Editorial Team

Saving and Investing As Easy As Paying for an Uber

Unifimoney is making saving and investing as easy as spending.

Uber solved for 3 things when they went after the broken incumbent taxi industry:

  1. They solved for scarcity
  • More taxis means less waiting around
  1. They solved for convenience
  • The taxi comes to you
  1. They solved for payments
  • Enough cash? Do they accept cards? — avoid the awkward tip moment

The last of these — solving for payments — was so successful at removing the friction that it was a problem. The experience of waking up in the morning and finding that you had spent a fortune getting around/getting home the night before quickly became almost ubiquitous.

There were no brakes to your spending, no way to measure the money leaving your pocket. Making payments so easy and so invisible it meant you would spend a lot more than you’d planned.

This phenomenon is well known in the payments industry. We actually value money differently in different forms — a large heavy coin, a crisp new note, a check, a credit card, the account balance on your phone, or a single click on Amazon is all worth the same but we perceive and treat them differently.

The more removed you are from the physical act of handing over cash, the more you are likely to spend. (For more on the psychology of money, read the excellent book Mind over Money: The Psychology of Money and How to Use It Better by Claudia Hammond).

The economics of payments means that merchants and the payments industry are highly incentivised to innovate in order to remove friction; the smoother and more effortless the transaction, the more you’ll spend. (This innovation is therefore not necessarily in the best interest of the consumer.)

That explains why it’s so easy to spend money, with 1-click or no-click purchasing becoming the norm online and tap-to-pay becoming the norm in person. But what about the other side of the equation? What about saving and investing?

Theoretically, becoming financially secure is relatively simple — spend less than you earn and invest the rest in a low-cost highly diversified fund and you’ll build wealth. Start as early as possible and stay consistent for as long as possible to maximize compound growth.

The typical Top-10 Bank pays a meagre 0.01% interest; even the highest of high-interest savings accounts pay less than inflation. That means your money loses value while it sits in your account. In contrast, over the last 40 years, property has returned an average 4.5% per year and the S&P 500 has returned 11.5%.

If you had invested $250 a month in even the best performing high-interest savings account 40 years ago, you would have $268K today. If you had invested that same amount in the S&P 500, you would have $2.5m.

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Calculator Source: https://www.calculators.org/savings/monthly.php data sources: various

If you start investing $200 a month beginning at age 25, you would (based on long-term historical performance) have a fund worth over $2m by the time you retire. Start 10 years later, and it takes putting away $650 a month to reach the same amount.

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Given the startling difference in outcomes, why isn’t everyone beginning to save and invest from a young age?

The answer lies in the fact that it calls for consistent diligence and a lot of manual work for a consumer to optimize their money management. There are many points of friction, and to maximize your wealth, you have to invest frequently and consistently not just for years but for decades to get the full benefit. Building wealth is like catching a cab; Unifimoney is working to make it like calling an Uber.

Governments have spent billions of dollars trying to convince and educate people to save and invest in their long-term financial health. But, try as they might, we just don’t do it. We are just not well adapted to do hard, complex, boring, and repetitive tasks if the payoff is so far into the future.

But what if we could take the friction out of saving and investing, things that are very much in the interests of consumers long-term financial health? What if saving and investing were as easy as paying for an Uber? Again and again, we’ve solved for payment friction; surely we can solve for the friction of saving and investing.

The main obstacle for smoothing best practices in wealth building is that friction-reduction does not generally serve the interests of the companies holding your money (the vast majority of deposits — over 80% — are held by a handful of hugely profitable big banks). What is dead money to you, losing value in low- or no-paying deposit accounts, is free money for them to mark up and lend out at a vast profit.

At Unifimoney, we’re making the simple and radical proposition that our users’ money should work for them, and not the bank. We’ve built an all-in-one account that helps build wealth slowly, systematically, and effortlessly.

We do that by first creating a single integrated account incorporating high-performing tools for all three facets of everyday money management: saving, spending and investing. We help maximize your passive income from deposit interest, and we help maximize your cashback from spending which automatically and by default is invested into a low-cost diversified Robo-investment account.

Additionally, customers make a monthly contribution to their investment account of a minimum of $25; this account takes the friction out of wealth-building.

Customers who want to trade equities, crypto or gold are able to do so within the app, and additional services like home loans, auto loans, international remittances and more are also available when they are needed.

If we can make saving and investing frictionless, we can help more people achieve financial resilience faster. For generations, human psychology has been used to make us spend more; we want to finally make it as simple and effortless to save more. We’ve taken the speed bumps out of wealth-building; we’ve used the best of Fintech to make money management simple and streamlined for everyone.

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