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What is Dave Ramsey’s portfolio?
Dave Ramsey’s portfolio is designed to help you build wealth. It can be built using 5 ETFs. It is an elegant blend of growth and income.
Article contents
How do you build Dave Ramsey’s Babysteps portfolio with ETFs?
Here is how you build Dave Ramsey’s portfolios with ETFs.
- 12.50% US Large Cap (VOO)
- 12.50 Dividend Growth (VIG)
- 25.00% US Small Cap (VIOO)
- 25.00% US Mid Cap (IJH)
- 25.00% International All-World ex-US (VEU)
What is the historical return of Dave Ramsey’s portfolio?
Portfolio data was last updated on 11th of August 2023, 08:35 ET
| Name | Year to date | Return in 2022 | 10 year return | CAGR since 1989 (%) | Draw Down | Expense ratio | Yield |
|---|---|---|---|---|---|---|---|
| Dave Ramsey’s Baby Steps Portfolio | 10.56 | -16.22 | 9.54 | 9.3 | -39.72 | 0.12 | 1.77 |
Here is what the table is showing you
Year to date: This shows what the portfolio has returned this year starting from the first trading day of the year.
10 Year return: This shows the compounded annualized growth rate over a ten-year period. The current year is excluded from calculations.
CAGR since 1989: This shows the compounded annualized growth rate since 1989. The current year is excluded from calculations.
Expense ratio: This shows the cost of holding the portfolio if you were to construct the portfolio using the proposed ETFs.
Yield: This is the expected dividend yield of the portfolio.
Please note that past performance is not a guarantee of future returns.
How does Dave Ramsey’s Babysteps portfolio compare to the best portfolios?
Below you can see the returns of the best portfolios we benchmarked.
| Name | See Portfolio | Year to date | Return in 2022 | 10 year return | CAGR since 1989 (%) | Draw Down |
|---|---|---|---|---|---|---|
| Ben Stein Retirement | Coming soon! | 4.05 | -18.03 | 9.46 | 10.8 | -35.42 |
| Paul Merriman 4-Fund-Portfolio | Coming soon! | 9.22 | -11.98 | 11.25 | 10.38 | -35.26 |
| S&P 500 | Coming soon! | 17.09 | -18.19 | 12.52 | 10.28 | -37.63 |
| Paul Merriman Target Date Portfolio (25 year old) | Coming soon! | 6.63 | -13.08 | 8.28 | 10.2 | -36.46 |
| Scott Adams Dilbert Portfolio | Coming soon! | 10.87 | -18.75 | 7.0 | 10.19 | -44.88 |
| JL Collins, Simple Path To Wealth, Wealth Building Portfolio | Coming soon! | 16.6 | -19.51 | 12.08 | 10.19 | -37.0 |
| American Institute of Individual Investors (AAII) Portfolio | Coming soon! | 3.74 | -13.91 | 9.7 | 10.16 | -40.85 |
| Paul Merriman Target Date Portfolio (35 year old) | Coming soon! | 6.57 | -13.22 | 8.31 | 10.08 | -36.35 |
| Assetbuilder.com Portfolio 14 | Coming soon! | 6.95 | -16.94 | 7.59 | 9.99 | -37.91 |
| Balanced Portfolio 90/10 | Coming soon! | 14.83 | -18.87 | 11.03 | 9.84 | -32.78 |
Who is Dave Ramsey?
Dave Ramsey is the popular radio host on The Ramsey Show and the author of many personal finance books. His most famous book is The Total Money Makeover: A Proven Plan for Financial Fitness.
He is best known for his popular radio show, “The Dave Ramsey Show,” where he offers financial advice and guidance to listeners. He is also the author of several books, including “The Total Money Makeover,” “Financial Peace,” and “More Than Enough.”
Ramsey’s financial philosophy is based on a “baby steps” approach to money management, which emphasizes the importance of paying off debt, building an emergency fund, and investing for the future. He is a proponent of living within one’s means, avoiding debt, and investing in low-cost index funds.
In addition to his radio show and books, Ramsey has also developed a series of courses and resources aimed at helping people manage their finances more effectively. He has been a strong advocate for financial education and has been critical of the financial services industry for its focus on high fees and complex investment products.
Ramsey’s advice has been both praised and criticized by financial experts and analysts, with some applauding his emphasis on personal responsibility and others criticizing his approach as overly simplistic or unrealistic. However, his radio show and books have been widely popular, and he has helped millions of people achieve financial stability and success through his teachings.
The Total Money Makeover
The Total Money Makeover is a 7-step guide to help you get out of debt, save more money, invest and become financially independant.
Dave Ramsey is a strong advocate for never going into debt. He advises the use of the debt snowball method to pay of your debt. The snowball method dictates that you pay of all of your debts but starting with the debt with the lowest amount.
An alternative to the debt snowball is the debt avalanche which dictates that you start paying off your debt that has the highest interest.
What are Dave Ramsey’s 7 baby steps?
In his best-selling book The Total Money Makeover he presents 7 steps to financial freedom. He calls them baby steps.
Dave Ramsey's 7 babystep. Notice number 4. Source: daveramsey.com
Baby step number 4 suggests that you invest 15% of your income.
Here are the seven steps:
- Save $1,000 in a beginner emergency fund.
- Pay off all non-mortgage debt using the debt snowball method.
- Save 3-6 months of expenses in a fully-funded emergency fund.
- Invest 15% of your household income into retirement accounts.
- Save for your children’s college fund.
- Pay off your home early.
- Build wealth and give generously.
Ramsey’s Baby Steps approach emphasizes the importance of starting small and building momentum over time. By tackling each step one at a time, individuals can gradually work their way toward financial freedom and security. The steps are designed to be practical and achievable for people of all income levels and backgrounds, and they provide a roadmap for making wise financial decisions and achieving long-term financial success.
What is Dave Ramsey’s Baby Steps portfolio?
Dave Ramsey suggests you divide your investment into 4 buckets.
These are the 4 buckets:
Growth and Income These funds create a stable foundation for your portfolio by investing in big, boring > > > > American companies that have been around for decades. They might also be called large-cap or blue chip funds.
Growth Sometimes called mid-cap or equity funds, growth funds are filled with stocks from U.S. companies that are still on the up-and-up and their performance tends to ebb and flow with the stock market as a whole.
Aggressive Growth Meet the “wild child” of your investing portfolio. These funds invest in smaller companies that have tons of potential. When they’re up, they’re up. But when they’re down, buckle up—because you’re in for a bumpy ride.
International These funds are great because they help spread your risk beyond American soil by investing in large companies that are not based in the U.S. Just don’t get them confused with “global” funds, which bundle U.S. and foreign stocks together.
Note: The above is quoted from Dave Ramsey.com
Dave Ramsey does not suggest which specific funds or ETFs to use to target his 4 buckets so the following is our interpretation of Dave Ramsey’s asset allocation.
What is the asset allocation of Dave Ramsey’s portfolios?
Here is how you build Dave Ramsey’s portfolio.
Dave Ramsey’s Baby Steps Portfolio
- 12.50% US Large Cap (VOO)
- 12.50 Dividend Growth (VIG)
- 25.00% US Small Cap (VIOO)
- 25.00% US Mid Cap (IJH)
- 25.00% International All-World ex-US (VEU)
Where can I learn more about Dave Ramsey?
Dave Ramsey is a prolific author, radio host and guest speaker.
His most famous book The Total Money Makeover: A Proven Plan for Financial Fitness is well worth a read even if you’re not in debt. He also gives advice on personal finance.
The Total Money Makeover
His website is here.
You can view and hear his radioshow over here.
Suggestions for your next steps
If you have already committed to a portfolio then maybe you need help maintaining the portfolio. In this case you will find our rebalance worksheet useful.
Rebalancing your portfolio lowers your risk and may provide higher returns in the long run. It is completely FREE.
You can find the rebalance worksheet in our article Here Is The Most Easy To Use Portfolio Rebalance Tool.
Related questions
What are the 7 baby steps?
The 7 baby-steps are:
- Save $1,000 for your starter emergency fund.
- Pay off all debt (except the house) using the debt snowball.
- Save 3–6 months of expenses in a fully funded emergency fund.
- Invest 15% of your household income in retirement.
- Save for your children’s college fund.
- Pay off your home early.
- Build wealth and give.
Who is Rachel Cruze?
Rachel Cruze is the daughter of Dave Ramsey and a #1 New York Times bestselling author.
