Breaking Down Bitcoin ETFs & “Lazy Money”

Our 2 Cents – Episode #164

Breaking Down Bitcoin ETFs & “Lazy Money”

In this episode of Our 2 Cents, Steve and Gabriel discuss two interesting topics on opposite ends of the spectrum: Bitcoin and “Lazy Money.” They talk about the recent approval of Bitcoin ETFs and the potential for mainstream investors to enter the Bitcoin market. Plus, they share ideas for that cash sitting idle in a savings account.

  1. Breaking Down Bitcoin ETFs:
    • The basics: What is Bitcoin and the blockchain?
    • The future of Bitcoin – is it a digital currency or an asset?
    • The introduction of Bitcoin ETFs
    • Should you consider buying Bitcoin or a Bitcoin ETF?
  2. Put Your “Lazy Money” to Work:
    • What we mean when we say lazy money, and what makes it “lazy?”
    • Why do people sometimes have too much money on the sidelines?
    • What are some ideas to put that lazy money to work?

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Podcast Transcript

Announcer: You are listening to Our 2 Cents with the team from SGL Financial, building wealth for life. Steve Lewit is the president of SGL Financial, and Gabriel Lewit is the CEO. They’re here to discuss all the latest in financial news, trends, strategies, and more.

Gabriel Lewit: Well, welcome back to the show everybody. We are excited to have you here on Our 2 Cents.

Steve Lewit: I got to laugh.

Gabriel Lewit: We’ve got Steven, Gabriel and producer Katie in the room.

Steve Lewit: And we’re all laughing, folks.

Gabriel Lewit: We’re laughing because I always say the same opening line. Well, hello. Or, good morning everybody.

Steve Lewit: Gabriel says, “I got to find a new way to start the show.” So we went through a few practice runs, then the show starts and there’s this moment of silence.

Gabriel Lewit: I wasn’t sure what I was going to say, so I just said, “Hello, hello.”

Steve Lewit: Hello, hello.

Gabriel Lewit: Well, hopefully you all are doing…

Steve Lewit: Welcome back.

Gabriel Lewit: Pull off my southern accent today. Hopefully you all are doing well today.

Steve Lewit: I like the SGL Nation opening.

Gabriel Lewit: Well, we haven’t introduced the SGL Nation yet, so I wasn’t sure whether to use that.

Steve Lewit: You got that from the Bulls, right?

Gabriel Lewit: Well, I think they call them Bulls Nation. Yeah, all the Bulls fans, which I am one of them. I’m part of Bulls Nation.

Steve Lewit: So, I think we could have an SGL Nation. It sounds braggadocious, doesn’t it?

Gabriel Lewit: Well, I don’t think we have quite as many followers as the Bulls.

Steve Lewit: You think?

Gabriel Lewit: I know we have a popular… Actually in podcast standards folks, we get stats from our podcast thing that says we’re actually amongst one of the more popular podcasts of all the millions of podcasts out there. So thank you to you.

Steve Lewit: Yeah, thank you. SGL Nation.

Gabriel Lewit: Thank you, SGL Nation. Yes, please continue to share.

Steve Lewit: The nation.

Gabriel Lewit: The show with your friends and family and make recommendations. If you want us to talk about anything, just send us your thoughts and feedback. Well, we love to hear it. And we have a great show for you today. So we’re going to talk today about two key things.

Steve Lewit: That was a great opening. I just want you to know that.

Gabriel Lewit: Thank you. Thank you. We’re going to talk about Bitcoin. Okay, there’s some news related to Bitcoin, which is why we’re going to talk about it here today. And we’re going to talk about lazy money, Bitcoin and lazy money. That’s our focus for today.

Steve Lewit: That’s like opposite ends of the totem pole.

Gabriel Lewit: It kind of is. I thought, funny enough, because of that, they go well together.

Steve Lewit: Yeah, they do actually.

Gabriel Lewit: Like ice cream and a cone.

Steve Lewit: Tomato soup.

Gabriel Lewit: Like ice cream in a cone.

Steve Lewit: Yes, sort of. One on top, one on the bottom.

Gabriel Lewit: Okay, so let’s go ahead. Which one do you want to talk about first, Mr. Lewit?

Steve Lewit: I’m going to let you pick because you opened the show so well.

Gabriel Lewit: Okay. Well, we’re going to talk about Bitcoin because it’s been in the news.

Steve Lewit: Great.

Gabriel Lewit: All right. And if you haven’t been paying attention, some of you may or may not at least pay attention to Bitcoin News. Bitcoin got ETFs approved to track the spot price of Bitcoin. And this was something that Bitcoin proponents have been wanting for a long time, because it opens up purchasing Bitcoin to more mainstream investors.

Steve Lewit: Before you go on, explain what an ETF is and what a spot price is.

Gabriel Lewit: You got to let me finish my intro.

Steve Lewit: Oh, I’m sorry. I’m sorry.

Gabriel Lewit: Mr. Lew.

Okay. Well, what I was going to say is first and foremost, we’re going to break this down for you, because some of what I just said might have sounded very foreign to some of you. So let’s start with Bitcoin itself. I know many of you probably know what Bitcoin is. Some of you probably think you know what Bitcoin is. Mr. Lewit here, that’s with us, has taken a course in fact.

Steve Lewit: I’ve been certified.

Gabriel Lewit: On Bitcoin. Are you officially certified yet?

Steve Lewit: Well, tomorrow, but as far as I’m concerned, I’m certified. Because I’ve killed myself listening and learning. So here’s what happened is Bitcoin came out, and I was really fascinated by it.

Gabriel Lewit: Actually, you were a Debbie Downer first, if I must say.

Steve Lewit: Well, I was, that’s why…

Gabriel Lewit: I’m going to just put that on the record. I was actually the one that I think introduced you to this idea of thinking about Bitcoin more as a true long-term investment vehicle option. And you were initially a little bit of a Debbie downer, just a little.

Steve Lewit: Just a little.

Gabriel Lewit: And now you’ve seen the light, maybe.

Steve Lewit: Well, if I could ever get my story out here without interruption.

Gabriel Lewit: All right, go ahead. Now you can go ahead.

Steve Lewit: So, as I was about to say, crypto came out, and folks, it was supposed to be a currency, a digital currency. That was the original idea of Bitcoin, was to have a currency that was not centrally controlled. So then came the Bitcoin.

Gabriel Lewit: And by centrally controlled, you mean by say a government?

Steve Lewit: By a government, by a federal bank, by anybody. And I’ll talk about blockchain technology, because that’s what it’s really all about. But it didn’t become a currency, but what it became was an asset. Much like gold is an asset or much like your house is an asset, something to hold. And it’s very complicated. But about a year ago, a year and a half ago, I started not learning about Bitcoin, but I started reading about what’s underneath Bitcoin, which is this thing called blockchain technology. And that really sparked my interest.

And the more I looked into it, I said, “Hey, wait, this has massive appeal all over the world in many, many different industries.” Not the Bitcoin itself, but this blockchain technology. So that’s why I went and got my certification on it. So did I answer the question that you asked, or did I go off on a tangent?

Gabriel Lewit: I can’t even remember exactly what I asked you actually. But what I was going to say is, so yes, first and foremost, I think we were talking about what is Bitcoin?

Steve Lewit: So, Bitcoin is a crypto asset, it’s a digital asset.

Gabriel Lewit: So, it’s still called a cryptocurrency? Some people still call them cryptocurrencies.

Steve Lewit: Incorrectly. Bitcoin is not really a cryptocurrency. There are cryptocurrencies called Stablecoins that are actually linked to the dollar. Bitcoin at this point is not going to be a currency, it is simply an asset.

Gabriel Lewit: Well, that’s where I agree with you there. Obviously over time things have shifted for Bitcoin. So to your point, way back when people thought you could still actually go places and buy things in Bitcoin right now.

Steve Lewit: That’s not the future of Bitcoin.

Gabriel Lewit: But it’s likely not going to be the future where it’s a spendable currency as much as it is a digital asset, like gold. Like say some people call it the digital gold. Because gold for example, you can’t really go somewhere right now or most places and buy things in gold. Some places you could show up with a gold coin and they might accept it, but most places aren’t. They’re going to say you need an actual currency, like the US dollar, for example, to buy goods.

But there’s still value of course to gold, even though most people don’t own big bars or blocks of gold. Some people own some coins. Some people have bars buried in their yard in case of the apocalypse.

Steve Lewit: That’s tight. Guys, don’t tell anybody if you do. I had a client walk in and say, “You know I got gold buried in my backyard.” And I said, “Please don’t tell me that.”

Gabriel Lewit: You said that? That’s funny.

Steve Lewit: And please don’t tell anybody else that.

Gabriel Lewit: Yeah, you don’t let that one slip, at least not where you live certainly. Okay, so what do you do with Bitcoin? Well, you hold onto it and you hope it makes more money. And this is where I think some of the detractors, and we’ll talk, again, we’re going to go into a little deeper detail here. Some of the detractors say, well hey, if I can’t buy anything with this, and it’s not a company. It doesn’t have a value, a balance sheet, it doesn’t make money, it doesn’t provide dividends, it doesn’t do anything. If its only value is that somebody else finds it more valuable, then what’s the point? Isn’t this just a bubble that’s ready to crash at any moment?

That’s how some people look at it. I think people that just look at it very surface level don’t understand a lot about what you had mentioned, blockchain technology behind the scene. They don’t understand necessarily this big new thing. And it’s also being, I think, distracted by the fact that there was a run, especially in 2021, of hundreds of really knockoff, crappy, excuse my language, cryptocurrencies, that were really blowing up. And a lot of them were scams where people lost all their money, and their uber speculative, no purpose whatsoever. And I think a lot of people have then conflated that to Bitcoin as well and said, “Well, all of these things are just funny money, and I don’t want to own any.”

And that might be a little bit short-sighted, which is part of what we’re trying to unpack here today.

Steve Lewit: Well, I’m beginning, no, I’m over the hump. I think it is short-sighted. Let me back up one more step and say, folks, this is still Bitcoin and crypto, and digital assets and assets. People are buying paintings in digital form and paying millions of dollars for it. The NBA has its own non-fungible asset sites. They’re selling cards like baseball cards through technology. So the whole world is moving into this digital arena or this digital space.

And I’ll tell you, it’s really hard to comprehend. Because we’re not used to it, especially if we’re a little bit older like you are, Gabriel, a little bit older. It’s hard to understand that there’s a whole world, it’s called Web3, that is a digital world where you can have assets in digital form, you can have currency in digital form. All of these coins, all of these tokens are all digital. There’s a reason for them being, but it is the Wild West. It’s still the Wild West. There’s a lot to learn and a lot to do, and a lot of legal issues and tax issues.

Gabriel Lewit: And it’s becoming less of the Wild West. So the original goal with Bitcoin was that it was going to be unregulated by design. And that was one of the draws as people are saying, “Hey, government’s not going to have their hands in my pot of money.” Well, there is one problem with that. When something’s unregulated, all the bad actors are going to flock to that. And you saw that with the FTX crypto exchange collapse, because they were doing all sorts of things they shouldn’t have been.

Some of it’s because they were less regulated and had offshore corporate headquarters, and all sorts of other things, just other issues there. There’s fake cryptocurrencies that are out that anybody could purchase that were unregulated. And so all of these things created this very hesitant environment where you weren’t sure what to do or what to trust.

And I think that’s my lead-in here to why this spot Bitcoin ETF being released is such a big deal. Because at the very least you can be confident that if you buy one of these from say Blackrock, which is a multi-trillion dollar asset manager, one of the biggest in the world, on a regulated custodian using dollars, and you’re purchasing an ETF, that at least gets rid of most of the unscrupulousness risk, if you will, of all these fake things that are out there. And gives you the ability to own something with some confidence that it’s at least just related to the value of Bitcoin, you don’t have to worry about the safety of your money as a whole.

Steve Lewit: Okay, so what is an ETF?

Gabriel Lewit: So good, we’re starting to unpack this. We talked about what Bitcoin is. I forgot to mention one thing, so Bitcoin is mined. What does that mean? It’s a digital currency that’s mined. Well, there are basically codes that computers need to crack that takes tens and tens and tens of thousands of dollars’ worth of electricity to run computers nonstop to mine, or try to crack the codes to release a Bitcoin. These are called mining companies.

Steve Lewit: Yes, and different coins like Ethereum have different kinds of ways of mining or staking, I’m not going to get into that, but Bitcoin has a limited supply of twenty-one million coins, Bitcoins, I think there are 18 or 20 million out now. I forgot the number. What’s interesting about that is they estimate between six and 10 million Bitcoins have been lost or stolen. They don’t know where they are, but there’s a limited supply.

I know we’re talking about Bitcoin, but I think the bigger story is the blockchain technology on which these coins run. Because that has implications all over in every industry, like supply chain, like transactions. They can do transactions in blockchain technology that are very inexpensive.

Gabriel Lewit: Can I jump in?

So you’ve been kicking me here to explain what an ETF is, which I would argue most people may even know an idea of what that is. But you’ve been using blockchain as if it’s a term that everybody understands.

Steve Lewit: Yeah, I know.

Gabriel Lewit: So, I’m kicking you back here. Can you explain what the blockchain is?

Steve Lewit: All right, folks.

Gabriel Lewit: Very quickly, very quickly.

Steve Lewit: A blockchain is a series of digital transactions, it’s computer code. It’s just this huge computer code. So you’re going to do a transaction, it gets put in the blockchain in technology. And that blockchain is managed by thousands of other computers that have to say that that one transaction matches the keys they have in their computers to make it a real transaction. Once that transaction is in the blockchain, it cannot be changed.

In other words, it’s there forever. No one can go in and change it. If they wanted to change it, all these thousands of computers would have to agree. So anything that happens in a blockchain, because each of these transactions are a block in the chain, and each of these are there forever. For example, if there’s lettuce that gets what, a disease. They pull all the lettuce off the shelves. With blockchain technology, you could go back, all the transactions, and you could find the exact farm and the exact shipment of where that lettuce came from and just take that off the shelves.

So this technology is foolproof. It can’t be changed. It’s a record of everything. What’s happening is this technology’s becoming faster and faster. Big companies like Discover Card or credit card companies have millions of transactions, are just waiting for this to get to the speed, and the speed of them keeps improving, where they could do all these transactions at virtually pennies instead of dollars and cents that they’re doing it today.

Gabriel Lewit: Well, it’s still very conceptual, I think for many, what that means. But the point is is there’s a real life usage case here for the technology behind Bitcoin, and to some extent Ethereum, that makes it very useful in the real world environment beyond just the fact that Bitcoin is somewhat of a more speculative priced asset.

Steve Lewit: And to your point, Bitcoin has been around for a long time. It’s gone through its ups and downs, but it’s weathered all the storms. And to your point, these coins are being accepted by very smart people in the financial industry. And that’s where the creation of an ETF, which basically says by the SEC, it says, you know what? We think these have value. We think they’re legitimate things. It’s okay to have this ETF, which you’re going to explain, and trade on them just like you would trade a security. Now they’re not securities yet or some are, some aren’t. That’s another complex issue. But that’s a big stamp of approval that this is the real deal.

Gabriel Lewit: Well, so to answer your question, an exchange traded fund is the official name of an ETF. So it’s basically it can track an index, for example, it can have a basket of stocks. There’s many different types of ETFs, but the point is it’s got a ticker symbol. You can go online, you can type in that ticker symbol, you can see how it’s done historically. How it’s done year to date, last year, last five years. And you can generally purchase that ETF on most custodial exchanges, at Charles Schwab, at Fidelity, at wherever else you might be holding your funds and looking to invest.

And so that’s the idea there. It’s making it a lot easier for people to invest in you. You don’t have to go open an account at Coinbase, you don’t have to go find Kraken. And you may not know what Coinbase or Kraken is, but they are what are called centralized crypto exchanges where you can buy and sell cryptocurrency.

Steve Lewit: You don’t need a wallet, a cold wallet or a hot wallet.

Gabriel Lewit: We’re not going to get into all these crypto related terms here today. The big question is now that this has been released, which is again a pretty big deal because it was under regulatory scrutiny for a very long time. It’s been approved. Should you buy it? That’s where I wanted to spend the next few minutes before we talk about lazy money.

Steve Lewit: So, this is not lazy money buy.

Gabriel Lewit: Well, we’ll get to what lazy money is in a second. So the question is, should you buy a Bitcoin ETF or should you buy Bitcoin? Well, the answer depends on A, are you a very aggressive speculative investor, or do you want to have a portion of your funds that are very aggressive or speculative? Why? Because Bitcoin is a very volatile asset. It has between four to five times as much volatility as the S&P 500, which as everyone knows is also quite volatile. So that means you have to be able to be comfortable with the potential of seeing big swings.

And by big swings, I mean big 75, 80% decreases historically. So there was people that at one point bought Bitcoin back when it was I think $67,000 in 2021, I think. 2020, 2021, I can’t remember when it hit its peak. I think it was 2021. And then since that point it then bottomed out back at 16,000.

Steve Lewit: It was really low.

Gabriel Lewit: So, it went from 67,000 to 16.

Steve Lewit: And everybody said this is the end of Bitcoin.

Gabriel Lewit: Well, they’ve been saying that for a long time, but people that have invested in it in a while have said no, this is normal.

Steve Lewit: They lost a ton of money.

Gabriel Lewit: This is Bitcoin, this is how it works. And so now it’s climbed its way back up to over 40,000.

Steve Lewit: 42.

Gabriel Lewit: 41, 42, it reached a high of 46 just recently. And so it’s on its way back from its point of $16,000. So it’s gained a huge amount in the last year.

Steve Lewit: I actually think it’s 44.

Gabriel Lewit: But this is the point of when I say volatile, it means it has big ups and big downs. And you have to be comfortable with that. Now what’s the goal here? The goal is that something that has big levels of risk, to be able to justify taking that risk, you should have the potential for higher long-term returns.

Steve Lewit: That’s correct.

Gabriel Lewit: All right. If you had high risk and you couldn’t earn more than the stock market, what would be the point for most people? So that’s the idea here, is should you carve out a chunk of your long-term bucket, your long-term portfolio, invest this in a spot Bitcoin ETF or Bitcoin itself. And then just in my opinion, you’d set and forget this for 15, 20 years, or keep dollar-cost averaging a little bit into it. And then you wait to see if the Bitcoin price goes from 44,000 up to a million dollars per coin in the next 10, 15, 20 years.

Steve Lewit: So, I just want to clarify what chunk means. Chunk doesn’t mean 30% of your portfolio. So behind this, Gabe.

Gabriel Lewit: Small chunk.

Steve Lewit: A small chunk, a small chunk. Behind this is when you’re building a portfolio, you want assets in the portfolio that track the S&P that are called correlated assets. And then you want other assets in there that are essentially non-correlated, might be correlated over long periods of time, but you want assets in there that if the market goes up and down, these assets just do something else. And this would be considered a non-correlated asset.

And then the question is, if you believe in it, how much should I put in my portfolio? And the course that I am just about to completed a study of if you took one to three and a half percent of your portfolio and put it in Bitcoin, how that compares with a same portfolio that didn’t have Bitcoin. And what’s really interesting, despite all the ups and downs, it often beat the other portfolio or was almost the same.

Gabriel Lewit: Well, that’s not a surprise, because the whole point of purchasing it is over time it will outperform other more common asset classes like S&P 500 or NASDAQ. So yeah, if you hold onto it for a long enough time and it does exactly that, despite the ups and downs in the middle, you will make more money. So it might be worth a consideration. And what I want to say here today is if you want our help with this, we do have the ability to help you purchase some Bitcoin for your portfolio. We can also help you explore different spot ETFs for Bitcoin.

Don’t go into this world alone. Don’t throw all your life savings into it. Please use small amounts that you could feel comfortable seeing go up and down, and then just don’t worry about it. Let us do its thing. But let us talk through that with you. If you have questions, you can reach out to us at (847) 499-3330, or you can email us and we can chat more through this world of Bitcoin here with you.

Steve Lewit: I would love to, because I think it’s just going to grow and become more important.

Gabriel Lewit: I think it’s worth a second consideration, a second look if you haven’t looked at it in a while based on some of this new news that we just shared with you here today.

Steve Lewit: Well done. I’m glad you explained ETFs though, I didn’t think you were going to get there.

Gabriel Lewit: I was waiting to hear your blockchain explanation.

Steve Lewit: I think I could have done a better job, but it’s so complicated.

Gabriel Lewit: There’s a lot to it, yeah. All right, so let’s switch gears. Let’s talk about the opposite end of the spectrum, as you said earlier, Steve, lazy money. Lazy money is money that you just let sit there in cash typically is how we would define lazy money. And why is it lazy, because you tend to just let it sit there.

Oh, it’s in cash.

Steve Lewit: It’s in my savings account.

Gabriel Lewit: It’s in my savings. It’s building up. I might do something with it, I might not. So it just sits there.

Steve Lewit: I like having it there. I can see it. It doesn’t go up.

Gabriel Lewit: Lounges around.

Steve Lewit: Lounges, or drinks beer.

Gabriel Lewit: It’s got a margarita on the beach, just sitting around being lazy.

Steve Lewit: Yeah, watch the waves come in.

Gabriel Lewit: Now lately, here’s what’s interesting. In the last two years since interest rates spiked really high, your lazy money was being pretty productive.

Steve Lewit: Yeah, it was.

Gabriel Lewit: It was actually being less lazy. It was making year round 5% yield, still is to this day. You can get about 5% or so in a money market. But here’s the problem with your lazy money, it’s going to go back to being lazy fairly soon.

Steve Lewit: In a way I think it is still lazy, it’s just doing better.

It’s still lazy. It’s still sitting there, there’s no goal for it.

Gabriel Lewit: Well, let’s say you have a kid, hopefully you don’t have a lazy kid. Let’s say you have a lazy kid lives in your house.

Steve Lewit: I’m not sure I like where this is going,

Gabriel Lewit: Not doing anything. But then one day that lazy kid just decides to clean the whole house every day.

Steve Lewit: Still lazy, won’t get a job. That’s it, lazy.

Gabriel Lewit: I was trying to think of an analogy.

Steve Lewit: Lazy money is money that doesn’t have a job.

Gabriel Lewit: My kid, he’s eight.

Steve Lewit: He doesn’t have a job either.

Gabriel Lewit: He doesn’t have a job. He doesn’t clean up as much as I’d like him to do.

Steve Lewit: But what do you think of this? [inaudible 00:25:26], lazy money is money that doesn’t have a real job.

Gabriel Lewit: Yes, I would agree with that. Yep, it’s excess. Now, let’s say you have 100,000 in cash and you only need an emergency fund truly of 20,000. I’m just using round example numbers. That would mean 20,000 of that 100,000 has a job. It’s to be your emergency money. Well, the other 80,000 is just being lazy.

Steve Lewit: Yeah, it’s hanging out.

Gabriel Lewit: Okay, you don’t need it for an emergency fund. Let’s say you’ve acknowledged that. You’re not buying a house down payment with it. Maybe you’re already married, so you don’t need a wedding with it. It’s just sitting there. And the question is, what should you do with that excess lazy money, which we all have.

Steve Lewit: Why do we have it? Let’s take a look at that. Why do people have more? Why do they have more lazy money that could be doing better otherwise, but they don’t deal with it, they just want it there.

Gabriel Lewit: It’s two reasons. Momentum.

Steve Lewit: What is that?

Gabriel Lewit: Which says an object in motion stays in motion.

Steve Lewit: That’s true. Oh, yeah. Yeah, great. That’s great.

Gabriel Lewit: And procrastination would be another, and a third might be uncertainty.

Steve Lewit: It makes them feel better.

Gabriel Lewit: So, let’s talk about this recipe. So the money’s just in your account. It’s already got the momentum, meaning it’s in there. You don’t have to do anything. It stays in there, and it just keeps staying in there.

Steve Lewit: I got enough decisions to make. I’m going to just leave it there.

Gabriel Lewit: It’s not hurting you at all to have it there, maybe I’ll make a decision later on. All right, well, here’s the reason that that might be a problem, is because we’ve talked about this before, but interest rates are projected to come down this year. So right now you have the opportunity, if you do in fact identify you have lazy money, you could lock in a certain rate for a certain period of time before interest rates come down, and really put that money to work. Assuming that you decide with purpose that, hey, this is no longer just lazy money, I’ve recognized that I have a purpose for this. I don’t need it. Even not needing it for the while is a purpose, and then you can decide what to do with it, such as lock in a fixed rate for four or five years even.

Steve Lewit: But then I have to be not lazy. I have to go out and get all the resumes from all of the places that are offering high interest rates. And I have to read them, I have to decide on whether I want three years or four years or five years. And you know what? I don’t want to do that. And most people don’t.

Gabriel Lewit: That is a choice.

Steve Lewit: They just ride along with the interest rate, whatever it is.

Gabriel Lewit: So, what we’re trying to get you to do is think further ahead. Because here’s what’s going to happen if you do that? You’re going to wake up this time next year and say, “Hey, I have 100,000 thousand dollars of lazy money,” and it’s going to be making you say 2.5% next year instead of 5% this year. And then you’re going to ask at that time, now you’re going to be like, well, now this isn’t doing what I want it to do. I don’t really need this money. How do I make more than 2.5%? So then at that point though, it might be too late to put it into something fixed or safe or guaranteed and lock in the higher rates that you have available today.

Steve Lewit: To keep it lazy but do better.

Gabriel Lewit: And it’s just interesting. A lot of people that I talk with really want to kick this can further down the road.

Steve Lewit: I just said, it’s good. And if it’s good, why mess with something that’s good?

Gabriel Lewit: Well, it’s interesting. It seems a lot to me like you’ve got the windows open in your house. It’s a nice sunny day. You see way on the distance a couple of rain clouds. You even look at your phone and it says, well, there might be rain in a day or so, but you just say, it’s far enough away. I’m just going to wait, I’m going to wait and see. And sure enough, you get busy, you do something else around the house, it starts raining. And the rain’s coming in through your windows, and then you decide to close the windows once you’ve realized it’s actually raining.

Steve Lewit: Except there’s one problem, they’re stuck open. You can’t close them.

Gabriel Lewit: Well, yeah. So, enough analogies aside, the point is is we don’t want to see you leave money on the table. And there’s opportunities now, opportunities the first half of this year, even opportunities once the fed starts lowering rates to take action. So you’re going to hear us talk about this throughout this year. There’s going to be opportunities for you that we don’t want to see you miss, so we’re going to continue to bring this up.

So the idea is if you identify right now, if you say, how much do I have sitting in cash, and I don’t need that cash for immediate needs? Or even needs in one year or even needs in two years, let’s put that to better use before the rain comes raining in and raining on your high interest rate parade that you have.

Steve Lewit: But here’s what people will often say, Gabriel, is, “Hey, I don’t know when I’m going to need that cash though. Maybe I should just leave it there.” And that’s all part of having a good plan, because if you have a well-designed plan, there is availability of cash in other parts of the plan. So instead of leaving it lazy, you can put it to work. And if you need $50,000 because your car got wrecked or your house burned down, or you had a medical emergency in a good plan, there’s always places to get the cash. You don’t have to sit it and make it lazy so that it’s available, because availability is just a matter of planning.

Gabriel Lewit: So, a good financial plan, we’ll have that all accounted for. We’ll talk about savings, emergency funds, cash reserves, but then after you identify how much you need for those purposes, it’s our recommendation for you that you take the extra money that you’ve got sitting around you dollar-cost average it into the market, you dollar-cost average it into a long-term bucket, you maybe buy a little Bitcoin with it.

Steve Lewit: I was going to say, that’s not the money you’re probably going to use for Bitcoin.

Gabriel Lewit: I disagree. I actually disagree.

Steve Lewit: Actually, you are correct.

Gabriel Lewit: If you follow what we just said, if you’ve identified that you do not need it, you just happen to just let it build up there because of momentum. Okay, you have extra money every month after your paychecks, you sweep it to your savings account and it just builds up. You don’t need it.

Steve Lewit: It’s like play money at that point.

Gabriel Lewit: Yeah, if you’ve identified you don’t need it, take a small amount, buy a Bitcoin ETF. Put it into a diversified, a long-term equity portfolio, but do something with it so it really gets put to use. Because folks, you guys know this. Here’s my last point on this. What does cash typically earn long-term over and above inflation? What’s its over and above inflation long-term return for cash?

Steve Lewit: Zero.

Gabriel Lewit: It’s a trick question.

Steve Lewit: Zero.

Gabriel Lewit: Yes, correct. Cash does not beat inflation long-term. But there’s a lot of people right now because it’s paying 5% are in love with it, saying, “Okay, I’m just going to keep it here.” But that party will come to an end, and we want to make sure before it comes to an end, we’ve repositioned and taken advantage of the opportunities that we’ve got.

Steve Lewit: Absolutely. Cash is important in some instances, but from our view as financial advisors, folks, our job, the way we see it is how do we squeeze every dollar, squeeze more growth out of every dollar you have safely, or within your risk profile and within your plan. But nothing is lazy. Because you don’t need an advisor to show you how to put money in a savings account.

Gabriel Lewit: Well, and I’ll give you one other tip, folks, if you have lazy money in cash, this is a very, very important one. The one that I see people miss all the time. Then we’ve got to wrap our show here for today. If you have lazy money that you don’t need immediately, and in fact, I’d even argue even if you might need it, you could still talk about this strategy. And if you qualify for contributing to Roth IRAs and you have not yet done so, do it before April 15th, before you file your taxes this year, max out your Roth IRA contribution. Open up a Roth IRA account, take say six or $7,000, whatever your contribution limit is, and put it into the Roth IRA for 2023 and even for 2024 in advance.

Okay, so you could take, I’m going to say two couples times 7,000, 14,000, $28,000 of your lazy money. Instantly put it into Roth IRAs, again, assuming you qualify. And now that money, assuming you never need it in the future, hypothetically, let’s say you don’t need it, well, now it’ll grow forever tax-free. But if you miss the opportunity to put those into the Roth’s, or you retire in the future here and you don’t have earned income so you can’t do it for that reason, you can never go backwards to prior years and re-put money into your permanent tax-free Roths.

Steve Lewit: So, one of the drawbacks of lazy money, I think you’re saying Gabriel, is that tax has become an issue that hurt lazy money. In other words, it’s like if you never worked out or you sit on the couch all day long, your body isn’t going to work as well. Well, the same with lazy money is that taxes, it’s not what you make, it’s what you keep.

Gabriel Lewit: It’s the simplest way to move money from cash into cash with a forever tax-free wrapper that there’s no downside to. Even if you move it into a Roth and keep it in cash inside the Roth in a money market fund, you’re still better off. Because if you need the money back out, you just take it out.

Steve Lewit: I knew you were a genius. You just keep amazing me.

Gabriel Lewit: Oh, boy.

Steve Lewit: It’s hard to be him, folks.

Gabriel Lewit: We hope you enjoyed the show here today. We enjoyed talking about Bitcoin and lazy money with you. If you have questions, call us (847) 499-3330, or go to Or email us info at And of course, we would love to hear your questions or comments. Meanwhile, hope you have a wonderful time today. Have a great rest of your week and weekend, and we will talk to you on the next show.

Steve Lewit: Stay well everybody.

Gabriel Lewit: Bye-Bye.

Steve Lewit: Bye.

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