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Dave Ramsey gives blunt advice to Wisconsin woman who made $1.1M trading stocks -- why he tells her to change her strategy or risk losing everything

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  Published in Stocks and Investing on Monday, September 29th 2025 at 19:13 GMT by Moneywise
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Dave Ramsey Turns the Spotlight on a Wisconsin Stock‑Trading Success Story

When a woman in Wisconsin, who has built an impressive $11 million from stock trading, sought advice from the household name of personal‑finance coaching, the result was not a pat on the back but a hard‑edge warning. In a recent interview that appeared on MSN Money, Dave Ramsey—best known for his “Baby Steps” budgeting plan and “Financial Peace University”—advised the trader to “change her strategy or risk losing everything.” The conversation, which was spurred by a request for a phone call from the trader herself, offers a rare glimpse into what a seasoned financial guru thinks about high‑risk, high‑reward investing.

From Day‑Trader to Millionaire

The woman—whose name was withheld in the original piece—has been trading actively for nearly a decade. She began as a part‑time “research analyst” and, by the age of 30, had turned a modest brokerage account into an $11 million portfolio by riding market trends, using margin, and betting on short‑term movements. She told Ramsey that she had never set up a long‑term investment plan, had no “emergency fund” and that the bulk of her wealth was tied up in highly volatile, leveraged positions.

Her story is not unusual. According to a 2023 report cited in the MSN article, roughly one in ten active traders in the United States turns an average of 4–6% per month on margin. While those figures can sound impressive on paper, the risk of a “margin call” and a rapid collapse in a portfolio’s value is a well‑documented phenomenon. In the worst‑case scenario, a single unexpected market event can wipe out a trader’s entire equity.

Ramsey’s Blunt Take

Ramsey’s first reaction was to highlight the discrepancy between “speculation” and “investment.” “When you’re trading like that, you’re playing the market,” he told the trader. “You’re not growing a nest egg—you’re gambling.”

The most striking part of Ramsey’s counsel was his emphasis on the fragility of leveraged positions. “The next market downturn could drain your capital in days,” he warned. “You have to be prepared for that. It’s not just about how much you can make; it’s about how much you can lose.”

Ramsey also cited his own experience with the financial panic of 2008, pointing out that many of his clients were caught off‑guard by the sudden downturn. He urged the trader to adopt a more diversified portfolio: “Invest in low‑cost index funds, put a portion of your capital in bonds, and keep at least a six‑month emergency fund in a high‑yield savings account.” Ramsey’s own advice, outlined in his bestselling book The Total Money Makeover, has always emphasized liquidity and stability.

The “Baby Steps” Framework

Ramsey’s guidance also leaned heavily on his “Baby Steps” framework, which prioritizes debt elimination, savings accumulation, and then aggressive investment. The trader, who has been “living on margin,” has never, according to Ramsey, completed Step 1 (the $1,000 emergency fund). “You can’t play the market if you don’t have a safety net,” he stressed.

In an interview clip linked from the MSN article, Ramsey explains why the Baby Steps are critical even for high‑earning traders: “The market is unpredictable. If you don’t have a buffer, a single bad trade can cost you your home, your health, and your future. Step 1 is the foundation for all other steps.”

Ramsey also pointed out that her risk appetite was inconsistent with her life goals. “If you’re going to be a trader, you should be doing it on a separate account that’s only for discretionary spending, not for your retirement or essential expenses.” The suggestion was to move some of the trading capital into a tax‑advantaged account like a Roth IRA, where capital gains are tax‑free upon withdrawal.

A Call for Prudence and Education

Beyond the financial mechanics, Ramsey’s conversation touched on the trader’s psychological state. “You’re chasing returns,” he said. “You’ve never set a long‑term plan for how you’ll use that money. It’s not enough to know how to make money; you need to know how to protect it.” He urged her to attend one of his “Financial Peace University” sessions—an 8‑week class that teaches budgeting, credit, and long‑term planning—to create a comprehensive strategy that could survive a market crash.

The article also linked to a recent Forbes piece that details the rise of “day‑trading” and the pitfalls many novice traders face. It highlights how, despite the lure of high returns, over 90% of day‑traders lose money over the long haul. Ramsey’s caution is echoed throughout that piece.

A Reality Check for High‑Earners

Dave Ramsey’s frank talk with the Wisconsin trader serves as a sobering reminder that even significant wealth earned through the markets is not immune to risk. The conversation underscores a core principle of Ramsey’s teachings: You can’t rely on the market to pay your bills. You have to pay your bills first.

For the trader who is now facing a decision between maintaining her aggressive strategy or shifting to a more conservative, diversified approach, Ramsey’s message is clear. Either change course now, or risk losing the entire fortune she built through speculation.

As investors and traders read this article, the lesson is obvious: the allure of quick gains should never outweigh the fundamentals of risk management, emergency savings, and a well‑diversified portfolio. Whether you’re a seasoned trader or a budding investor, it’s a reminder that the smartest investment you can make is in a strategy that protects you as much as it grows your wealth.