They Burned Through A $300K Inherited IRA While Earning $38K Annually. Dave Ramsey Says Trading Isn't For Anyone, Especially Not Someone Bipolar
They Burned Through A $300K Inherited IRA While Earning $38K Annually. Dave Ramsey Says Trading Isn't For Anyone, Especially Not Someone Bipolar
Adrian VolenikSun, March 1, 2026 at 10:00 PM UTC
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A couple in Illinois watched more than $300,000 disappear in a matter of weeks after cashing out an inherited IRA and diving into day trading, all while earning just $38,000 a year.
The wife, Liz, shared their story on “The Ramsey Show,” explaining that the losses happened during a manic episode, and her husband was later diagnosed with bipolar disorder. He had been trading from home after the birth of their baby. At first, it seemed like he was making money. Then everything unraveled.
A Manic Episode And A Massive Loss
Liz said her husband withdrew money from an inherited IRA, paid the required taxes, and then began trading aggressively. Within six weeks, about $316,000 was gone.
“It was just kind of a manic thing,” she said. “Very out of character and very upsetting.”
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Personal finance expert Dave Ramsey didn't soften his reaction. “Seventy-eight percent of day traders lose money,” he said. “Statistically, that's called all of them.”
At the time of the losses, the household income was $38,000. Her husband has since taken a new job, earning about $50,000.
When Liz mentioned that her husband had been “doing well” at first, Ramsey pushed back. “Don't even ever say that again,” he said. “That's like saying I'm at the roulette table and I hit so I'm doing well.”
The financial damage didn't stop at the trading account. Because the IRA was inherited, the withdrawal triggered taxes before the money was even invested. The family lost both the tax shelter and the principal.
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The Tax Question And The Bigger Risk
Now the couple is left with more than $300,000 in capital losses. Their accountant told them they can only deduct $3,000 per year against ordinary income, which would take more than a century to fully use. He suggested opening a brokerage account instead of contributing to a 401(k) so they could generate taxable gains and use those gains to offset the losses.
Technically, that idea can work. But Ramsey focused on something else.
“Your husband doesn't need to be anywhere near a brokerage account,” he said. “Manic-depressive people should not be doing trades.”
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He warned that even if the tax advice made sense on paper, it ignored the emotional and psychological risk. “Your accountant may have given you good tax advice but bad mental health advice,” he said.
Ramsey suggested getting a second opinion from another tax professional to see if there are safer ways to use the losses. But he said that no tax break is worth reopening the door to destructive behavior.
“Before I did a brokerage account, I would just lose the money,” he said. “It's just part of the sadness of this whole situation.”
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He ended with a broader warning about trying to rush wealth building. “Any time you try to short-circuit the process of building wealth, you get bit,” he said. “He who hastens to be rich will not go unpunished. I did it. Her husband did it. Don’t do it.”
For families approaching retirement or rebuilding after major losses, getting steady, long-term guidance can matter more than chasing quick gains. Finance Advisors offers a free way to connect with vetted fiduciary advisors who focus on tax-aware retirement planning. Instead of selling products or pushing trades, they help people think through after-tax income, withdrawal strategies and long-term efficiency. In other words, the kind of planning that can prevent costly mistakes.
For Liz and her husband, the lesson came at a steep price. The money is gone. What remains is the reminder that trading isn't a shortcut to wealth, and for someone dealing with bipolar disorder, it can be especially dangerous.
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