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5 Reasons Dave Ramsey And His Team Say Gold Is a Terrible Investment

Gold may not be the safe bet many believe it is.

By Adam Palasciano , Edited by Jennifer Vermeer

Updated Oct. 26, 2026

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In times of economic uncertainty, many investors turn to gold as a perceived safe haven. However, financial expert Dave Ramsey and his team, Ramsey Solutions, advise against this strategy. They argue that gold is not a reliable investment for building wealth due to its lack of income generation and historical performance. Instead, they recommend more stable and productive investment options if you're looking to start investing.

Let's explore the reasons behind their stance on gold and consider alternative strategies for long-term financial growth.

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1. Gold doesn't generate income

Ramsey Solutions emphasizes that gold does not produce any income, such as dividends or interest, making it less ideal for long-term wealth building. Unlike stocks or bonds, which can provide regular income streams, gold's value is solely dependent on market price fluctuations. Ramsey said, "Commodities are always going up and down, up and down. It's got a poor rate of return, and there's nothing that drives the price except for people's fear or greed."

This lack of income generation means investors rely entirely on the hope that gold's price will increase over time, which is not guaranteed.

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2. Gold is highly volatile

According to Ramsey Solutions, gold prices can fluctuate significantly due to economic uncertainty, investor sentiment, and changes in supply and demand.

Although gold is often viewed as a safe-haven investment, its price can still experience substantial swings during periods of market turmoil. Ramsey Solutions cautions that this unpredictability makes precious metals less appealing for investors focused on long-term wealth building.

3. Gold isn't a reliable inflation hedge

While gold is often promoted as a hedge against inflation, Ramsey Solutions argues that it doesn't consistently protect investors from rising prices.

Gold may maintain or increase its value during certain inflationary periods, but its price doesn't always move in step with inflation. Ramsey Solutions instead favors growth stock mutual funds for investors seeking long-term returns that can outpace increases in the cost of living.

4. Gold has a lousy long-term track record

According to Ramsey Solutions, gold has a poor long-term performance record compared to other investments. It points out that gold has yielded lower returns than mutual and index funds.

This underperformance makes it a less attractive option for investors aiming for substantial wealth accumulation. Focus on investments with a history of strong, consistent returns instead.

5. The dollar isn't backed by gold anymore

The U.S. dollar is no longer backed by gold, following the end of dollar-to-gold convertibility in 1971. However, that historical change doesn't necessarily mean gold has lost its value as an investment.

Ramsey Solutions argues that gold's investment value depends largely on market demand and price fluctuations rather than its former role in the monetary system. The company recommends focusing on investments with greater long-term wealth-building potential, such as diversified growth stock mutual funds.

Bottom line

Dave Ramsey and Ramsey Solutions advise against investing in gold due to its lack of income generation, high volatility, and uncertain long-term performance. They recommend focusing on investments that offer consistent returns and align with a comprehensive financial plan.

By prioritizing assets like stocks, mutual funds, and real estate, investors can pursue more reliable paths to wealth accumulation. Embracing these strategies may lead to greater stability and signs of financial success in the long run.

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