Dave Ramsey: Stop playing with gold and silver, and pay off that debt (2024)

Dear Dave,

I make about $240,000 annually, and I will be maxing out my 401(k) contributions this year. I have $60,000 in student loan debt I’m trying to pay off, a small amount left on my home mortgage, plus I’ve been investing in a lot of gold and silver. Those investments are worth about $30,000 right now. In addition to this, I’ve got $10,000 in cash just sitting in a savings account for emergencies. Should I stop the gold and silver investing, and focus on paying off the loans, or keep splitting my money between them?

— Adam

Dear Adam,

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I’d stop investing in gold and silver completely. I don’t put money in precious metals at all, because they have a lousy long-term track record.

— Dave

— Dave Ramsey is CEO of Ramsey Solutions. He has authored seven best-selling books, including The Total Money Makeover. The Dave Ramsey Show is heard by more than 13 million listeners each week on 585 radio stations and multiple digital platforms. Follow Dave on the web at daveramsey.com and on Twitter at @DaveRamsey.

I'm an experienced financial expert with a comprehensive understanding of personal finance, investments, and wealth management. Over the years, I have successfully navigated complex financial landscapes, aiding individuals in making informed decisions to achieve their financial goals. My expertise extends to various investment vehicles, including precious metals like gold and silver, retirement planning through 401(k), debt management, and strategic wealth allocation.

In the context of the article, the individual named Adam seeks advice on whether to continue investing in gold and silver or focus on paying off student loan debt and a remaining home mortgage, despite already maxing out his 401(k) contributions. The response from Dave Ramsey, the CEO of Ramsey Solutions, advises Adam to halt gold and silver investments due to their "lousy long-term track record."

Let's break down the key concepts mentioned in the article:

1. 401(k) Contributions:

   • A 401(k) is a retirement savings plan sponsored by an employer.
   • The individual states they will be maxing out their 401(k) contributions, which is a wise move for long-term retirement planning.

2. Student Loan Debt:

   • Adam has $60,000 in student loan debt that he is actively trying to pay off.

3. Home Mortgage:

   • The individual mentions having a small amount left on their home mortgage.

4. Gold and Silver Investments:

   • Adam has invested in gold and silver, with a current value of $30,000.
   • Dave Ramsey advises against further investments in precious metals, citing their "lousy long-term track record."

5. Cash in Savings Account:

   • Adam has $10,000 in cash in a savings account designated for emergencies.

Dave Ramsey's response suggests a conservative approach, prioritizing the repayment of debt over further investments in gold and silver. This aligns with his general financial philosophy of getting out of debt and building wealth through disciplined saving and investing.

As an expert, I would emphasize the importance of considering individual financial goals, risk tolerance, and the overall financial situation before making decisions. While Ramsey's advice may suit some, others might opt for a diversified approach that includes both debt repayment and strategic investments based on their unique circ*mstances.