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Imagine checking a long-forgotten account and discovering it’s worth millions of dollars. That’s what happened to Sarah, a 50-year-old mom in Seattle.
Sarah said she had been homeschooling her children for 20 years and happened to look at her employee benefits account from her job at a tech giant. That’s when she called the Ramsay Show for advice.
Sarah told Dave Ramsey that her account went from being worth nothing to about $18 million at current market prices. Although she did not reveal which company it was, some netizens speculated that it might be the technology giant Nvidia, whose stock price has risen sharply in the past two years.
Regardless, the sudden millionaire says she has “no idea” what to do with her windfall. Ramsay offers some advice.
Ramsey said it would be “terrible and unwise” to invest so much of one’s net worth in one stock. He suggested that Sarah sell some of her shares and invest the money elsewhere. However, given the size of her wealth, selling even a small portion of the account would likely push Sarah into the top tax bracket.
According to the Internal Revenue Service, the top federal capital gains tax rate for people at this level is generally 20%—although there are some exceptions(1).
Depending on where you live, you may also face state taxes on capital gains from selling long-term investments. For Sarah in Washington state, it’s another 7% (2).
While Ramsey recommends talking to a professional tax planner or investment advisor to minimize her tax bill, he’s well aware of the urgency of the situation. He insisted that Sarah diversify away from single stocks as quickly as possible.
“If I were you, I’d rather have security than an extra 20 percent, even if it costs some money,” Ramsey told her.
Read more: Nearing retirement but no savings? Don’t panic, you’re not alone. Here are 6 easy ways you can catch up (and fast)
According to Ramsey’s advice, consulting a financial planner can help you optimize your portfolio so that your net worth is no longer tied to just one stock or asset.
You can find a fiduciary financial advisor near you through Advisor.com. Without any start-up fees, Advisor.com matches you with up to three FINRA/SEC registered advisors who match your needs.
From there, you can schedule a free, no-obligation consultation with your preferred advisor.
They can help you build a diversified portfolio that meets your financial goals without taking on excessive risk.
Plus, working with a financial advisor can even lead to better returns. According to Vanguard research, clients who work with a fiduciary expert have an average net return that is 3% higher than those who do not work with a fiduciary expert.
In addition to the importance of diversification, Sarah’s story can provide another lesson for investors: the value of holding on rather than folding.
An oft-repeated investment mantra is “time in the market trumps timing the market.” This principle, popularized by investment experts such as Warren Buffett, is based on the fact that most investors have trouble finding the right stock at the right price at the right time.
By focusing on longer time lines, rather than optimizing around short-term gains, investors can take advantage of the market’s long-term upward trend.
When investors try to time the market, they may end up buying at the peaks and selling at the troughs. Continuous investing can help your portfolio better manage the ups and downs of the market over time, leading to compound returns.
Buffett once said in an interview with the Public Broadcasting Service (PBS), “I’m not going to try to guess when to enter and exit the market (3).”
Instead, Buffett’s investment philosophy is best reflected in a line from his 1989 Berkshire Hathaway shareholder letter: “It is much better to buy a great company at a fair price than a mediocre company at a great price(4).”
In Sarah’s case, this “set it and forget it” approach appears to have been successful. But if the market tanked, she risked losing millions of dollars.
Instead, a safer approach for many may be to invest regularly in a range of stocks or low-cost index funds, which can provide better diversification and wealth preservation.
Another of Buffett’s beliefs is that you should invest in stocks that are priced based on solid fundamentals, rather than just investing in a stock because it’s cheap.
But mining stocks and companies takes time and effort. That’s where a platform like Moby can help you find the top stocks and send them directly to you for review. The platform provides expert research and advice to help you identify strong long-term investments backed by the advice of former hedge fund analysts.
Over four years, their recommendations have outperformed the S&P 500 by an average of nearly 12% across nearly 400 stocks. They also offer a 30-day money back guarantee.
Moby’s team spends hundreds of hours sifting through financial news and data to provide you with stock and cryptocurrency reports delivered directly to you. Their research can keep you abreast of market changes and help you take the guesswork behind your stock and ETF selections.
Plus, their reports are easy to understand for beginners, so you can become a smarter investor in just five minutes.
According to a Fidelity report using Bloomberg data, trying to buy and sell stocks at the right moment can cost you dearly(5).
If you invested $10,000 in the S&P 500 in January 1988 and kept the money through all the booms and busts, the value today would be $522,576. Meanwhile, if you were buying and selling stocks during that time and inadvertently missed the market’s five best days, your stock price would have plummeted 37% and you would have lost $330,060 to your name.
This is a powerful example of the power of compound growth over a long investment horizon.
You can build consistent, sustainable investing habits with Acorns, an app that automatically invests spare change from everyday purchases into a smart ETF portfolio.
Here’s how it works – when you buy a cup of coffee for $4.25, Acorns automatically rounds the purchase amount to $5 and invests the 75 cents difference into a diversified portfolio.
A daily rollup worth just $2.75 adds up to a total value of over $1,000 in a year – and that’s before it makes any money in the market. Since 1957, the S&P 500 has averaged annual returns of over 10% (6). While past performance is no indicator of future returns, if we assume similar returns over the next 20 years, your net balance will be approximately $57,275.
Even better, when you sign up with Acorns now with a fixed deposit, you can get a $20 bonus investment to help you get started.
Much of Sarah’s wealth is tied not just to a single stock, but to the market itself. She didn’t just see the company doing well on a whim. She also relies on consistency across the market.
Goldman Sachs CEO David Solomon said, “Stock markets could fall 10% to 20% over the next 12 to 24 months (7).”
If this is indeed the case, then diversity is not only “smart” but necessary.
However, there are many different assets worth considering besides stocks. They are becoming increasingly easier to take advantage of through new platforms and investment opportunities.
While billionaires like Jeff Bezos and Bill Gates continue to invest heavily in stocks, they also carve out a portion of their portfolios with assets that perform differently than the market.
One prominent example is a globally recognized asset class that, until recently, was the domain of the ultra-rich. From 1995 to 2025, this asset type even outperformed the S&P 500 by 15%, while showing almost zero correlation to traditional stocks.
Questionable investment? Art.
Until recently, this world was off limits. Now, with Masterworks, you can buy a stake in multi-million dollar works by icons like Banksy, Picasso and Basquiat. While art can be illiquid and often requires long-term holding, it provides unique portfolio diversification.
So far, Masterworks has sold 25 works of art, and the annualized net returns on assets held for more than one year are 14.6%, 17.6% and 17.8%.
Even better, you can skip the waitlist and get priority for arts diversity opportunities today.
Please note that past performance is not indicative of future returns. Investing involves risks. Please see important Regulation A disclosures at Masterworks.com/cd
According to the U.S. Census Bureau, monthly rent costs in U.S. counties increased by 20% between 2020 and 2024 compared to the previous five years (8). While this may be discouraging news for renters, there are ways to benefit from this growth if you view it as an investment opportunity.
For example, you can get into this market by investing in shares of vacation homes or rental properties through Arrived.
Backed by world-class investors including Jeff Bezos, Arrived allows you to invest in shares of vacation and rental properties and earn a passive income stream without the additional work of being a landlord of your own rental property.
To get started, simply browse their selection of vetted properties, each selected based on their potential appreciation and income-generating capabilities. Once you select a property, you can start investing with as little as $100, potentially earning quarterly dividends.
We rely only on vetted sources and reliable third-party reports. For more information, see our Editorial Ethics and Guidelines.
Internal Revenue Service (1); Washington State Department of Revenue (2); Corporation for Public Broadcasting (3); Berkshire Hathaway (4); Fidelity (5); Dimension Fund Advisors (6); CNBC (7), U.S. Census Bureau (8)
This article provides information only and should not be considered advice. It is provided without any warranty of any kind.
