April 29, 2021
Lazy Money | What is Lazy Money?
Lazy Money is money that is not earning you anything. It is not growing. It is just sitting there.
Attorney and Advisor Chris Berry discusses Lazy Money and what to do with it in this episode of Daily Wisdom.
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Episode Transcript
Money That is Not Working Hard
Hey, this is Chris Berry with Castle Wealth Group. And today we’re going to talk about lazy money. Guh … Zzz. Do you have lazy money? We’ll talk about some strategies there. And if you like this information, please make sure to subscribe to our YouTube channel and comment down below.
Christopher Berry is a leading estate attorney and advisor in the area of retirement and legacy planning. He has been featured in publications, such as Forbes, Kiplinger’s, Crain’s Detroit and more. He’s the host of the weekly radio show and podcast, The Chris Berry Show, he’s a national thought leader, as it relates to retirement and legacy planning, and has authored the Amazon best selling book, The Caregiver’s Legal Guide.
So what is lazy money? It’s money that’s not working hard. It’s money that’s not working for you. It’s money that should maybe be used in other ways. And so lazy money is money that’s really not earning you anything, it’s not growing. And so there’s different forms of lazy money. One form of lazy money, a common one, is having too much sitting in your checking, your savings or even CDs these days. The idea is that you have safety, meaning you’re not going to see the balance drop, but you’re losing out to inflation. And when we’ve talked about inflation on a previous YouTube video. So the idea is that we want to be keeping pace with at least, if not beating inflation. And so lazy money is money that’s just sitting there. It’s not working for you. Now I’m not saying you shouldn’t have any money that’s safe and liquid sitting at the bank.
You should have money coming in into your checking account and you should have an emergency savings and you should have planned for whatever big expenses you have for the year. Then if you are in retirement and your income is say 3,000 and your expenses are 4,000, we call that a income gap and we’d want that money sitting in checking, savings, money market, safe and liquid, where we don’t have to worry about the market. We don’t have to worry about any liquidity issues. But, you probably shouldn’t have $800,000 sitting in checking, savings, money market, or even just sitting in CDs because it’s not working for you. Chances are you’re not going to have to go through $800, let’s say all in one year. What if we could get a better rate of return and still offer some guarantees of safety or maybe put it into the market with understanding time horizons.
And we could look at aggressive or conservative portfolios, but one of the things is … and we sent out a email to our clients the other day, talking about, “Hey, if you have some lazy money, let’s put that to work for you. Where there some things, depending on your time horizon, can still offer you guarantees of safety, but offer you a better rate of return than just having it sitting in a 3% or 2% or 1% CD, better than having it sitting in a checking account, earning you nothing, or a savings account, earning you what 0.05%, like hardly anything. That’s what we call lazy money. Now I’m not saying you shouldn’t have an emergency fund. You certainly should. I’m not saying that you shouldn’t have big expenses sitting in kind of checking, savings, ready to be used. Where if you know, you have to fix up the roof in a couple months, or you’re taking a big trip. Not that you can travel anywhere right now, that money should be safe and liquid.
Income Gap
And then if you do have a income gap where your expenses are greater than your income, then yeah. That money should be sitting in safety and liquidity, at least for that year, that’s that now bucket of money. But, if you have more than that sitting there, then that money is what we call lazy money. And there’s different ways that maybe that money can work a little bit harder for you, because you worked hard to get it. So now you should make that money work hard for you. And there’s different strategies. Whether we put it in the market, whether we put it into multi-year guaranteed annuities, there’s just different options, different tools, depending on what your goals are.
And we always try to figure out what are your goals. What is the best strategy to help you achieve the goals and then pick the right tools. So if you do have lazy money, let’s figure out what’s your goal with that money, other than just having it sit there and then we’ll figure out the best strategies and the best tool at that time. So do you have lazy money? Let’s make it work for you. This has been Chris Berry with Castle Wealth Group. Thank you so much.
Castle Wealth Group has clients across the nation and helps families plan, protect and preserve what is important by creating a retirement and legacy blueprint.