Re: Gordon Gekko And Nexus 5
Install a 3rd party file manager app like ES File Explorer or Total Commander. Then use it to navigate to the Downloads folder. Once there, copy your MP3 file to the directory /storage/emulated/0/Ringtones. When you go back to Settings>Sound>Phone ringtone, that MP3 should now show up as a choice.
I have found that it is better to copy the MP3 file from Downloads, rather than move, because moving the file can sometimes confuse the Download Manager. Copy it to the Ringtones folder, then afterwards you can go to the Downloads shortcut and delete the original download there.