Why does Dave Ramsey not invest in bonds?

Dave Ramsey avoids bonds because he believes they aren't as safe as commonly portrayed, citing volatility from interest rate changes, lower returns compared to stocks, and the superior long-term growth potential of diversified stock mutual funds for building wealth. He argues bonds offer minimal diversification benefits while sacrificing significant growth, preferring "growth stock mutual funds" for long-term wealth building, embodying his "boring tortoise" investment philosophy.

What does Dave Ramsey say about investing in bonds?

For starters, I don't buy bonds. Bonds are frequently pitched in the financial world as being much safer than the stock market, but actual data shows they're not that much safer. The bond market, in general, is almost as volatile as the stock market because of the way bond values respond to shifting interest rates.

Why doesn't Dave Ramsey recommend bonds?

Dave Ramsey avoids bonds because he believes they offer lower returns than stocks, aren't as safe as people think due to interest rate volatility, and don't effectively protect against inflation, preferring growth stock mutual funds for long-term wealth building and growth and income funds for stability, emphasizing that diversification should focus on equities, even for retirees, to beat inflation and build wealth. 

Why are bonds a bad investment now?

Tl;dr: Bonds are dangerous because they lose value if interest rates increase. Interest rates are at historically low levels, and cannot decrease a lot from today's levels. They can, however, increase a lot. When 30-year interest rates are below 3%, bonds have a long-term risk profile that is eerily similar to stocks.

Why doesn't Warren Buffett invest in bonds?

Warren Buffett dislikes long-term bonds because their low yields often fail to beat inflation, meaning the fixed payments lose purchasing power over time, making them poor value compared to stocks, which offer ownership in growing businesses and better long-term returns. He sees bonds as essentially lending money for diminishing returns, preferring to invest in companies or hold short-term, highly liquid cash (like T-bills) as a safer, more flexible alternative, especially in a rising rate environment where bond prices fall.
 

Dave Explains Why He Doesn't Recommend Bonds

Do millionaires invest in bonds?

High-net-worth individuals may invest in muni bonds because they provide steady income and tax benefits. For the ultra-wealthy, municipal bonds aren't just about earning interest. They're a way to lock in tax-free income, cover essential expenses, and free up the rest of their portfolio for higher-growth investments.

Why does Dave Ramsey say not to invest in gold?

Dave Ramsey advises against gold investing because it doesn't generate income (like dividends), relies on fear/greed for price movement, has a poor long-term return history, distracts from wealth-building assets (like stocks/real estate), and he believes its value is speculative rather than inherently productive, promoting a focus on debt elimination and growth investments. 

Are bonds expected to do well in 2025?

Yes, bonds are generally considered a good investment in 2025, offering attractive yields, stability as inflation cools, and potential for capital appreciation, especially with anticipated central bank rate cuts and higher starting yields than recent years, though navigating range-bound markets and sector-specific risks remains key for investors. Investors can find value in investment-grade corporate bonds, municipal bonds (munis) for tax advantages, and even higher-risk high-yield options, balancing income generation with portfolio diversification. 

How much is a $10,000 savings bond worth after 30 years?

A $10,000 savings bond matures and stops earning interest after 30 years, so its value after three decades is its final accumulated value, which depends on the specific series (like EE or I) and its issue date, but it will be worth significantly more than the face value, potentially doubling or more, especially for older bonds or if it hit a guaranteed double value point, with the exact amount found using the TreasuryDirect calculator. 

Which bond is paying 7.5% interest?

A bond paying 7.5% interest offers attractive returns, as seen with recent UK Belong Social Bonds issued in 2025, but these typically involve higher risk than savings accounts as they aren't FSCS-protected, requiring careful evaluation of the issuer's creditworthiness and comparing it to alternatives like high-yield funds or even potentially higher-yielding dividend stocks for risk-tolerant investors.
 

Is Dave Ramsey a Trump supporter?

He has blamed politics for what he considers Americans' economic dependence, and has said presidents should do "as little as possible" about the economy. Ramsey supported Donald Trump in the 2024 United States presidential election.

What is Dave Ramsey's 8% rule?

Dave Ramsey's 8% rule is a retirement withdrawal strategy suggesting retirees can safely take 8% of their portfolio's starting value annually, adjusted for inflation, by investing 100% in stocks, assuming high average market returns (around 12%). It's a controversial method, contrasting with the traditional 4% rule, as it relies heavily on consistent double-digit market gains and carries significant sequence of returns risk, meaning poor early market performance can deplete the fund faster, making it riskier than diversified approaches.
 

Is there a better investment than bonds?

Another difference is how they make money for you: Stocks must grow in resale value so you can sell them for more than you bought them, while bonds pay you fixed interest over time. Stocks also tend to generate more money as an investment than bonds.

Why does Dave Ramsey not recommend bonds?

Dave Ramsey avoids bonds because he believes they offer lower returns than stocks, aren't as safe as people think due to interest rate volatility, and don't effectively protect against inflation, preferring growth stock mutual funds for long-term wealth building and growth and income funds for stability, emphasizing that diversification should focus on equities, even for retirees, to beat inflation and build wealth. 

What does Warren Buffett recommend for bonds?

Warren Buffett's primary bond recommendation is to hold a small portion (around 10%) of a portfolio in short-term U.S. government bonds (T-bills), primarily as a stable cash cushion, while directing the bulk (90%) to low-cost S&P 500 index funds for long-term growth, a strategy outlined in his 2013 shareholder letter for his wife's inheritance. He favors short-term Treasuries for their safety and liquidity, viewing them as a secure place to park cash rather than a primary growth engine, especially when long-term bonds offer less compelling inflation-adjusted returns. 

What if I invest $1000 a month for 5 years?

Investing $1,000 per month for 5 years (totaling $60,000 invested) can grow significantly, potentially reaching around $77,000-$83,000 or more, depending on returns, with a 6-8% annual average return placing you in the $70,000 - $80,000+ range, achievable through diversified options like ETFs, mutual funds, or robo-advisors, often within IRAs for tax benefits.
 

What is better, a CD or a bond?

Neither bonds nor CDs are universally "better"; the best choice depends on your goals, as CDs offer guaranteed, FDIC-insured safety for short-term needs with early withdrawal penalties, while bonds provide potentially higher yields, regular income, more liquidity (though with market risk), and diversification for longer-term goals, with government bonds being very safe and corporate bonds carrying more risk.
 

Do bonds double in value after 20 years?

EE bonds you buy now have a fixed interest rate that you know when you buy the bond. That rate remains the same for at least the first 20 years. It may change after that for the last 10 of its 30 years. We guarantee that the value of your new EE bond at 20 years will be double what you paid for it.

What are the safest bonds to invest in?

Treasury securities are considered one of the safest investments because they are backed by the U.S. government. They're issued in different maturities, ranging from a few days to 30 years, allowing investors to choose the term that best fits their investment goals.

Why is Warren Buffett buying treasury bills?

Warren Buffett buys Treasury bills (T-bills) for their unparalleled safety and high liquidity, especially when stock market valuations are high, signaling a lack of attractive acquisition targets for Berkshire Hathaway, allowing him to earn significant interest while preserving capital, waiting for better investment opportunities. This strategy effectively parks huge amounts of cash in a "risk-free" asset that generates substantial, steady income, providing dry powder for future large deals. 

How to turn $5000 into $1 million?

Turning $5,000 into $1 million requires significant time, consistent investing, and compound interest, typically involving starting early with a disciplined strategy like investing in stocks/ETFs, making regular contributions (e.g., $500/month), and minimizing debt to reach this goal over decades, not overnight. Key steps include saving diligently, investing wisely in growth assets, maximizing returns through compounding, and potentially increasing earnings to accelerate the process. 

Why are bonds doing so poorly right now?

Longer dated bonds are falling because investors are worried that Fed under Trump will focus on cutting rates and let inflation rise unchecked. The only thing that will stop further declines in bond prices will be increased likelihood of recession, because recessions are inherently deflationary.

Why don't Warren Buffett buy gold?

Warren Buffett avoids investing in gold due to its lack of practical uses and inherent value. Buffett favors silver because it fulfills value investing principles, with its use in industrial and medical applications. Gold, largely used for jewelry, lacks the practical applications Buffett seeks in an investment.

What are the 4 funds Dave Ramsey recommends?

And to go one step further, we recommend dividing your mutual fund investments equally between four types of funds: growth and income, growth, aggressive growth, and international.

What percent of Americans are 100% debt free?

About 23% of Americans are 100% debt-free, according to recent Federal Reserve data, meaning they have zero debt across all categories like mortgages, student loans, and credit cards, though figures can vary slightly by source and definition, with younger adults (Gen Z) showing higher rates of debt freedom and older adults often carrying more, notes WalletHub, National Debt Relief, and the Urban Institute.