And how you can learn and profit from it
Doctors and Nurses have topped the list of the most trusted professions for almost 20 years. Bankers, Lawyers and lastly Members of Congress being the least.
We rely on and trust this community of medical professionals to, in a very literal sense, keep us alive.
Yet these intelligent educated people, in whom we put so much faith, who have dedicated decades learning and practicing taking care of others including the impact of smoking, choose to commit slow-motion suicide themselves? With one study finding between 15–20% of medical professionals smoking, a staggering proportion.
Doctors it turns out are just like the rest of us. Prone to make poor decisions even though all the logic, evidence and even social pressure are pointing to a different path. We can hardly say Doctors smoke because they are ignorant of the effects.
Just like the rest of us, Doctors are also pretty bad with money despite the fact they make relatively speaking a lot of it. The average doctor makes between $223K and $329K (this excellent article goes into more detail on Doctors and money).
Just like Doctors know smoking is bad for their long term health we all know not managing your finances is bad for your long term financial health but we do it anyway.
The problem is even for high earning professionals, managing money is easy in concept but hard in practice. Even for the smartest, best-educated and most dedicated of us.
Save more than you spend and maximize interest on those savings
Invest regularly in a low cost highly diversified fund and start early as possible
Human nature, behavioral biases and the sheer complexity and work involved in implementing this on a frequent and sustained basis over months, years and decades are defeating the many of the best paid most intelligent people in the country.
So why is it this difficult? should there not be a great opportunity for the financial services industry to help people solve for this? Should there not be more help?
The problem is that the incumbent banks are incentivized to do the opposite. The big banks in the US made record profits in 2018 and likely to the same in 2019. One of the ways they do this is by not paying interest on consumers deposits. The average checking account in the US only pays around 0.03% (and there is over $2tr held in checking accounts — read this for sources and more detail), the average savings account from the top banks pays only 0.02% more. 2 of these pay the same rate for their savings as checking. You can see the data here and in the graph below.
So if the incumbent banks are never going to help as its not in their economic interest to do so, who is? and what is the solution? Clearly it’s going to have to be from a company with no economic incentive to keep the status quo, a company with a vested interest to change the model not retain it. Ironically Goldman Sachs meets that criteria, it’s got no established retail business to cannibalize.
So is Unifimoney a new entrant FinTech firm that is entering the US market in early 2020 with a mobile app-based service that incorporates a high-interest checking account (so no need to move money between a saving and checking account), a credit card and Robo investment platform. Rather than try and teach good behavior or create tools to facilitate it — they do it for you, automating it so that any user effortlessly models best behavior in personal financial management automatically.
With Unifimoney every time you use the credit card and whenever you get deposit interest the money goes into the investment platform. Users are maximizing their passive income today and their long term growth.
It’s actually a lot easier and less complex to help people be more financially fit than it is physically fit as long as their are companies who tie their economic interests to those of their customers.
Early customers of unifimoney will be invited to access the Beta from February and be part of the creation of the service which is slated to be launched in the market in Q2 2020. If you want to participate you can sign up at www.unifi.money.