ramsey’s personal stake in the business is worth.

Commercial interests are responsible 41% of total wealth for those in the top 1%, according to the Federal Reserve’s Survey of Consumer Finances. In other words, starting or buying a successful business can be a great way to build wealth.

Fortunately, Americans are highly entrepreneurial. According to the US Chamber of Commerce, 5.5 million new businesses were registered in 2023 alone. Meanwhile, 93% of American workers face side hustles and 44% rely on income from their side hustles to cover bills and make ends meet, according to a recent Insuranks.com survey.

Getting involved in this entrepreneurial wave can be beneficial for your personal finances.

Debt-free properties

Ramsey is more passionate about real estate than any other asset class. He acquired his real estate license when he turned 18 and was a millionaire by age 26. However, a bankruptcy situation left him permanently wary of leverage.

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Ramsey now insists his vast real estate portfolio is wholly owned, with no mortgages attached.

Ramsey’s approach is unusual, but his fascination with real estate is understandable. The US residential real estate market is worth US$52 trillion in total, according to Zillow. This makes it a larger asset class than stocks, as the combined value of all public companies is approximately $50 trillion.

For most average American families, their primary residence is their largest asset, according to an analysis by the Pew Research Center. Like Ramsey, a whopping 39.3% of homeowners own their property without a mortgage, according to U.S. Census data.

However, with rising interest rates and home prices, it has become increasingly difficult for first-time homebuyers to purchase property without taking out a large, expensive mortgage. If you’re looking for exposure to this asset class without purchasing physical properties, consider a real estate investment trust like Equity Residential Properties Trust (EQR), which owns 299 properties comprised of 79,688 apartment units in America’s largest cities.

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Mutual Funds

Ramsey has frequently mentioned his preference for mutual funds that track the broader stock market. Instead of picking stocks, he believes a passive investment approach is better.

This theory has become increasingly popular. Passive investment strategies now have more assets under management than actively invested funds, according to Morningstar. The Vanguard S&P 500 ETF, a low-cost fund that simply tracks the S&P 500 index, has had a compound annual growth rate of 14.51% since 2010.

Adding some exposure to the stock market through index funds can be another way to accelerate your wealth creation journey.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.