Gauging The Middle Class With Debit Card Fees

As I hear the news of Bank of America’s new $5 fee for debit card purchases, it got me thinking about the class hierarchy of credit and debit cards.

Credit Cards: If you have a great credit score, pay off your bill monthly, you can get a “wonder card” with low interest, reward points and all kinds of perks.  People who have these cards  have more than a steady income or paycheck.  These cards are targeted toward upper middle class professional.

Prepaid Credit /Debit Cards: If you have a bad credit score, no bank account, then you have prepay first to get credit card.   People who have no bank account are called the “unbanked”.  Plastyc, who presented a few weeks ago at Finovate, has a debit card for the unbanked  called the UPside card that also encourages users to save money. These cards are targeted the poor and/or immigrants who have not opened up an US bank account.

Regular Bank Debit Cards: People with bank accounts, but either prefer to use debit cards instead of credit cards or they may not have a credit card.  Or they don’t have one with low interest so the credit card is used sparingly.  I equate this group with being the middle class.  Debit cards have been a lifesaver for the middle over the last  twenty years. It has enabled people to make big purchases without affecting their credit. In fact, debit cards has been a boon to consumer spending.  Five dollars a month may not seem like a lot of money, but banks are pretty laying the gauntlet and saying, “We only care about the rich people”.  I am making generalizations, but if all the big banks start charging debit fees, then middle class consumers will cut back on spending with debit cards and may greatly reduce spending altogether.

 

 

#Finovate Day One Highlights

finovate swag

When I attended Finovate for the first time two years ago, it seemed like everyone was gunning to be next Mint.com. Mint made having a clean design and clearly defined dashboard to be a priority for any personal finance management (PFM) application.  PFMs are moving beyond the dashboard that only shows what happened with users’ money.  Today the goal is to provide users with proactive money tools to save more, spend wisely and invest easily.

To that end, here are some of the presenting companies of note:

Betterment. I wrote about Betterment a few months ago, and their new feature is the ability to add multiple goals to your investment account.

Kabbage. I missed the presentation but talked to them afterwards, and I am very impressed with what Kabbage is doing. If you are a small business owner, then you know that retail banking are not keen on loaning money to small mom and pop businesses. Kabbage makes working capital loans to small businesses quickly and easily. The extra bit they do is there “Social Klimbing” which gives small businesses additional access to capital based on social network activity.  [This is like Klout for small businesses and another good reason for small businesses to engage on Facebook and Twitter.]

Fraud and internet privacy is something everyone is concerned about. BillGuard is a free service that sends you alerts akin to spam alerts to warn you of possible fraudulent charges on your credit card. MyId is a product owned by Experian helps you manage your social networks and online identity. Think of it as like a combination of a “Google Alert” on your name and reputation management. It can also detect if someone is stealing your identity online.

Enabling mobile payments is pretty popular these days with everything from Paypal, Google Wallet, Square, Venmo. I don’t know which one is doing it perfectly, but the important thing is to get the merchants on board. That’s why I am interested in Modo Payments. They have facilitated easy merchant onboarding and I love that Modo is platform agnostic. It works with SMS, Android and iPhone.

Lastly, Yodlee is like the Amazon Cloud Server to many financial applications.  It is not a cloud server, but Yodlee is the platform that many innovative financial tech companies are using to develop their applications.  The news from Yodlee is that many of the major banks are going to redesign their online banking sites to make them more user friendly with better UX design and a more personalized experience based on the customer’s financial goals.  I personally would welcome all banks to make it easier to find the link to download transactions into Quickbooks.  I am not a developer, but I think Yodlee would benefit to reach out to the developer communities on both east and west coasts and do a “hackathon”.

Can Watching Ads Make You Money? Finovate Starts Tomorrow

Jingit is a new app that actually rewards people for watching ads and taking survey with cold hard cash–actually it’s a debit card. Jingit will be presenting at Finovate this week. I will be attending part of the conference to see the latest in financial innovation whether it is personal finance management tools, banking or financial security.

Ten Challenges For Women Entrepreneurs

She Takes On The World surveyed a 1000 women entrepreneurs and they identified the top ten challenges for women entrepreneurs. I think most of these challenges apply to men as well, but some stem from women needing to brag more and have more confidence in their work, product or service.

  1. Being afraid to take the leap into a new business or the next stage of my business
  2. Becoming an effective online marketer and feeling good about selling
  3. Finding and carving out the right niche and then owning it
  4. Access to a large and engaged network of women at a cost I can afford
  5. Attracting high quality clients like national brands that people know about
  6. Managing my time in the best way possible and being more productive
  7. Adding more streams of income to my business and understanding the financials
  8. Creating products that bring me a passive income and allow me to work from anywhere
  9. Becoming more tech savvy and keeping up with the fast paced online world
  10. Running a thriving business and actually leading a fulfilling, healthy and balanced life

Tip For Starting Your Own Business From Dooce

Tips for Starting Your Own Business from dooce on Vimeo. My friend Emily linked to this on Twitter.

Take Five: Social Media Interns, Fat Wallet, Hire Lite, Failure is Good

Street Art in Montreal

Did you get and/or looking to hire a social media intern? Read these tips on managing them.

Is your wallet fat? Slim it down and spend less money.

I really like this article. Nine reasons why failure is not fatal.

Looking to hire a developer, programmer? Looking for a job? Check out HireLite.

Site I love right this moment: GOOD.

 

Take Five: Finovate, Manilla, Small Business Advice, Loosecubes, Fab

Street Art in Montreal

Finovate Fall is coming soon to NYC.  Early bird registration ends August 12.  I will be there as press this year.

Small Business Accounting Advice:  The New York Times has published a great  guide for entrepreneurs about basic accounting. Bookmark this!

Manilla organizes your utility bills,  travel reward programs,  Hearst magazine subscriptions, credit cards and checking accounts in one place.  It’s a cool tool for people who travel a lot for business.  It reminds me of a product that Citibank had many moons ago.

Working from home and looking for a work space? Check out Loosecubes to find office space. Founder Campbell Mckellar was on ABC talking about her business.

Site I really like right now.  Fab.com

 

 

Small Business: From Pop Up Dream To Actual Reality

Robicellis At Dekalb Market

Yesterday, I read this post on Forbes, “So You Think You Can Cook, Test Your Skills and Open Up A Pop Up Eatery“.  It gives some good advice which is very similar to the outline in my cupcake business class but  it reads so “easy-peasy-lemon-squeezy”.  I especially question the wisdom of this advice:

Come up with a quirky theme, such as creating a meal around a certain period in history, or an event, or be inspired by a famous person – the more eccentric, and more outside the box, the better.

Later I read Allison Robicellis’ account of her reality as a small business owner.

You may think I’m my own boss, but you’re wrong- every single one of you is my boss.  Every store, every customer, every single person who walks down the street that may potentially buy a cupcake one day or write about us on Yelp- all my boss.  And no matter how stressful it gets, or how many balls I have up in the air, I know that my priority is making all of you happy every day, because honestly that’s what Matt and I live for and we wouldn’t have it any other way.

I don’t mean to shatter the dreams of anyone out there who fantasizes of being an entrepreneur, but I think it is so important to be honest about the fact that it is not just a job, but an entire lifestyle change. I’ve seen peoples marriages and relationships crumble, perfectly amazing women unable to go on a date or socialize because they work all the time, nervous breakdowns, burnouts and bankruptcies. It’s wonderful to be able to survive these things and come out on top, but it doesn’t always happen, and it takes a very special type of person to do it. And that person is completely, utterly, and madly insane.

Lately I have been thinking that people who want to start their own business believe it is all so easy.  I am not trying discourage anyone because I am big fan of  entrepreneurial spirit.   I just want people to know that the truth and choose to dive in anyway.

Don’t Quit Your Job!

DO NOT QUIT.  I mean it. Unless you plan on being an entrepreneur or working for yourself.

If you hate your job, but want another one, stay at your current job. Use the time at that job to look for another one.

I say this because many employers are not hiring people who are unemployed. Did you know about the recent report from the National Employment Law Project which said that unemployed workers continue to be excluded from consideration for job openings? In fact many job sites have ads conspicuously stating that job seekers “must be currently employed”.

If you want learn new skills, then do it. Learn on your employer’s dime. Take classes while you still collect a paycheck.

If you do quit, prepare to have at least six months of living expenses.  As you look for another job, reach out to your network of friends and colleagues, but don’t expect them to find work for you. Do the heavy lifting yourself, especially since you now have the spare time to do so.

Online POS Systems

I was talking to Matt of Robicellis and he mentioned that he was looking for a good and inexpensive online POS (Point of Sale) system.

Yesterday, I did a little research and found a couple that would be good for small businesses.

Imonggo: The basic version is free and the premium version is only $30/month.

Shopkeep: The basic version is $49/month and the plus version is $79/month. The baisc version works on iPad.

Intuit has a POS which is $19.95/month with the first two months free.

Eight Least Evil Banks

CNN.com has a list of the “eight least evil” banks. I doubt Capital One and PNC qualify to be on the list, but most credit unions around the US are pretty good. Will ING Direct stay on the list after the merger with Capital One goes through? I wonder…

Betterment Lowers The Hurdles Of Investing

betterment

Last fall I met Jon Stein, the founder of Betterment at Finovate East. A few weeks ago I met with Jon to talk about Betterment. Initially I thought it was a dashboard for all your investments similar to Mint, but Jon explained that Betterment is more than that. It is an investment portfolio that any US resident can join. There is no fee to join and no transaction fees. There is no minimum balance. Think of it as an online investment club that which allows you to sign up in a matter of minutes.

You can have the Betterment account as well as your 401k, SEP IRA or other investment accounts. They are not mutually exclusive. The investment portfolio is diversified. Presently there are 6,000 users but it is growing about 20 percent monthly.

To learn how the investment portfolio is doing, emails are sent quarterly to account holders as well as for each transaction. You can transfer money from you bank account to deposit into your Betterment seamlessly.  Quarterly rebalancing of  the investment portfolio is done automatically.
betterment

Betterment can be used for long term and short term investing. You can save for short term goals like weddings or vacation as well as long term goals like retirement. Allocation of based on your personal risk tolerance.

Now why use Betterment? For me, the short answer is “no financial planner, no worries.”  A lot of people have not been keen on their financial investments because they are afraid  they are going to do something wrong and/or it will cost too much money.  Betterment is a  simple way to diversify your assets as well as get your feet wet if you are new to investing.

From Jon Stein,

Betterment helps customers overcome investing inertia by breaking down traditional barriers and getting rid of unnecessary steps. In five minutes, you can be set up with a smart, set-and-forget, long-term investment account. It’s the way investing should be.

 

Girl Power: ING Getting Real About Financial Empowerment

From the Forbes Woman blog:

The ING Foundation has designed a program aimed at reaching girls to teach financial literacy.

Through the ING-Girls Inc. Investment Challenge, girls are given a direct investing experience with a stake in its outcome. The program launched in 2008 after a survey conducted with Essence magazine about black women and their spending habits convinced ING to do something about the dismal state of financial education among minority women. From the outset, ING Foundation President Rhonda Sims identified the need for making financial education personally relevant to the participants. According to Sims, this prong is key to the program’s success.

The End Of The Second Quarter Is Near

Blue Drink at The Rum House

How is your business doing this quarter vs. first quarter?
What adjustments should you be making?
Do you have to file quarter taxes?

Things to think about as the holiday weekend approaches!

PayDivvy: An App For People With Roommates, Friends

One of my comedian friends, Jenny Rubin,  has a joke about birthday dinners.  “You can order a spoonful of mustard, and you end up spending fifty dollars.”   Birthday dinners, splitting utilities or other expenses can be annoying.  PayDivvy takes the torture out of splitting a bill fairly by letting everyone settle up online.

Anyone signed up to use the service can easily transfer money to another user. For example, If you’re in charge of the bill, just tell PayDivvy who owes what – and the site will collect automatically and deposit the cash in your account.