Here’s what Suze Orman and Dave Ramsey say about crypto.
- A growing number of Americans are investing in cryptocurrencies.
- Both Suze Orman and Dave Ramsey believe buying crypto can sometimes make sense.
- The two finance gurus believe certain conditions must be met first.
Cryptocurrency investing has the potential to help you build wealth. But, like any other investment, there’s risk involved. In fact, because many virtual currencies tend to have a lot of volatility in their prices — and since there are many new and untested coins you could buy — the risk is greater than with most other assets.
Despite the increased chance of losing your money that can come with a higher-risk investment, many financial experts are proponents of buying cryptocurrencies. This includes Dave Ramsey and Suze Orman, both of whom have indicated buying crypto could make sense for your finances — but only under certain circumstances.
Here’s when both Ramsey and Orman believe it’s appropriate to put money into this asset class.
Orman and Ramsey both endorse crypto investing if this is true
Both Orman and Ramsey are in agreement that crypto could be a worthwhile investment, with Orman commenting “I think it should be a part of your portfolio,” and Ramsey making it clear on his blog that alternative investments including Bitcoin can sometimes have a role to play in your investing strategy.
However, the important caveat both finance gurus agree on is that it’s important to fulfill other key financial goals first and invest in cryptocurrencies only after accomplishing more important priorities.
For Orman, these other priorities include repaying all of your high interest debt, maxing out your tax-advantaged retirement investing, and making certain your emergency fund has been fully funded. And for Ramsey, you should first invest at least 15% of your income toward retirement and ensure you’re on track to meet your retirement goals before you consider purchasing any coins.
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The reason both experts believe in checking off other financial tasks on your to-do list before crypto investing is because of the risk. They’ve made it clear that there is a very real possibility for big losses due to the volatility and uncertainty of Bitcoin and other cryptocurrencies. And they urge you not to invest money you can’t afford to lose.
If you have a lot of debt, aren’t on track with other investments that will help you build a retirement nest egg, or you have no emergency fund and could find yourself in debt if unexpected expenses arise, then you’re not in a position where you can afford to potentially lose large sums of money.
Should you listen to these finance gurus?
Ultimately, everyone needs to make their own individual choices about how to prioritize their financial goals and the level of risk they are willing to take on when investing. But, in general, it is a good idea to ensure you’re in a good financial position before you sink money into a speculative investment — which is undoubtedly what you’re doing when buying most digital coins.
It’s possible that buying cryptocurrencies could pay off for you and help make you rich — but it’s also possible you could end up losing everything you put on the line. If you aren’t in a position to lose money because your financial life isn’t stable, then purchasing a virtual currency that turns out to be a loser could end up backfiring and leaving you in a bad situation. You don’t want that to happen to you, so heeding Orman and Ramsey’s advice may be a smart move.
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