Lazy cash

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I hate lazy cash.

To me, lazy cash is money that doesn’t work at least as hard as a decently performing short term floating rate fund. As of today, the average short term floating rate fund would return around 4.5-5% annually.

Anything that sits in low interest account’s especially due to activity paralysis and status-quo mindset would qualify as lazy cash. Few examples are

• excess money in savings accounts
• excess money in floating rate funds when higher return alternatives are available (lets say the market is at a 15 P/E, then I think an index is a better option)
• money lying in the safety locker at home
• money lying in dead assets like jewellery
• and since I am into photography, now,… I know a few photogs out there equate photography equipment as assets. I wouldn’t qualify them as assets let alone lazy assets. Duh!

Any guy who does his math well would do well for himself by moving his lazy cash at least to a decently managed floating rate fund. If you have been sleeping, act on it today. What you don’t need in next 1 month, move it to a higher returns account.

Of late, I have been too lazy and caught up with other things in life (travel, photography, etc). These coupled with a stock market that has moved out of my comfort zone have meant that I have a rather high % of my money in low-return avenues. Yikes!

But I am pretty happy that I am sticking to my decision of not getting into the stock market when the odds are not strongly in my favor. For now, it should be a decent short term floating rate fund like one managed by Birla Sunlife. Picking dividend option should save a bit more for the ones in higher tax bracket.

One of my goals in financial management is this. Zero lazy cash. Reviewed every month first week. I admit, I have been a bit slack in the last 3 months.

Now, don’t just read this. Go and do your homework. Review your accounts. Dig out your lazy cash. Set them on work. Getting that 2-3% extra will help you in the long run, especially because, small amounts add up!

CAUTION: Now, taking undue risk with such cash is stupidity. And as I said, I am not deploying such money in the stock market, esp the index as I find the P/E above 22 and beyond my comfort zone. Find out your odds of safety. Stay withing your comfort zone! Better safe than sorry!

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