The Money Button

This is an idea I've been kicking around for a while. It's partly inspired by a chapter of Dan Arielys book Predictably Irrational, which I highly recommend. Prof Arielys talks about his attempts to convince a credit card company to adjust its strategies to help consumers stay out of debt as opposed to getting buried in it. They didn't take his advice; it seems to me they have much more incentive to turn people into annuities with debt then to compete effectively with one another. If credit card companies started competing with one another on NOT being enslaving debt machines, the margins of the industry as a whole would plummet. So this food for thought combined with my recent personal broker problems got me thinking about consumer advocacy, the financial industry and my own irrationality about saving and investing.

I asked myself who in the financial industry is the natural friend of the average Joe consumer. Who has incentive to see consumers with little debt and ample savings? The natural answer seems to be small banks and non-institutional investment firms. These folks make money only as long as they have accounts with money in them.

The money button is my way of trying to get these two groups to more effectively address a mutual problem. The firms want more money in their accounts; Americans need more money in their accounts. And there are some serious psychological barriers to long term investing.

So much painstaking time and effort has been put into leveraging human irrationality to get people to spend more (its called marketing). The Money Button is my attempt to use some of the same irrational tools (impulsiveness, competitiveness etc) to get people to do the most rational thing in the world. Save.

Im still trying to develop this idea. Im confident that the technological problems are surmountable and I have an idea of how one would go about that (although Im certainly not a technology guy).

What do you think?

Category:

Science & Technology

Tags:

• Dan Ariely
• predictable irrational
• debt
• consumer advocacy
• rationality
• saving
• investing
• roth IRA
• behavioral economics

[KirkMcLoren]

inflation is a strong incentive to do something besides save

[Keylimedelight]

@KirkMcLoren I totally agree. I suppose I'm fusing the ideas of saving and investing interchangeably here.

[winneagle]

Is there a supplement I can take so I can hope to be as smart as Mike Grace one day?

[Keylimedelight]

you know it's actually extremely ironic that you should say that. look for my next video...

[superman9905]

What are you doing for work right now?