Brian Dress, CFADirector of Research, Investment Advisor, Left Brain Wealth Management, LLC · Wealth Strategy for Corporate Executives & High-Net-Worth Investors | Concentrated Stock & Equity Compensation Planning | Director of Research | CFA | Left Brain Wealth Management

Stop Letting Cash Sleep: Why Low Bank Yields Are a Joke Compared to Income Securities

27 Sept 2025 · 0 min

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In this interview segment, the host (Speaker A) challenges Noland about the futility of keeping cash in bank accounts that offer near‑zero returns—0.07% on checking and under 0.5% on savings as of July 2025. Noland explains why the investment team targets a 7% yield on income‑focused securities. He cites three reasons: the Rule of 72 (a 7% return doubles money in about 10 years), a smoother risk profile compared with the volatile 10% historical equity market returns, and the ability to outpace inflation (≈3%) by more than double. The discussion positions 7% as a “magic number” that delivers growth, stability, and purchasing‑power preservation, making it attractive for high‑net‑worth investors who are uncomfortable with equity volatility. The segment ends with a call‑to‑action to download an exclusive investment booklet on income securities for high‑net‑worth investors.

So, Noland, if you keep your cash at the bank, it doesn't make anything. We're talking about 0.07% in July 2025 in the average checking account and less than 0.5% in the average savings account. Horrible. At the same time, there is a group of securities that have a yield of 6, 7, or more percent. Talk to me about the income target that we look for in income securities, why it matters, and how we approach that.
7 is the magic number. We have an income— model income portfolio is about 35 names in it, and the, uh, there's a big benchmark to get into it, but the number we're looking for is 7. Why is the 7% important? Why is it the magic number? Well, if we use the rule of 72, if I'm getting 7% on my money, even if it's a consistent income flow, at the end of 10.2 years, my money should have doubled. And that's why that's really, really important. The other reason the 7% is important is generally if we're investing long-term in the stock market, Markets, this history tells us we can expect a 10% return over time. We're just going to have significant volatility, a couple corrections a year. You're going to be white-knuckled a couple times. Nothing you can't stand, but some people really can't take it. And so income securities at 7% instead of 10%, instead of doubling my money on average every 7 years, I do it every 10. It's just a smoother ride where I don't lose sleep. In a lot of cases, for a lot of people, that'll make them hit the yes button. 7% is a really important number. And the final reason is inflation. Inflation is about 3%. We say you need to get at least inflation to keep up with the cost of living. 7% gives me double the inflation number, more than double.
If you want to know more about how we look at income securities, download our exclusive investment booklet for income securities for high net worth investors.