You may have heard the saying, “Don’t work for your money, let your money work for you,” but what does that really mean? When it comes to personal finance, it means taking action to avoid having “lazy money.”
The term lazy money refers to funds you’ve earmarked for retirement that are not actively working to generate returns. One of the most common examples of lazy money is cash that’s sitting in a low-interest savings account, earning minimal interest. It may not seem like a big deal, and you might even feel you’re being “safe” by having that extra cushion, but lazy money can hurt you financially, limiting your ability to grow your wealth.
