Personal Finance

Stock market investing is for the long term

  • Looking further ahead: if you want to invest in the stock market, you should be looking to do it for a longer timeframe than three to five years, says Dave Ramsey (File photograph)

Dear Dave,

I知 almost debt-free, and I値l be finishing my master痴 degree soon. I知 not from this country, so I値l be returning home in the next three to five years. Considering my situation, would investing in the stock market be a good idea? I致e been reading that the market is about to crash, so I wanted to get your advice before doing anything.


Dear Rahm,

If someone could accurately predict the stock market with certainty, that person would be a multi-bazillionaire. Right now, there are also articles out there that say the market is about to boom. There are always 堵lass half-full and 堵lass half-empty articles floating around. I wouldn稚 avoid stock market investing based on one ridiculous article you read.

However, in your situation you may not want to invest in the stock market right now. History says you stand a fair chance of coming out with less than you put in if you don稚 leave the money invested in the stock market alone for at least five years. The market cycles up, and the market cycles down. This really isn稚 a big problem if you池e going to put your money in there, and leave it alone for 20 years or more. But three to five years? The historical data says you致e got a reasonable chance of actually losing money.

So, I probably wouldn稚 invest if you池e going to be gone in five years or less. Instead, when you池e settled and have a career in your home country, I壇 advise looking into how you can invest there. You might even want to do some research, and find out if you can begin investing there now.


Dear Dave,

I知 debt-free except for my home, and I have a small business with revenues of around $100,000 annually. About half of that is profit, and I typically pay myself 40 per cent of the bi-weekly revenue. I知 in the media business, and I need to upgrade some equipment. At what point do I put back a little more money, or pay myself a little less, to make this happen?


Dear Luke,

I know what you mean, man. We池e in the media business, too, and around my office it seems like we buy more and newer technology every day. Really, it痴 like a black hole. You could throw money into it the rest of your life, because practically the very moment you open the box it痴 obsolete.

We finally decided to designate a percentage of our revenues to equipment replacement. Something is always being replaced, but this way we致e got a limit and we致e got something set aside to make our technology needs happen. It痴 like the envelope system. If the envelope痴 empty, we have to stop buying and put off whatever it is until the cash is available again.

I hope this helps!


Dave Ramsey is CEO of Ramsey Solutions. He has authored seven bestselling books, including The Total Money Makeover. The Dave Ramsey Show is heard by more than 14 million listeners each week on 600 radio stations and multiple digital platforms. Follow Dave on the web at and on Twitter at @DaveRamsey.