Lazy Money

I work with a guy named Joe. He's new in the industry, and having a new perspective is cool. He told a client of ours, "I hate all this lazy money."

Image Source: Behance, Tinkoff Investments

Lazy Money! I love the phrase!

I define Lazy Money as

“Seemingly small amounts of cash sitting in any type of account.”

Small accounts from old employers.

HSAs or FSAs with small balances.

A checking account that never gets used.

Piles of cash, coins, or currency that have no purpose.

‘Lazy Money‘ for many people, adds up to thousands if not tens of thousands of dollars.

The person we were meeting with, her 'lazy' 2-3% cash in accounts was close to $50,000. Her old retirement accounts were hundreds of thousands. Slowly deprecating 2-3% per year while the Federal Reserve intentionally devalues your currency.

I hate lazy money.

Understandably, the pain of dealing with 10 small accounts seems greater than the return of opening, investing, transferring, and closing those accounts.

Despite the massive inconvenience, I have two reasons to make your Lazy Money work again.

#1 Inactive accounts get turned over to the state. If you don't interact with an account (in Colorado) after a few years, the company is forced to turn the account and money over to the state. In some cases, like an uncashed check, the money goes to the state much sooner.(If you want to check yours, go to Colorado Unclaimed Property)

#2 Is the 90% Rule. If you give 90% effort, you get 90% of the results. If you give 40% effort, you get 40% of the results. BUT. If you give 100% effort, you get 1,000% of the results. Going all in, with focused intensity, gives a reward that is exponential. Declaring that you are going to commit 100% to maximizing the efficiency of your investments has a return that is greater than the cost of administering various accounts.

Lazy Money isn’t just a math problem. It’s an intention and organization problem because it creates inefficiencies that prevent you from going 'all-in' on getting your financial life in order.

Take the afternoon and fix all of your lazy accounts.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

All investing involves risk including loss of principal. No strategy assures success or protects against loss.