Lazy Money

Let’s talk about times when our money is lazy and how we can better put it to work. We’ll explain our definition of lazy money, why people have it (and maybe have too much of it), and how we can make better use of it.
Share this episode with a friend:

Today’s Question:

Let’s talk about times when our money is lazy and how we can better put it to work. We’ll explain our definition of lazy money, why people have it (and maybe have too much of it), and how we can make better use of it.

In The News:

1:57Is the Bitcoin craze over? A lot of people bought in when it was new, and some early investors got in at $900 in 2017. It peaked close to $20,000, and now it costs about $3,800 for a Bitcoin. With your investments, you must consider the risk and reward. We didn’t put any clients in Bitcoin because it had no track record. So you can play with trends like that a little bit, but make sure it’s an amount you can afford to lose.

The Confidence Corner:

6:54Your lazy money consists of your “safe” investments. Money in checking accounts, CDs, and emergency funds are all considered to be “safe money.” There’s been a big shift over the past six months toward putting more money into funds like these. Sure, these accounts might be paying two percent, but you need to consider the rate of inflation. There’s an amount of money you need to have for emergency funds and operating funds, but don’t put too much into these accounts. It’s called lazy money because the money’s not working for you. Instead, you should be making interest that is outpacing inflation.

9:24What are reasons that people have that lazy money? A lot of people got burnt by the last market dip in December, but if you stayed invested you are back. In 2008-2009, people jumped out, and many have not yet gotten back into the market. There’s a lot of reasons why people keep money in “safe” accounts, but you never see somebody that becomes a millionaire by investing in CDs.

11:14How do you better utilize too much lazy money? Ultimately, it comes down to risk. It’s important to understand standard deviation with your financial advisor. This is an actual scientific measurement of volatility. An advisor needs to show you that compared to the volatility of a CD or bond.

12:10Your timeline plays a part in how you invest. Everyone is different, and that’s why it helps to use an advisor to figure out your timeline. Knowing when you need this lazy money to do something will determine where you should put it.

The Mailbag:

15:26Kathy asked whether it’s a good idea to take out a 401(k) loan to pay off a debt. No, in most situations this isn’t a good idea. People think they aren’t “borrowing” that money, but really, they’re taking away money from their future. Over time, it really hurts. If just $40,000 was left invested, it would amount to more than $80,000 over ten years. If you absolutely need it, then you can do it, but try to find another option if possible.

A Point Of Wisdom:

Additional Resources:

Schedule A Meeting

Download Your Retirement Rescue Toolkit Learn More About Our Firm

Your Guide:

Nathan O’Bryant – Contact

Share this episode with a friend:

EXPLORE MORE EPISODES

What is Blackrock’s 100% Stock ETF Hedge?

In the ever-evolving landscape of financial products, BlackRock has recently introduced a stock ETF with a 100% downside hedge. This announcement has generated a buzz among investors, but what does it really mean? In our latest podcast, Nathan breaks down the complexities of this new offering and provides crucial insights for investors.

Listen Now »

Cryptocurrency and Your Financial Plan

Should you get into cryptocurrency? Cryptocurrency has been a hot topic for years, often seen as the Wild West of the financial world. However, recent developments suggest that this once-fringe investment is moving into the mainstream. Nathan shares how he views this form of investing and how it may or may not fit in your financial plan.

Listen Now »

YOUR HOST

Nathan O’ Bryant is the founder of O’Bryant & Associates, Inc., a Registered Investment Advisory firm in the state of TN. He’s been helping people plan for retirement and their financial futures for more than 15 years.

The weekly podcast features discussion and excellent guidance on the important financial planning questions we all have. Whether it’s tax planning, retirement income, social security or the stock market, you’ll find that no topics are off limit on this show.

YOUR HOST

Nathan O’ Bryant is the founder of O’Bryant & Associates, Inc., a Registered Investment Advisory firm in the state of TN. He’s been helping people plan for retirement and their financial futures for more than 15 years.

The weekly podcast features discussion and excellent guidance on the important financial planning questions we all have. Whether it’s tax planning, retirement income, social security or the stock market, you’ll find that no topics are off limit on this show.

SUBSCRIBE