I’d rather make my money playing piano in a whorehouse than account for options as recommended by John Doerr.
This population — people who tend to use few, if any, bank services — is swelling. About 10 million households in the United States do not use a bank at all, up from nine million four years ago, according to estimates from the Federal Deposit Insurance Corporation. And 24 million households that do have a bank account still use expensive financial services like prepaid cards, the agency said.
“Paid via Card, Workers Feel Sting of Fees" via The New York Times
The sad state of financial services innovation these days is to fee the poor into deeper levels of poverty.
To be honest, I was disappointed with this article. The Federal Reserve and the Pew Charitable Trusts have been publishing incredibly detailed reports on the prepaid market for years now, not that you’d know that from the story. And while these reports hardly speak of prepaid in glowing terms, they do offer a nuanced perspective on a growing class of payments with particular attraction to lower-income Americans. The truth is that, in the wake of Durbin, prepaid cards generally cost consumers — especially the financially inexperienced — less than low-balance checking accounts, and much less than other AFS sources like check-cashing.
Anyhow, my point is, there’s more to the discussion than the Times’ story would indicate. If you want to learn more about the prepaid market, here’s a collection of materials to get you started.
Have you ever wondered how Wall Street became Wall Street? It’s actually quite simple: they hired all of the smart people, and I don’t mean “all of the smart people with a passion for stocks” or “all of the smart people with experience in banking” Sure, they started with the business schools, but when they ran out of smart MBAs to hire, the banks went ahead and hired smart non-MBAs. And when they finally filled their quota, the banks took all those smart non-MBAs and did something truly crazy: they trained them. With the help of good mentors and great paychecks, the banks molded those philosophy, comparative literature, and political science majors into financial wizards, and over the next few years those wizards repaid their employers’ investment with ridiculous interest. And that’s how Wall Street discovered what law schools and consulting firms had known for years: when properly motivated, smart people can learn things…
The birth, development and subsequent career of an idea is something like that of a human. The parents have measurable control over the first two stages but not the third.
Behavioral interviewing also works — where you’re not giving someone a hypothetical, but you’re starting with a question like, “Give me an example of a time when you solved an analytically difficult problem.” The interesting thing about the behavioral interview is that when you ask somebody to speak to their own experience, and you drill into that, you get two kinds of information. One is you get to see how they actually interacted in a real-world situation, and the valuable “meta” information you get about the candidate is a sense of what they consider to be difficult.
Hilton, of course, is a complicated financial case. She inherited a fortune but also earns $25,000 to $100,000 a pop to show up at a party or a nightclub. Hilton “earns” that for her skills as a young, blonde, anorexic-looking woman with low self-awareness or conventional self-respect. But her status as an heiress itself gave her earning potential unavailable to many other young, blonde, anorexic-looking women lacking self-esteem who would like to be paid a year’s salary to drink some booze.
There’s a large dollop of self-congratulation in these gurus’ advice. To offer a blueprint for success is to produce evidence that one’s own good fortune was achieved through deliberate planning, hard work, and good character alone. While all these ingredients are a part of these women’s great American success stories, a large element of luck, and, in some cases, privilege, was involved. To insist that anyone can do it is the bedrock of the American dream, and the answer to everyone who falls short. The flip side of the empowerment doctrine that self-help offers—that the potential to change your life lies entirely within you—is that the potential to fail does, too. At least when God was part of the plan, His hand shared some of the blame.