NerdWallet's Smart Money Podcast - First-Generation Wealth Building and the Truth About Stablecoin Yields

Episode Date: November 10, 2025

Learn how first-generation wealth builders create financial freedom and what stablecoins could mean for your savings. How do you build wealth when you’re the first in your family to be able to do so? And can stablecoins really out-earn your savings account? Host Elizabeth Ayoola and Sean Pyles explore generational wealth-building and the myths and realities of stablecoins in a rapidly changing cryptocurrency environment. Joined by entrepreneurs and fiancés Ronne Brown and Courtney Hale, Elizabeth kicks off the first segment with a heartfelt look at how first-generation wealth builders are redefining what it means to be “rich.” Ronne and Courtney share their journeys from modest beginnings to financial independence, relaying how childhood lessons shaped their values, how they built multiple income streams through entrepreneurship, and the steps they’re taking to continue building generational wealth together. They discuss the power of investing early, using real estate and the stock market strategically, and protecting assets through estate planning and life insurance. Then, investing writer Sam Taube joins Sean and Elizabeth to break down the difference between Bitcoin and stablecoins — and whether high-yield stablecoins are too good to be true. They explore how the Genius Act changes crypto regulation, how yield-bearing stablecoins compare to high-yield savings accounts, and what risks investors should consider before diving in. They discuss how to find a balance between risk and reward in crypto-based savings options, how stablecoins actually earn yield, and why traditional banking products still offer peace of mind for the risk-averse. Best High-Yield Savings Accounts of November 2025 https://www.nerdwallet.com/banking/best/high-yield-online-savings-accounts  The Costs of Being Unbanked (and How to Minimize Them) https://www.nerdwallet.com/banking/studies/data-unbanked  Crypto staking: What it is, how it works, calculator https://www.nerdwallet.com/article/investing/how-crypto-staking-works  Want us to review your budget? Fill out this form — completely anonymously if you want — and we might feature your budget in a future segment! https://docs.google.com/forms/d/e/1FAIpQLScK53yAufsc4v5UpghhVfxtk2MoyooHzlSIRBnRxUPl3hKBig/viewform?usp=header In their conversation, the Nerds discuss: financial independence, building generational wealth, multigenerational money mindset, family legacy planning, breaking the cycle of poverty, entrepreneurship strategies, business ownership, side hustles, wealth psychology, mindset shifts, money trauma, minority entrepreneurship, real estate investing, stock investing basics, portfolio diversification, passive income streams, estate strategy, life insurance for families, trust and wills, crypto investing, digital currency regulation, crypto yield risks, yield-bearing coins, decentralized finance, DeFi savings, crypto-backed savings accounts, tokenized assets, stablecoin interest rates, inflation hedge, risk management, safe investing, traditional bank safety, asset protection, long-term wealth growth, market volatility, risk versus reward, financial resilience, and balancing traditional and digital assets. To send the Nerds your money questions, call or text the Nerd hotline at 901-730-6373 or email [e-mail]. Like what you hear? Please leave us a review and tell a friend. Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to NerdWallet's Smart Money Podcast, where you send us your money questions, and we answer them with the help of our genius nerds. I'm Elizabeth Ayola. Now, on this episode, we'll be answering a listener's question about how to plan for retirement using accounts like IRA or 401Ks. But first, we're bringing you part one of a two-part series about first-generation wealth builders. Now, these are individuals or trailblazers, as I like to call them, who are the the first in their family to begin accumulating wealth. And that's something I'm personally on the journey to doing right now. So I'm excited to have this conversation. To kickstart the series, we have Ronnie Brown and Courtney Hale here. They are engaged entrepreneurs who are both first in their family to build wealth. Welcome. I'm excited to be here.

Thank you for having us. Of course, excited to chat with you all. Now, it wouldn't be right if I didn't give you both a proper introduction. So we'll start with Ronnie. She's the founder of Girl CEO, Herlistic, and the author. of from mopping floors to making millions on Instagram. Now, Ronnie turned minimum wage income into a seven-figure salary within a few short years. She's also equipping women nationwide on how to be the CEO in their business, in their

lives, and in their homes. Now, we have Courtney, on the other hand, who is a former wealth manager turned full-time entrepreneur, and through a company called Investing Uncomplicated, Courtney helps people to invest and create generational wealth. also has a business called Super Money Kids Co, which I think is awesome. And with this business, he partners with schools and organizations nationwide to equip youth with financial literacy skills. So y'all both have quite the resume there. Thank you so much. So I like to start with an icebreaker just to kind of get the conversation started and learn a bit about

both of you. So I'm going to give you different ice breakers so that you don't have time to think about your answers, okay? All right. So we're going to. We're going to be a bit about. We're We're going to start with you, Ronnie. So when I say the word wealth, tell me the first thing that comes to mind. Freedom. Why? I believe that true wealth is being able to have the freedom to live life on your own terms, wake up when you want, travel where you want, spend time with the people you love.

That's truly just my definition of freedom. I agree with that. I think that's one of the words that come to mind for me as well. All right. Now, Courtney, if your finances were a color, what color would it? be. Why you couldn't give me the first question? I'm saving the best for last. Oh my goodness. This is such a hard. See, I want to say green, but I feel like that's the typical

answer, right? Like, of course your money is green. Could you be a little bit more creative? Let me say it's, I'm going to say black, all right? And I'm going to say black for two reasons. Number one, you always want your money in the black. You want your money growing. When you think about wealth, you want to see your net worth increase, right? So that's staying in the black versus being in the red where things are going down. But I'm also going to say black is in black wealth because what it looks like for black people to build wealth, it looks different in a lot of cases in terms of the risk that you can take, the opportunities you have to recreate yourselves, the hurdles that we have to overcome. So if my money was a color, I'm going to say black for those two reasons.

Love that. We got there in the end, and I love your answer. So I'm black. Okay. All right. Now that we've broken some ice, I want to get into both of your backgrounds briefly. So I want to know what kind of socioeconomic background both of you grew up in and basically how it influences your views on money. And we can start with you, Ronnie. So I would say that growing up, I had different types of. types of experiences, I would say. My mom was very hardworking, very responsible, very paying the bills on time. My dad was very financially irresponsible a little bit. And I used to remember him and my mom kind of fussing about that a lot. My mom was like always ready to pay bills

on time. And my dad is like always, you know, he has something going on, right? And then I had my my grandma, who was my father's mother, who was very, very financially educated. She had a lot of stock. She had a lot of real estate. She had a lot of land. And she was the person in the family that I really just admired. Growing up around that, I think that it made me be able to see the difference between what happens when you are responsible with your money versus when you're not responsible with your money. I saw my dad go through a lot of financial stress. I also saw my mom start her life over because of who she married and who she chose. So I got to see things through different views and different lenses. And it really shaped my decision making as I grew older. I knew

that I wanted to be successful. I knew that I wanted to build wealth. And I knew that I wanted to on my time, and I wanted to really have freedom to live life on my terms. Courtney, can you tell us a bit about your socioeconomic background and how that influenced your views on money? I grew up in a family that was really, really loving. They were very supportive. They worked hard. They just didn't have much. And they really, like my mom and her siblings, really invested a lot in their children because they wanted their children to live better lives. than what they did. My neighborhood, there wasn't conversations about wealth. There weren't entrepreneurs. It was just a lot of people just trying to do their best. And that comes with

some challenging times, right? I have some very vivid memories of being a kid and parents not being able to pay bills or having moments where the lights were out or my mom and I live with my grandparents until I was about in the fifth grade. And for me, as I got older, obviously when you grow up without certain things, socially that can be challenging. And so I remember having friends who would get new sneakers or would get a new car when they turned 16.

I didn't get to experience any of that. But what those experiences did for me, It made me, I could never be broke again. You know, so I wanted to take risk. I wanted to talk to people who were successful, who made money. I wanted to go out and figure out how I could create a better life for me and my family. So not only I wouldn't have to experience that, but, you know, when I got married, when, you know, I had kids, they wouldn't have to experience some of the things that I experienced growing up.

And I think in some ways I have some unhealthy beliefs and relationships as well because of the trauma that comes from that. But that absolutely has inspired me to pursue wealth and make better decisions with my money. So now you guys have both given us some background into kind of your story of origin. And I know I briefly introduced what you do earlier, but can you tell me where you are now? So what are you both doing that's helping you on this path to generational wealth? Ronnie, you can start. And so I own two companies. One of them is an educational platform for women.

We empower women to be the CEOs of their businesses, their lives, and their homes. And through that program, we educate women on how to start, grow, and scale their businesses to new heights. We have different experts come in and educate the women on different topics. We do meetups. We do different retreats and things of that nature. And then my second company is called Herlistic, which is a plant-based beauty and wellness brand. And we provide women with safe, toxic-free products to help them prioritize their personal care.

And then, Courtney, what's your main source of income? What is your big money maker? My company, we do financial education. We teach everyday people to invest in the stock market. I also have a company, the Super Money University, that helps organizations incorporate financial literacy into their programming. Growing up broke, I'll say, you know, I developed an obsession with money, and I started my financial education work after my time as a wealth manager. I started with kids. The way that we were teaching kids worked out really, really well,

and the pace was even good for adults. And so we started teaching adults how to manage their money better as well. Entrepreneurship can definitely be risky business, but I bet it's so rewarding when it is fruitful and you make a lot of money from it. And it makes me think about inheritances, right? So that's a big component where some people are able to start building generational wealth. And I found that on average, American households will inherit about $46,200, according to the Federal Reserve data from 2020. But I do have to mention that that number is inflated by the top 1% and 10% of households by wealth.

But that said, first generation wealth builders usually don't get that. financial boost and they have to build their wealth from scratch. So I want to ask both of you, what did not having an inheritance mean for you? Not having an inheritance meant that I had to work my behind off. I spent a lot of time working. I actually started college and then I dropped out because I was a team mom and I needed to create income from my son. So not having that inheritance was really understanding that I needed to 10x my work ethic. I needed to work hard. I need to wake up early. I needed to go to sleep late. I needed to catch up. So for the last 15 years of my life, I would say that me not having a inheritance created a goal for me to create one for my children

so that they can inherit real estate and a successful company and be able to leverage the work that I've put in over the years. What about you, Courtney? Yeah, you know, they say what you don't know doesn't hurt you. You know, growing up, I didn't know what an inheritance was. I didn't know that people pass money down to their kids and give them a head start. So it never became something that I looked at as a disadvantage. You know, like I said, I come from a family of people that work really, really hard, and what you want in life, you work for, you believe, you pray for, and you get it. That's right. I myself did not get an inheritance. I got an empty checking account once I became of age. So it is, but it can be a great way, right, to give you a head start, like you said,

Courtney. Now, I was excited about interviewing both of you because I know when it comes to building wealth, two can be better than one, and you can do it a lot faster. So it's wonderful that both of you have already started your journeys individually, and now you can come together and continue your mission. So briefly tell us how you guys met, first of all. We met at a retreat for CEOs outside of Nashville, Tennessee. So I am. originally from Nashville. Ronnie is originally from D.C. So she actually flew from D.C. to outside of Nashville for this retreat. We were both invited by friends. Neither one of us wanted to go for different reasons, but we got there. I remember being there the first day. Ronnie got there

the second day, and I walked in late. And I remember seeing this amazingly gorgeous woman that I just wanted to speak to and talk to and I would work the rest of the afternoon to get her attention and she did not notice me whatsoever. At the end of that particular day, they had a social event and I remember going up to her at the social event and introducing myself and just asking her, you know, she wanted something to drink. She had a pineapple and Sprite. I went and bought her a drink and came back and thought this was going to be my opportunity to have a conversation with this woman, but she took my drink and walked off. But I'm super persistent, and I found her, and we would have conversations, and I wasn't the only man trying to talk to this woman. And there

was another man that came up trying to talk to her, kind of similar same time. And I kind of grabbed Ronnie by the hand and stood in front of her and told that guy that Ronnie was my girlfriend. friend. No, you did not. I did. Absolutely. We talked the rest of that night and we have not stopped talking since. I love a good love story. So now you guys are here. I want to know pivoting back to the finances part because that's a big part of a relationship and I think the success of any kind of relationship, finances. So can you talk a bit about how you are building wealth together? So what are some things that you're doing? So we're a same. The best thing about this is that I have an expertise in one area, which is like marketing

and growing companies. And he has an expertise in a lot of things that I'm just not familiar with, like numbers and finances and investing in the stock market and real estate investing in all of the things. So yes, we are doing things together, you know, buying properties together. and we help each other in our businesses a whole lot. And it's really been a blessing because it's open my mind and having someone who can really not just agree with you but give you ideas and give you strategies,

it's just been beautiful for me. I love that you're able to partner with Courtney and you guys are able to build together. But before you met Courtney, what were kind of the strategies you were using to build wealth on your own? Some of the things that I was doing was building my personal brain.

and, you know, selling products and growing my community. But I was doing a lot of B to C business. One of the most valuable things that I've learned from Courtney is understanding that there is B2B business that you can tap into and that there is money there and there are partnership opportunities. And he really pushed me to look at things a little differently. Another thing that he has really added to my life is being able to understand. that the stock market is not just for later, okay? You can make money in the stock market now. So changing my perspective from saving to investing has just been such a big eye-opener now because most of the time, you know, that I've been an entrepreneur, I've been like this saver.

And I think you bring about a key point because some people think about wealth and they think it just means having a lot of money. But if you have money and you save, that's awesome. But if that money is not invested or compounding, then there's a limit to basically how much your wealth can grow. And when we talk about generational wealth, we're hopefully trying to pass this on, you know, across multiple generations. And you need, you know, robust amount of money to do that. So Courtney, you come from a financial background. So in what ways were you building wealth? We think about what matters most of us, like peace, time with our families, being able to travel.

And so we design our lives in a way that allow us to do the things that we care about the most. The money is important. Anytime we make money, we know we're going to put it into the stock market. We are interested and very intrigued by real estate. So that's definitely a part of our wealth building strategy. But ultimately, you know, we do those things so that we can have more time with the people in the places that we care the most about. How can we spend more time with our parents and be able to sit down with our kids as they grow up so fast, you know? And Ronnie has really helped me put into perspective like your life design.

How do you want to live? I think one of the things that I've realized in the time that Ronnie and I've been together, you know, is not actually the money that makes me happy. It's that I can wake up and I can spend time with my fiance. I can be there with my kids. Our daughter just got out of the hospital for two months. She had sickle cell disease. She had a bone marrow transplant that has cured her sickle cell disease. Oh, wow.

That's awesome. We've been able to be at the hospital with her every day. And I think about the times where, you know, I was working in corporate America, that would be very, very difficult, okay, to be with a family member in the hospital every single day. And if you work for an employer that is very generous and give you the time that you need to take care of family, you still go back to work with kind of like this burden where he's kind of like, I owe my employer. And now, like, I'm beholden to do everything that they, they asked me to do. And it's just a really, really tough place to be in. We hadn't had that, right?

And we haven't been able to work as much, all right? We haven't made as much money as we probably normally would during that time, but we don't care because what matters most is that we can be with our daughter. And so our life design has been really, really important. Big part of generational wealth, you're right, are the intangible things. And, you know, many of us are making the money, going back to Ronnie's first word that came to mind for the freedom that we get to, you know, create through that wealth. So I just want to pivot briefly back to the strategies that you're using to build wealth for people listening who are maybe on that journey and trying to start their own path to generational wealth.

So can you tell me a bit more about your strategies in terms of the steps that you're taking and then kind of what your short, medium, long-term goals are for your wealth building? The first part is holistic Ronnie's plant-based skincare line has so much potential. It's really one of those businesses where we could actually grow it and pass it down to our children. We've had conversations about maybe selling it one day. So really putting the resources into that business. So it can be a source of wealth for us at some point. We own a pretty significant amount of real estate.

Some of that real estate, we wanted to create income for us, which will allow us not to have to work. at some point. We have some real estate that sits on land that we want to develop. You know, one instance where we want to build some town homes and then rent those to create more income. We have another property where I don't even know what we want to do with it yet. There's another property that we own that we rent for the income, but we actually see that as an opportunity to potentially sell, then use those proceeds and actually invest that in the stock market for the long term. So lots of investing and reinvesting happening. Yeah, you invest for your money to grow and for you to reinvest it. That's our strategy and that's what we do. We're really,

really good about identifying great stocks to invest in for the long term. We do like ETFs as well. I really believe if we never sell a business, right, I really believe that our best opportunity for more wealth is through the stock market. I'm definitely on the slow and steady route to building wealth. So consistently investing is usually a good strategy. Now, one of the last questions I have for you all is, you know, a big part of generational wealth is ensuring that you have strategies in place so that it continues throughout future generations. And a lot of the time, effective estate planning is a big part of that. Do you guys have any trust or any strategies that? you're putting in place, you both have children, to ensure that that wealth is transferred down.

Yeah, he doesn't play about that. So if I can give you just a small peek into... High level. Yeah, just a peek into the background of his life. We were both formerly married and his wife, his then wife, passed away from a medical condition, a heart transplant, and it was totally unexpected. And I think since then, he has not played around with life insurance and just all of the things, having all of the things in place and wills and things of that nature. So when it comes to retirement and what happens when we're no longer here, I think that has been such a priority for him just because what he has had to endure an experience as a single dad, you know, being left with his baby girl.

and her also having a medical condition. So he does not play when it comes to all of the ducks being in a row. That's amazing. And Courtney, do you use a tax professional or estate planning attorney? What have you used to kind of make sure you have those things in place? All of the above. So we have an estate attorney. We have a business attorney.

We have CPAs. Yeah. A whole team. We have a team, and you have to have a team to make sure things are done the right way. I know we live in a very, like, DIY society now, and there are all of the sites and things that you can utilize. And some of that is really, really helpful for sure, but having somebody that you can actually ask a question or having an expert that can actually show you a better way to do something is invaluable. We take advantage of it, because you don't want to mess these things up. I know better than anybody that tomorrow is not promised, no matter how you feel today,

no matter what you look like, what you have, you can have it all going on, and nothing bad ever happens, and it can change. And so you have to prepare because your family suffers if you don't do it the right way. And on that note, I have one more question. I'm going to shoot it to you, Ronnie, which is we're going to daydream a little bit, How will you know when you have achieved generational wealth? What will that look like for you? So we're at the finish line of achieving generational wealth.

What does that look like? So I am sitting on my beach front property. Let me visualize this for you. I am drinking a cup and the cup has lemon and strawberry and watermelon's floating around. I look to my left and I see all my fruit trees growing. and my garden is there. There's me and my kids and my mom. And, you know, they are just coming to visit

because none of them live with me anymore. And then I look down at my phone and something tells me to just go on social media. And then I look down and I realize that I cannot even find the app anymore because I'm not even on it. I've deleted myself from it. I've completely just disappeared. And I'm just being present in the moment.

And life is good. I'm checking my portfolio. And the stock market is making me over six figures every single year. And I'm just being present in the moment. That sounds like freedom, Ronnie. And I think that's the perfect note to end on. Beautiful. Thank you, Courtney and Ronnie,

for sharing your stories, your journey, and we wish you all the best, please. I'm going to check in in another, I don't know, 10 or 15 years to see if everyone moved out your house. Check in five. Check in five. Check in five years. Love that. Love that, love that.

Thank you guys so much for coming on. All right. Thank you. Thank you. If you're thinking about how to build generational wealth or the best strategies to use to increase your income, we nerds are here to help. Leave us a voicemail or you can. send us to text on the nerd hotline at 901-730-6373.

That's 901-730 N-E-R-D. All righty, next up, we're going to talk through the difference between Bitcoins and Stable Coins and also whether you should be investing in crypto at all. Stay with us. Today's episode is sponsored by NerdWallet Wealth Partners. Everyone knows having a personal trainer helps you stay in shape, right? Well, NerdWallet Wealth Partners is like a personal trainer, but for your money. It's a financial advisory service with real people, not just an algorithm.

They'll build a personalized financial plan, manage your investment portfolio to match your goals, and help you navigate expected and unexpected life changes along the way, like planning for retirement or having kids. Advisors make it clear what you can afford today, from daily expenses to international trips. And they show how much to set aside for tomorrow, so you can keep moving toward financial independence. With NerdWollet Wealth Partners, you don't just get a one-time plan. Advisors meet virtually as often as you like, once a year, every quarter, or whenever life changes. Think of it like regular training sessions. They adjust the plan, hold you accountable, and make

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Be sure to use that URL so they know you came from smart money. One more time, that's NerdWalletwealthpartners.com slash smart. We're back in answering your money questions to help you make smarter financial decisions. This episode's question comes from George, the father-in-law of smart money's marketing strategist, Cody Gough. Here it is. What are the distinctions between stable coins and Bitcoins? My understanding is that stable coins own through crypto exchanges can offer interest rates of at least double what banks can pay on cash deposits. Is this correct?

Again, this comes from George, Cody's father-in-law. To help us answer Cody's father-in-law, George's question, we are joined by nerd wallet investing writer Sam Talb. Welcome back to smart money, Sam. Great to be back. Now, let's start with some definitions, since that's the core to George's question. Sam, can you explain what a stable coin is? I'm guessing it has nothing to do with horses. And also what a cryptocurrency is, since Bitcoin is just one type of cryptocurrency. Let's start with cryptocurrency. Cryptocurrency is a type of decentralized digital money. Ordinary money, which crypto people sometimes call fiat money, is issued by governments and they control the supply of money and enforce anti-counterfeiting laws. That's why it has value.

Cryptocurrency, on the other hand, is created and counterfeit-proofed by cryptographic computer algorithms without the need for a central authority like a bank or a government. Now, Bitcoin and Staplecoins are both types of cryptocurrency. Most cryptocurrencies, including Bitcoin, have a market price in dollars that varies over time, and sometimes it swings pretty wildly. Stablecoins, on the other hand, are cryptocurrencies whose value is pegged to a conventional currency, typically the U.S. dollar. Stable coins like Circle and Tether, to name a couple of the biggest ones, generally maintain a market price of $1 per coin, sometimes plus or minus a cent or two.

That's definitely a lot cheaper than Bitcoin. I mean, a dollar. Yes, it is. So is one better or safer than the other? So stable coins, in theory, are a better stand-in for conventional money than older cryptocurrencies like Bitcoin. People generally want money to have a stable value. If it swings wildly between highs and lows, as Bitcoin so often does, that can actually create a disincentive to spend it. Stable coins solve this problem by fixing their price to the dollar or another fiat currency. Variable price cryptocurrencies like Bitcoin, on the other hand, are more popular as speculative

investments. Those wild price swings make them kind of impractical as payment methods, but you can make a lot of money or lose a lot of money trading those price swings. We should note that even though stable coins purport to be stable, this has not always been the case. And is it currently the case, though? That's a good note. In the past, certain dollar stable coins have had scandals that have caused their prices to diverge pretty sharply from one dollar. These scandals often involve the stablecoin issuer doing something sketchy with their cash reserves that back the stablecoin. Well, there has been some regulatory news in the world of crypto and stablecoins.

Over the summer, the president signed the Genius Act, which creates a licensing and regulatory framework for stable coins, among other things. So can you outline how this act changes the crypto landscape and what it means for regular folks who might be interested in dabbling in stablecoins. An important provision of the Genius Act for consumers is that it requires stable coins to be backed one-to-one by dollars or certain cash equivalent assets like treasury bills. In other words, stablecoin issuers have to have exactly the same amount of money in the bank as they have stable coins in circulation. This is an important piece of mind thing because as we talked about

in the past, some stable coin issuers have gotten in trouble with regulators and with investors for using the funds that they claim are backing their coins and investing them in risky ways to try to make a profit on the side. If you're going to buy these coins that are supposed to be crypto equivalents to the dollar, you kind of want them to be fully backed by dollars. You don't want them to be just sketchy IOUs. And this new law also imposes new licensing requirements and auditing requirements on stable coin issuers to make sure that they're reputable financial institutions in good standing and that they're fully compliant with laws against money laundering and sanctions evasion and things like that.

This too has been an issue for stable coins in the past. Tether once again has gotten in trouble before for being implicated in people using their cryptocurrency to do illegal stuff. Now, it's worth mentioning, George asked about the yields that some stable coins pay. Not all stable coins pay yields, but some of them do. One potential downside of these new regulations is that they could lower some of the yields that you can earn by investing in stable coins. Well, Cody's father-in-law, George, is interested in earning interest on this. stable coins. And NGL, also known as not going to lie, I wasn't familiar with this before during research for this episode. But hey, I learned while doing research that you can, in fact,

earn interest on some staple coins. And these are called yield bearing stable coins. Now, Sam, how exactly does this work? And what kind of yield are we talking about here? I mean, a lot of high yield savings accounts can get folks a rate of maybe 3.5% or even 4%. So is a yield-bearing stable coin getting people a much better yield on their money? I'm glad you brought up high-yield savings accounts because the way that these yield-bearing stable coins work is conceptually kind of similar. When you put money in a savings account, the bank isn't actually keeping those exact dollars in your account. It lends them out to other customers and it earns interest on those loans and it shares that interest with you.

yield-bearing stablecoins do a similar thing. When you deposit money on them, they use it to issue crypto-based loans, or they put it in crypto-staking programs, or they invest in yield-bearing securities like bonds, and they share those returns with you. As of today, the yields on some stablecoins are currently a little bit higher than what you can get in a savings account. I don't know about double, but it's a little bit higher. Two of the biggest yield-bearing stable coins, S-U-S-D-E and USDS, currently pay APYs of 5% and 4.75%, respectively.

For comparison, the highest yielding savings accounts in NerdWallet's best high-yield savings accounts round up, which you can find a link to in today's episode description, currently pay 4.51%. However, both of the stable coins named above generate yields by investing in somewhat risky things like crypto-based loans or by investing in other yield-bearing stable coins, and that might not be permissible under the new Genius Act rules. Once those are fully implemented, the yields on these things may drift down to the 3.5% to 4% range, because that's what treasury bills pay. And under the new rules, treasury bills may be just about the highest yielding thing that stable coin issuers will be allowed to invest in. Well, speaking of risk, there are going to be some risks to having your money in a stable coin like this. One that comes to mind is liquidity. People might not be able to get out their money as easily as the money they would have in a high-old savings account, for example.

Can you think of any other risks that folks should be aware of here, Sam? Liquidity is definitely a concern, especially if there's some kind of crisis, in whatever the stable coin is invested in, and if a lot of people try to pull their money out at the same time. In a scenario like that, there could also be a risk of not getting the promised yield or even of not getting your money out at all.

We talked earlier about how there are some conceptual similarities between yield-bearing stable coins and high-yield savings accounts, but one important difference is that stable coins have a lot less guardrails. The federal department insurance corporation does not cover cryptocurrency, and there's less regulation on cryptocurrency

in general than there is on the traditional financial system. Now, the new regulatory requirements of the Genius Act could reduce these risks somewhat, but yield-bearing stable coins are still not going to be as safe as a conventional bank account. There's still going to be no insurance, for example. Got it. So we tend to be a pretty risk-averse bunch here on the Smart Money podcast, and I'm not about to put my money into one of these cryptocurrencies, but there has to be some use case for putting your money into yield-bearing stable coins could be a good idea. What do you think, Sam? Well, more than 5 million U.S. households do not have bank accounts, according to the latest FDIC data, which is from 2023. Nerdwallets chief

economist Elizabeth Renter wrote a really great article a couple years back about some of the costs of being unbanked. One thing that actually isn't mentioned in that article is that it's really hard to grow your money if you don't have a bank account. Crypto, for better or worse, is much less paperwork heavy than the conventional financial system is. So there's a possibility that yield-bearing stable coins, especially with the new protections introduced by the Genius Act, could be a viable alternative to savings accounts for people

who can't open a bank account for one reason or another. Do you have any other thoughts you'd like to leave our listeners with if they are considering trying to get a yield from their crypto? Stablecoins bill themselves as crypto equivalents to regular currencies like the dollar. Yield-bearing stable coins bill themselves as higher-yielding crypto alternatives to savings accounts. But they get those higher yields by sometimes doing risky stuff with their reserves that savings accounts are not allowed to do. The Genius Act may crack down on that risky stuff, but in the process, it may drive down stablecoin returns to about the same level as

what online high-yield savings accounts pay. Now, if you're interested in earning passive income from your crypto investments and you're okay with some price volatility, that is, you don't care about your crypto-staying level to the dollar, crypto-staking may also be worth looking into. Staking is a feature of certain cryptocurrencies like Ethereum and Solana, where new coins are created and paid out to holders who lock up their crypto for a certain period of time. I'm not going to get into the details of how crypto staking works here, but if listeners are curious, they can check out our crypto staking article, which I actually just updated with a calculator that shows you how much you can earn with staking and how much

you might own taxes. You can find a link to that article as well in the description of today's episode. So if stable coins are like the high old savings account, staking almost sounds like a certificate of deposit. Isn't that a good analogy? Kind of sort of. You could also maybe compare it to dividends in that there's a little bit more uncertainty as to how much you might make on staking, but there's also the potential to earn more than you would in a traditional kind of interest-bearing savings vehicle. Yeah, and I think it's good to underline that whenever you are, quote-unquote, investing, we're hoping to get a yield from crypto, there's going to be more uncertainty than if you're

going with traditional banking products. Definitely. It's not for the risk-averse, it sounds like. Yes. Well, Sam, thank you so much for coming on and explaining all this for us today. Of course. Always happy to be here. That's all we have for this episode.

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